S&P 500 (SPY) Report – 12/06/22

Good morning traders!

The S&P 500 ($SPY) is trading near yesterday’s close. Let’s get into it…

The markets are becoming restless and anxious to fall farther. But that won’t happen as long as the data shows that the American economy is healthy. Investors and traders are still digesting Friday’s stronger than expected jobs report, and questioning if the Federal Reserve will need to be more aggressive with rate hikes. These concerns were enough to spark a sell-off over these fears. There doesn’t seem to be any threat to the Fed’s anticipated rate hike slowdown next week; traders are still pricing in a 0.5 percentage point hike at the Fed meeting in December, with a 20% chance of an additional supersize 0.75 percentage point hike. Given that Fed Chairman Jerome Powell has indicated he is prepared to slow down, there is a high likelihood that will happen. Additionally, given the delay in the Fed’s rate hikes’ impact on the real economy, the central bank will want to avoid over tightening.

In the news, President Joe Biden will meet with the Taiwan Semiconductor Manufacturing founder to announce the opening of a second chip plant in Arizona. Early in August, Biden signed the CHIPS and Science Act to encourage manufactures to make chips domestically. “It’s the foundation of our personal electronics, and also the future of quantum computing and AI,” Chatterji said. “At scale, these two [factories] could meet the entire U.S. demand for U.S. chips when they’re completed. That’s the definition of supply chain resilience. We won’t have to rely on anyone else to make the chips we need.”

Potential Intraday Resistance Levels:
50D SMA (1h): $402.89
50D SMA (4h): $401.66

Potential Intraday Support Levels:
12/05/22 Low of Day: $398.17

Note: Moving averages are reported from the previous trading session and will change during the next trading session. 

Tuesday Economic Events:
Int. Trade in Goods 8:30am ET
Redbook Sales 8:55am ET
EIA Short-Term Energy Outlook 12:00pm ET – High Volatility Expected
API Crude Oil Data 4:30pm ET

Fed Speaker Scheduled:
No Fed Speakers Scheduled

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