S&P 500 WOBBLY ON PAYROLLS AND EARNINGS
S&P 500 futures are currently trading at 2712- lower by 0.01% as compared to the previous close. The index futures, however, closed in positive territory in the last trading session.
In the cash markets, the S&P 500 edged down 0.033% at the time of writing. Losses in the consumer discretionary sector pressured the index. The benchmark ended January up more than 7%. Since 1950, the index has ended a calendar year higher 87% of the time when January ends up being a positive month, according to the Stock Trader’s Almanac.
Investors are also keeping an eye on trade talks between the U.S. and China. Both negotiating teams have said they made “important progress.” U.S. President Donald Trump also said he would soon meet with Chinese premier Xi Jinping to try to reach a comprehensive trade deal.
Index- member Merck & Co rose 2.39% after posting a better-than-expected profit and revenue. Exxon Mobil stocks climbed about 2% after the company reported better-than-expected earnings. Honeywell International advanced 1.81% after the firm reported adjusted profit and revenue that rose above expectations.
On the other hand, Cigna Corp. fell 3.5% after the health care company said profit fell 46% in the fourth quarter. Chevron Corp. fell 3.6% ahead of the firm’s fourth-quarter earnings report.
Index-member Amazon reported better-than-expected earnings and revenue for the fourth quarter on Thursday. However, the company issued weaker-than-expected revenue guidance for the first quarter and warned about increasing investments. These concerns pushed Amazon stock down by 2.76% at the time of writing.
So far, more than 45% of S&P 500 have reported earnings this season. Of those companies, 68.1% have topped the market expectations.
On the economic front, Nonfarm Payrolls for January released earlier today came in at 304K. Payrolls number were above the market expectation of 165K. The report follows a 35-day U.S. government shutdown. It also marks the 100th straight month of jobs growth.
In addition the ISM Manufacturing PMI for January also out today came in at 56.6. The PMI reading was also above the market expectation. The PMI was 54.3 in the previous month.
On the technical front, the RSI is currently at 67.2% and suggests that the market can move in the upward direction. The current price is below the MA5. The %K has crossed the %D from below to the upside at around 75% 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-Limit Buy At 2705, Take Profit At 2735 Stop Loss At 2690