S&P 500 drops as Netflix and Morgan Stanley slide following earnings
The S&P 500 dropped for the first time in three days because of Netflix and Morgan Stanley losing ground after releasing first-quarter results.
The benchmark index lost 0.4%
On Wednesday, U.S. stocks declined at the opening as Treasury yields increased amid speculation that the Federal Reserve could extend its policy of raising interest rates. Additionally, mixed results from regional banks and a decline in Tesla added to the pessimism.
Even though several of the companies that reported in the last 24 hours exceeded analysts’ low-bar expectations, speculators spotted a flaw in the data and drove the prices lower. Investors were on edge due to a lack of large company projections, the Federal Reserve’s impending interest rate increase, and the looming recession fears.
According to JPMorgan’s trading department, “This risk-off tone appears to be aligned with heightened recession risk; potentially central bank induced.”
Investors have been keeping a tight eye on the sector after fears of a contagion caused by bank failures last month.
According to Emmanuel Cau of Barclay in a note to investors, Wall Street is searching for indications of slowing demand and circumstances that could hinder profitability through the second half of 2023 this season.
In general, he said, “Q1 earnings may not move the needle very much.” Even though equities have risen, investors are still being cautious, thus further earnings growth would prolong the pain trade.
Major averages opened lower Wednesday as a new round of corporate earnings releases trickled in.
S&P 500 TECHNICAL ANALYSIS DAILY CHART:
S&P 500 is currently trading in up channel.
S&P 500 is currently trading above 20&50 SMA.
RSI is in buying zone which suggests bullishness and Stochastic is suggesting down trend.
Immediate resistance is at 4197.03 & its immediate support level is 4171.80
HOW TO TRADE S&P 500 IN THIS WEEK
S&P 500 was initially moving in an upward channel, but after the previous day’s indecisive candle, the price started going downward. Currently, it is trading in a support zone, and if that level is broken, further declines are possible.