The S&P 500 index has just opened 0.34% lower after Gilead Sciences announced results from its Phase 3 trial of its coronavirus treatment candidate.
In data just reported by Reuters, Gilead Sciences says that the “Phase 3 trial demonstrates a 5-day treatment course of Remdesivir resulted in significantly greater clinical improvement vs standard of care alone.”
However, the company also reported that there were “non-statistically significant increases in clinical worsening/death observed in the standard of care only group compared with Remdesivir groups.” It also said that the odds of improvements in the clinical state of those treated with a 10-day curse trended upward but did not reach statistical significance.
Gilead Sciences plans to submit full data from the phase 3 simple trial of Remdesivir in a published article in a peer-reviewed journal in the coming weeks. However, the markets do not seem to have paid much attention to the statement, as investors appear more concerned with the state of US-China relations and the ongoing violence across several cities in the US.
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Technical Outlook for S&P 500
The S&P 500 is gradually eroding the resistance wall, but has not attained the 3% penetration close to the upside which would serve as the price filter to confirm the break that buyers need to propel prices to the north. As such, a lack of conviction persists and leaves the S&P 500 index still trading at 3037.6, which is not too far from the 3028.3 ceiling of the resistance zone. Furthermore, price finds itself boxed into the apex of the rising wedge.
If the technical expectations of this pattern play out, we could see a breakdown of the wedge, which could target the 2961.4, 2844.3 and 2798.3 (50% Fibonacci retracement) price levels in sequence, as the measured move plays out. Price may extend all the way towards 2707.7 if the projected move from the breakdown of the wedge is anything to go by.
Conversely, a 3% penetration close north of the resistance zone allows the S&P 500 to push towards the 3137.0 resistance, with 3257.8 (88.6% Fibonacci retracement) still in the reckoning as a valid upside target in a move that also invalidates the wedge pattern.
This week sees a loaded US calendar with the US Non-Manufacturing PMI and several employment reports (ADP Employment Change, Initial Jobless Claims and Non-Farm Payrolls) taking centre stage. These could determine the direction of the S&P 500 index as the week progresses.
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