S&P 500 RISES ABOVE MA5 AFTER CHINA OFFERS A WAY TO ELIMINATE US TRADE IMBALANCE
S&P 500 futures are currently trading at 2668- higher by 1.10% as compared to the previous close. The index futures closed in positive territory in the last trading session also.
In the cash markets, the broad-market index rose 1.36%, trading out of correction territory, as the energy and industrials sectors outperformed. Equities rose today as investors cheered potential progress in trade negotiations between China and the U.S.
The major averages jumped to their highs of the day after sources told CNBC that China had offered a six-year increase in U.S. imports during recent trade talks. Bloomberg News reported earlier today that the deal would aim to reduce the annual U.S. deficit to zero by 2024.
Shares also rose following comments from New York Federal Reserve President John Williams. President Williams called for “patience and good judgment” before raising rates, adding he expects “strong” and “healthy” economic growth for this year.
Among top index gainers, SunTrust Banks Inc. gained 4.9% after the bank reported better-than-expected profits. Tiffany & Co. rose 5.2%, even after the luxury jewelry retailer reported holiday-period sales that declined from a year ago and provided a downbeat full-year profit and sales outlook.
Stocks of VF corp. skyrocketed 12.71%, after the parent company of Vans and The North Face reported better-than-expected earnings and sales.
Among index top losers, Netflix dived 2% on the back of disappointing guidance for the first quarter of 2019.
On the economic front, the Manufacturing Production (MoM) for December released earlier today came in at 1.1%. The production growth was above the market expectation of 0.3%. Production data released by the Fed also showed the sector’s biggest gain in 10 months in December.
On the technical front, the RSI is currently at 64.85% and suggests that the market can move in the upward direction. The current price is above the MA5. The current price is above the middle line of the Bollinger Bands and is heading upwards.
Overall Bias is Positive and Short-term trades can be initiated with tight Stop Loss and Take Profit targets.
Trade Suggestion-Limit Buy At 2660, Take Profit At 2690 Stop Loss At 2645