S&P 500 jumped in early trading, recovering almost all of previous week losses as the optimism returns to stocks after a decline in new coronavirus cases and deaths in Europe. New York State reported 590 new coronavirus deaths on Sunday, less than the 630 reported on Saturday, marking the first daily decline in the state. Comments from Larry Kudlow that the coronavirus-related US treasury bond is a great idea also boosts sentiment.
On the other hand, Former Fed Chair Jannet Yellen said that US GDP in Q2 is likely to drop by at least 30% and the current unemployment rate is around 12%-13% and heading higher. The jobless claims on Thursday registered at 6.64 million beating the worst of the expectations of 3.50 million. If we add the previous week data, we have almost 10 million new Americans claiming unemployment benefits.
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S&P 500 Levels to Watch
S&P 500 is 4.63% higher at 2600 as the rebound from the March lows at 2191 gains momentum after the previous week losses. The technical outlook is bearish but a move above the previous week highs at 2638 might improve the short term outlook.
On the upside, the initial resistance will be met at 2,612 the daily top. The next level to watch is at 2,638 high from March 27 trading session. A break above 2,638 might test the next resistance at 2,700 the high from March 13.
On the flip side, the intraday low at 2,485 will provide the first support for the S&P 500 index. A move below this level might open the way for 2,430 the low from April 2. If sellers break this level, then the next support stands at 2,392 the low from March 25.
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