S&P 500: Market Seems Frothy – BlackRock’s Rick Rieder

S&P 500 is on a decline as investors become cautious about the relentless rallying of the US stock market. In an interview with CNBC, Rick Rieder, the CIO of BlackRock’s Global Fixed Income noted that the economy is accelerating rather quickly. On the one hand, retail sales, housing starts, as well as non-manufacturing and manufacturing PMIs among other economic data are on a record-high.

At the same time, the Federal Reserve is still pumping more liquidity into the market. Rieder notes that over the past 50 trading days, about 700 billion has been released into the system via Treasury. With the addition of the better-than-expected Q1’21 earnings for most companies, the market looks a bit unhealthy. From this perspective, investors remain keen on whether the Fed will hike interest rates sooner.  

S&P Technical Forecast

S&P 500 has given up its previous gains at its current 4,148.8. Earlier on Tuesday’s session, the index had extended Monday’s gains by hitting 4,176 points. However, the ongoing profit-taking has pushed it further below the record-high of 4,192 set on Friday. On an hourly chart, it is trading below the 25 and 50-day exponential moving averages.  

S&P 500 is likely to find support at 4150 as the bulls strive to push it back on its uptrend. However, if the bears manage to break out of that support level, the next targets will be 4125 and 4100. On the other hand, the index may bounce back to 4175, where it is likely to experience some resistance before rallying further. Nonetheless, 4200 will probably remain evasive in the near term as investors become increasingly wary of the speedy rallying of the stock market.   

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S&P 500 Chart

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