US Labor Market in Free Fall, S&P 500 Index Turns Red

S&P 500 started the session higher but trimmed some of the gains after a second disastrous week for the Jobless claims data. US labour market is in free fall amid the coronavirus outbreak as this week’s jobless claims is even more worst than the previous weeks’ figures. The jobless claims came in at 6.64 million well above the expectations of 3.50 million. Adding the previous week data, we have almost 10 million new Americans claiming unemployment benefits. Continuing Jobless Claims registered in at 3.029M below forecasts of 4.882M on March 20. The data point to the worst recession than the 2009 crisis. As unemployment rise, consumer confidence will drop further, putting pressure on most of the asset prices.

Yesterday the ADP of private-sector employment fell by a 27,000, and the manufacturing ISM slipped to 49.2 from 50.1. The New orders, fell to 42.2 from 49.8, while the employment slumped to 43.8 from 46.9. Car industry reported that US auto sales fell to 11.37 million from 16.8 million in February.

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S&P 500 Support and Resistance

S&P 500 is 0.40% higher at 2473 in an attempt to recover some of yesterday’s sharp losses. Fundamental data are supportive while the technical outlook is bearish despite the recent bounce. 

In the upside, first resistance will be met at 2,507 the daily top. The next level to watch is the 2,640 high from yesterday’s trading session. A credible break above might test the next resistance at 2,663 high from March 16 trading session.    

On the other side, the daily low at 2,430 will provide the first support for the S&P 500 index. A break below this support might open the way for 2,392 the low from March 25. If bears break this level, then the next support stands at 2,222 the low from March 24.    

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