S&P 500 SHOWS SMALL BOUNCE ON FED ENCOURAGEMENT
S&P 500 futures are currently trading at 2488- higher by 0.09% as compared to the previous close. The index futures closed in Negative territory in the last trading session.
In the cash markets, the S&P 500 added 1% at the time of writing as real estate investments and utilities stocks climbed. However, the benchmark finished at its lowest level since September 2017 on Thursday. In weekly terms, the benchmark lost more than 5% this week.
U.S. equities gained today after Federal Reserve Bank of New York President John Williams said that the central bank could reassess its interest rate policy and balance sheet reduction in the new year if the economy slows.
Sentiment was dampened earlier today after the US President aggravated fears of a government shutdown on a tweet. Stocks fell to their lows of the day on Thursday after U.S. House of Representatives Speaker announced that President Trump would not sign a temporary government funding resolution without funding for a U.S.-Mexico border wall. Later in the session, the House passed a temporary spending bill with more than $5 billion for President Trump’s border wall.
Index- member Nike was up 9.7%, after a Thursday-evening earnings release that indicated the company beating market expectations for fourth-quarter earnings and revenue. The stock was also upgraded to buy from hold at Pivotal Research. Accenture was up 0.3% after the firm announced the acquisition of the private, data analytics firm Knowledgent Group.
On the other hand, Index-constituent Perrigo plunged more than 21%, after the company disclosed that Ireland is attempting to collect €1.64 billion in back taxes and penalties.
On the economic front, the final estimate of the GDP for the third quarter was released earlier today. The QoQ rate of change in the GDP was +3.4%. The GDP change was below the market expectation of 3.5%. In addition, Core Durable Goods Orders (MoM) for November also released today came in at -0.3%. Orders change was below the consensus estimates of a growth of 0.3%.
On the technical front, the RSI is currently at 30% and suggests that the market can move in the upward direction. The current price is below the MA5 (2510). The %K has crossed the %D from below to the upside at around 8% and suggests that the market may head upwards.
Overall Bias is Positive and Short-term trades can be initiated with tight Stop Loss and Take Profit targets.
Trade Suggestion-Stop Buy At 2495, Take Profit At 2525 Stop Loss At 2480