S&P500 – What to Expect

<p>Key
Highlights</p><p>· Monthly and
Annual Performance: Over the past four weeks, the S&amp;P 500 has gained 3.50%,
and it has surged 20% over the last 12 months, demonstrating the resilience and
positive sentiment in the U.S. stock market.</p><p>· S&amp;P 500
Performance: The S&amp;P 500 index fell by 1.2% after the Federal Reserve
meeting on Wednesday, but bounced back after investors chose to focus on the
positive earnings reports.</p><p>· Tech Giants
Drive Market Surge: <a href="https://fxgt.com/stocks/" target="_blank" rel="follow">Meta and Amazon</a>
added $280 billion in market value, with Meta tripling profits and Amazon
becoming profitable again, underscoring their major impact on market trends.</p><p>Economic
Drivers</p><p>Record Highs
for S&amp;P 500: Achieving new record highs and heading for its 13th weekly
gain in the last 14 weeks, the S&amp;P 500 is demonstrating robust investor
confidence.</p><p>Drivers of
Market Optimism: The recent positive momentum in the markets has been driven by
robust corporate earnings, positive U.S. economic growth data, and the
anticipation of lower interest rates, fostering an overall optimistic market
outlook.</p><p>S&amp;P 500
Decline Following Fed Statement: The S&amp;P 500 fell by 1.6% as markets
reacted negatively to the Federal Reserve's recent policy update and remarks
from Chair Jerome Powell.</p><p>Investors
Overlook Fed's Rate Cut Stance: Despite Federal Reserve Chair Jerome Powell
indicating that a March rate cut is unlikely, investors chose to focus on the
positive earnings reports, contributing to the rise in stock futures.</p><p>Economic
Data Influences Market Sentiment: Recent <a href="https://fxgt.com/technical-analysis/" target="_blank" rel="follow">economic data</a> showed a mixed
picture, with initial jobless claims rising for the second consecutive week to
reach a two-month high. Conversely, labour costs slowed, and job cuts soared,
adding complexity to market forecasts.</p><p>Tech Giants'
Market Impact: Meta and Amazon added a staggering $280 billion in market value
after reporting impressive financial results. Meta's profits tripled
year-over-year, with revenues exceeding $40 billion, while Amazon returned to
profitability, boasting over $30 billion in annual profit.</p><p>Concentration
and Market Health Concerns: The concentration of gains in a few large-cap <a href="https://fxgt.com/stocks/" target="_blank" rel="follow">stocks raises</a> concerns about the broader
market's health and the sustainability of its growth trajectory​​.</p><p>Technical
Overview and Key Levels</p><p>Strong Start
to the Year for US500: The US500, or S&amp;P 500, has demonstrated robust
bullish momentum since the beginning of the year, recording a 3.50% overall
increase and a 1.18% rise in the past week.</p><p>Bullish
Trend Triggered by Fed's Rate Decision: The uptrend initiated in November after
the Federal Reserve's pivot to maintain steady interest rates, has led to a
significant surge of over 18% in the index over the last three months.</p><p>Current
Market Condition: The US500 is currently overbought on a weekly basis but has exited
overbought territory on the daily timeframe following the retracement after the
recent Fed meeting. The index is maintaining a sharp uptrend channel that began
in November.</p><p>Approaching
the 5000 Milestone: As the index nears the 5000 mark, a psychological barrier,
there's potential for profit-taking and a market top formation, but
confirmation is needed as it approaches this potential resistance zone.</p><p>Key Support
and Resistance Levels: The key support level is identified at 4840. A breach
below this could signal a corrective phase and a shift in momentum. Short-term
resistance is seen at the recent high of 4940.</p><p>Historical
Trends and Future Outlook: Historically, February has been a weaker month for
U.S. <a href="https://fxgt.com/stocks/" target="_blank" rel="follow">stocks</a>, raising speculation about a
possible correction upon reaching the 5000 level. However, the current market
momentum is strongly bullish, with a focus on reaching and possibly surpassing
the 5000 level.</p><p>Looking
Ahead</p><p>Focus Shifts
to Employment Data and More Earnings: As the week closes, investor attention
shifts towards Friday's monthly jobs report, which could influence market
directions. Additionally, earnings reports from major companies such as
Chevron, Exxon Mobil, and AbbVie are highly anticipated.</p><p>Anticipation
of U.S. Jobs Report: Market participants are keenly awaiting the U.S. Non-farm
Payrolls report for January, which is projected to show an addition of 180,000
jobs. This comes in the context of the ADP National Employment Report, which
recently indicated a lower-than-expected increase in private sector
employment​​.</p><p>Monitoring
U.S. Economic Health: Investors are set to closely watch the U.S. weekly
jobless claims and January PMIs next week as key indicators of the U.S.
economy's health.</p>

This article was written by FL Contributors at www.forexlive.com.