S&P 500 FALLS BELOW MA5 ON LINGERING TRADE WORRIES
S&P 500 futures are currently trading at 2692- lower by 0.43% as compared to the previous close. The index futures closed in negative territory in the last trading session also.
In the cash markets, the S&P 500 inched down 0.51% as the energy and financial sectors lagged. U.S. stocks fell for the third straight day on Friday as investors continued to worry about ongoing U.S.-China trade negotiations as well as slowing economic growth.
The Wall Street Journal reported on Friday that the two countries have not yet put together a draft on the matters they agree or disagree. The report follows President Trump saying on Thursday that he will not meet with his Chinese counterpart Xi Jinping before the deadline.
Chip stocks in the index dropped on Friday. The VanEck Vectors Semiconductor ETF (SMH) fell 1.1% after an analyst at Goldman Sachs said the space had gotten ahead of itself. Qorvo and Micron Technology dropped more than 4% while Nvidia declined 1.35%.
On the other hand, among top index-gainers Coty Inc. surged 26.20%, after the cosmetics maker reported better-than-expected quarterly results. Mattel Inc. rose 22.25% after the toymaker posted a surprise quarterly profit as it benefited from a makeover of its iconic Barbie doll.
Interest rate-sensitive financials dropped 2%, weighing the most on the broad-market index, as U.S. 10-year Treasury yields fell.
Ten of the eleven major S&P sectors were lower, while the defensive utilities sector was the only sector to eke out a small gain.
Still, the index is 14.3% higher from the 20-month lows it hit in December, supported by a dovish Federal Reserve, hopes of a U.S.-China trade deal and largely positive fourth-quarter earnings.
71.5% of the S&P 500 companies that have reported beat profit estimates, according to IBES data from Refinitiv. According to market sources, earnings for the first quarter of 2019 are expected to contract by more than 1%. If earnings do fall, it will be the first profit contraction for the index since the second quarter of 2016.
On the technical front, the RSI is currently at 58.46% and suggests that the market can continue trading sideways. The current price is below the MA5. The %K has crossed the %D from above to the downside at around 93% and suggests that the market may head downwards.
Overall Bias is Negative and Short-term trades can be initiated with tight Stop Loss and Take Profit targets.
Trade Suggestion-Limit Sell At 2700, Take Profit At 2675 Stop Loss At 2713