SPDR S&P 500 ETF Analysis Before CPI, Bank Earnings Season

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The S&P 500 (INDEXSP: INX) index drifted upward this week as investors waited patiently for the upcoming American inflation data. It also rose ahead of the upcoming bank earnings season. The S&P 500 index rose to a high of $3,968, the highest point since December 15. Similarly, the SPDR 500 ETF (NYSEARCA: SPY) rose to $396. The Dow Jones, Russell 2000, and Nasdaq 100 indices also drifted upwards.

Bank earnings season

The main catalyst for the SPY ETF will be the upcoming American inflation data scheduled for Thursday this week. Economists polled by Reuters believe that consumer prices moved downward slightly as the price of natural gas and shipping fell. Prices also declined as inventories, especially in giant retailers and computer manufacturers rose. As such, many companies provided substantial discounts during the Christmas season.

A lower-than-expected inflation figure will be a positive catalyst for the S&P 500 and the SPY stock price because it will send a signal that the Fed will start easing its rate hikes soon. In most periods, these indices do well in periods of low-interest rates.

The other main catalyst for the S&P 500 will be the bank earning season that kicks off on Friday. Early indications are not good. Goldman Sachs, the most prominent Wall Street bank, announced that it will lay off over 3,200 employees. Blackrock, the biggest asset manager in the world, will fire 500 people as it seeks to lower its costs. Other companies in the financial sector will likely do the same. These announcements before earnings are signs that the companies’ results were not good.

The top banks that will have an impact on the S&P 500 index are JP Morgan, Wells Fargo, Citi, and Morgan Stanley. 

Top SPY ETF risers and fallers

Most S&P 500 constituents have had a strong start of the year. Warner Bros Discovery is the best performer this year, having risen by over 32%. It is followed by United Airlines, Carnival, Western Digital, American Airlines, Royal Caribbean, Norwegian, and Freeport McMoran. Cruising and airline stocks are doing well as travel demand rises. Other top performers in the index are General Electric, MarketAxxess, Nucor, and Wynn Resorts.

On the other hand, the main laggards of the S&P 500 index were Baxter, Enphase, Northrop Grumman, Molina Healthcare, and UnitedHealth.

SPDR S&P 500 ETF Trust forecast

The four-hour chart shows that the SPDR S&P 500 ETF has been in a slow upward trend in the past few days. It has soared to the highest point since December 15. As it rose, the index moved above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved above the neutral point. It has moved slightly above the key resistance level at $387. Therefore, the index will likely have a bearish breakout after the US inflation data and as the earnings season kicks off.

SPDR S&P 500