Good morning traders!
The S&P 500 ($SPY) is trading below yesterday’s close. Let’s get into it…
The S&P 500 ETF broke below the closely watched $400 level Tuesday, as recession fears continue to stir market sentiment. This week’s economic data will be closely watched by investors and traders for hints about what the Fed will do next. Last week, mortgage loan application data showed a decline despite a fall in rates. “All told, financial indicators point to a recession on the horizon,” wrote Wells Fargo economist, Azhar Iqba. “The S&P 500 has peaked ahead of recessions with an average lead time of four months over the past few business cycles. Taken together with the inverted yield curve, markets are clearly braced for a recession in 2023.” We advise everyone to size down, and trade with caution as the market could go either direction very quickly; especially as political, geo-political, and inflation uncertainty is present.
Wall Street CEOs sound the recession alarm and warn of difficult times ahead. Jamie Dimon, CEO of JPMorgan Chase, once more expressed concerns about an impending recession, stating to CNBC that by mid-2023, rising interest rates and inflation will have wiped out the savings households had built up during the pandemic, which could derail the economy or trigger a mild or hard recession. Goldman Sachs CEO David Solomon told The Wall Street Journal’s CEO Council Summit the firm will have to trim its operations amid a slowing economy and after hiring in the banking industry soared during the pandemic deal-making boom.
In the news, China’s long-awaited pivot away from its strict zero-Covid strategy fails to lift the mood for stocks. After nationwide protests, China took a significant step toward loosening its restrictions on Wednesday by eliminating the need for testing for the majority of public spaces and for domestic travel. This did little to inspire Chinese stocks, or global equities, as the damage has already been done to the world’s second largest economy.
Potential Intraday Resistance Levels:
12/06/22 Market Close: $393.83
9D EMA (4hr): $395.22
50D SMA (1hr): $397.23
Potential Intraday Support Levels:
200D SMA (4hr): $390.50
Note: Moving averages are reported from the previous trading session and will change during the next trading session.
Wednesday Economic Events:
MBA Mortgage Applications 7:00am ET
Productivity and Costs 8:30am ET
EIA Petroleum Report 10:30am ET – High Volatility Expected
Consumer Credit 3:00pm ET
Fed Speaker Scheduled:
No Fed Speakers Scheduled
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