- Summary:
- S&P 500 index hits new highs after consumer inflation figures for July tank, casting doubt on the follow through actions of the Federal Reserve to taper.
Muted CPI data for July has helped the S&P 500 index to hit new highs above 4400.
The S&P 500 index is currently up 0.23% after the Bureau of Labor Statistics reported a drop in the monthly headline CPI and core CPI numbers from 0.9% to 0.5% and from 0.9% to 0.3%, respectively. The consensus had been for consumer inflation to drop to 0.5% and 0.4%, respectively.
The inflation numbers add another round of confusion to the Fed’s tapering timetable, and investors believe that the latest inflation numbers could cause a tapering delay. This is why the S&P 500 index is climbing on the day.
The rise in the S&P 500 index is led by the financial stocks, which rose +0.66%% after getting support from rising US bond yields. Sliding oil prices continue to weigh on energy stocks, which are collectively down 0.16% as of writing.
Technical Outlook for S&P 500 Index
Price has cleared the 4422 resistance and touched off new highs at 4449. 4453 remains the initial upside target (100% Fibonacci extension), with 4561 serving as an additional upside target.
On the flip side, a decline from present levels retests 4422, with 4393 and 4368 lining up as additional price targets.
S&P 500 Index: Daily Chart
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