S&P 500 FALLS BELOW MA5 ON TRADE TENSIONS AND PMI
S&P 500 futures are currently trading at 2958.25- lower by 0.55% as compared to the previous close. The index Futures closed in negative territory in the last trading session also.
In the cash markets, the broad market index inched down 0.69% to 2,958.46 at the time of writing.
U.S. equities advanced earlier in the session as traders’ bets on the US central bank slashing interest rates for a second time later this year.
Hopes for another rate cut rose after IHS Markit’s U.S. Manufacturing PMI in July fell to its lowest level since 2009. The IHS Manufacturing PMI dropped to 50.4 in July from 50.6 in the previous month.
The U.S. President said today that he would slap an additional 10% tariffs on $300 billion worth of Chinese goods starting from 1st September.
The Federal Reserve slashed the benchmark short-term fed funds rate by 25 basis points to the target range of 2%-2.25% on Wednesday. The Fed, however, dampened hopes of a lengthy easing cycle.
Qualcomm stocks declined 2.77% after the company reported quarterly revenue that was below market expectations and issued guidance that was much weaker than expected.
On the other hand, stocks of Verizon Communications added 0.42% after the company beat estimates for its quarterly results.
According to market sources, so far about 355 S&P 500 companies have reported their quarterly earnings. Of those, 74.4% have reported strong quarterly results.
According to Stock Trader’s Almanac, August has been the second-worst month for the S&P 500. Over that time, the index has averaged a decline of 0.1% in August.
The benchmark index recorded 24 new 52-week highs and five new lows. The broad-market index posted a second straight month of gains in July.
On the economic front, ISM Manufacturing PMI for July released earlier today came in at 51.2. The index reading was below the market expectation of 52.0.
On the technical front, the RSI is currently at 42.15% and suggests that the market can move in the downward direction. The current price is below the MA5. The current price is below the lower band of the Bollinger bands and is heading 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 2960, Take Profit At 2947 Stop Loss At 2967