Consumer Confidence Plunge But S&P 500 Index Continues Higher

Summary:
• S&P 500 trades higher for the fifth consecutive session ahead of the Fed policy meeting and some important earnings reports later on the week.

S&P 500 trades higher for the fifth consecutive session ahead of the Fed policy meeting and some important earnings reports later on the week. Alphabet will release the quarterly earnings report after the markets close. Facebook and Microsoft will report on Wednesday and Apple and Amazon on Thursday.

The Conference Board Consumer Confidence Index dropped to 86.9 in April from 118.8 in March, marking the lowest reading since 2014. The US April Richmond Fed manufacturing index dropped at -53 below the expectations of -41; the March reading was at 2. The manufacturing Shipments slumped to -70 below the March reading of 13. The Richmond Services index came in -87 well below the March reading of 1.

The US March advance goods trade deficit came in at -$64.2 billion well below the expectations of -$55.0 billion, the previous reading was a deficit of 56.36 billion. The US wholesale inventories came at -1% for a March below the expectations of -0.4%.

S&P 500 is almost 19% higher in April marking the best month since January 1987, while from the coronavirus sell-off and March lows is over 32% higher.

Download our Q2 Market Global Market Outlook

S&P 500 Technical Analysis

S&P 500 is 0.61% higher at 2,893 but off the daily highs after worse than expected consumer confidence data. The index looks strong above the 50-day moving average, and an attempt to 100-day moving average can’t be ruled out for now. Long term outlook remains bearish, and only a break above 3,024 (100-day moving average) can cancel that.  

Looking at the daily chart, the first resistance for the S&P 500 index will be met at 2,920 the daily top. The next level to watch is at 2,965 the high from March 9 trading session. A close above will give buyers the upper hand and an attempt to 3,008, the 200-day MA would be the next target. 

On the other side, the daily low at 2,858 will provide the first support for the S&P 500 index. A break below 2,858, might open the way for 2,781 the 50-day moving average. If sellers pierce that level, then the next support stands at 2,729 the low from April 22.