S&P 500 Under Pressure at 4368 As IMF Cuts Global Growth Forecast

Summary:

The S&P 500 index is facing renewed headwinds after the IMF cut its global growth forecasts for 2021 by 0.1%.

The S&P 500 index is presently trading lower after the International Monetary Fund lowered its global economic forecast for 2021.

In revising its world output growth forecast for 2021 from 6.0% in July to 5.9% presently, the IMF has cited the continued spread of the COVID-19 delta variant as a cog in the wheel of progress of many world economies. The IMF says more action is needed to stem the tide, and it retained the 2022 growth forecast at 4.9%.

The S&P 500 index also lost ground after two Fed policymakers appeared to give the green light to the November tapering commencement date. Fed Vice President Richard Clarida and Atlanta Fed President Raphael Bostic indicated that there had been enough progress to warrant tapering. Clarida and Bostic spoke at separate occasions, with Bostic providing comments to the Financial Times and Clarida speaking virtually to the annual meeting of the Institute of International Finance.

The S&P 500 index is down marginally ahead of Wednesday’s consumer inflation report.

S&P 500 Technical Outlook

Tuesday’s drop keeps the index below the 4368 resistance, and this could open the door for a further decline towards 4324, with 4300 and 4257 serving as additional downside targets.

Conversely, a recovery beyond 4368 allows prices to bounce towards 4393, leaving 4422, 4480 and 4545 as the remaining barriers before the bulls can perform a test of new record highs.