SPY Chart done one hourly candles. Bullish activity was the strongest we’ve seen in months last week as buyers stepped in following multiple positive catalysts. First, labor market data indicated a rise in unemployment from 3.8% to 3.9%, which is ironically good news since higher unemployment leads to less consumer spending power, and that helps fight off inflation. The Federal Reserve was very clear early on in 2022 that in order to fight off inflation, there will likely need to be an uptick in unemployment, which is exactly what’s happening now. Another catalyst for last week’s move was The Fed’s decision to hold interest rates steady at 5.5%, making this the second FOMC in a row where they keep rates...
SPY Chart done on hourly timeframe. Next week is a pivotal week for markets as traders and investors prepare for major earnings, monetary policy updates, and labor market data. Last week’s market sell-off brought the S&P closer to correction territory, despite the fact that many large cap tech companies beat earnings expectations. This week’s earnings focus will on Apple, AMD, McDonald’s, AirBnb, and a few other notable names, but Apple’s earnings are especially in focus since it is the most valuable public company, and an earnings miss could be detrimental. The Federal Reserve will meet this week for their two day FOMC event and will decide whether to raise interest rates or keep them as is. The Feds hiked interest...
SPY Chart done on hourly timeframe. Market sentiment turned pessimistic last week after mixed economic data and earning results from Tesla and Netflix. September retail sales reflected a 0.7% increase vs the 0.3% expected. On one hand, strong retail sales indicate strong economic activity, but strong spending could also lead to an uptick in inflation. The Fed are using high interest rates to slow down spending and economic activity, so the unexpected jump in consumer spending was a mixed signal for the markets as it could lead to lingering inflation and further interest rates. The PCE report will be released this week, which is The Fed’s preferred inflation gauge. PCE has been slowly cooling down and moving in the favored...
SPY Chart done on hourly timeframe. Earnings season kicked off last week with financial institutions such as JPMorgan, Citibank, and Well Fargo all topping expectations and boosting their forecasts. Although bank earnings were great, the market gave up much of its gain on Friday due to rising conflict in the Middle East and a weakened consumer sentiment reading. The University of Michigan’s preliminary October consumer sentiment index fell to 63 on Friday’s reading, which is the lowest in five months, and it could explain the sharp downside move market saw to end the week. Earnings season will continue this week with many prominent companies such as: Netflix, Tesla, Goldman Sachs…etc. reporting. Wall Street boosted corporate earnings projections early this month,...
SPY Chart done on hourly timeframe. Financial institutions are set to report earnings this week, which means it’s the start of earnings season. Industry leaders such as: JPMorgan Chase, Citigroup, Well Fargo…etc. will update markets on their Q3 performance. Their earnings last quarter surprised investors with better than expected numbers, but analysts are on edge this quarter as weak stock and bond market performance can have an impact on their bottomline. Banks already experienced volatility in the first half of 2023, so investors want to see them at least come in line with expectations to avoid further uncertainty. Other earnings in focus this week are expected from PepsiCo, Delta Airlines, and United Health. All three of these names hold heavy...
