- Summary:
- Despite upbeat initial jobless claims, the S&P 500 fails to gain traction, which leaves the additional stimulus as the main bullish trigger.
The weekly initial jobless claims has dropped to the lowest levels since the onset of the coronavirus epidemic in the US, according to the latest data from the US Department of Labor.
The number of first-time claims for unemployment benefits dropped from 842K to 787K in the week ended October 17. This figure was lower than the 860K that the markets expected. Despite this upbeat employment number, the S&P 500 failed to get an additional upside boost.
The markets are still focussing on stimulus talks. Comments by US House Speaker Nancy Pelosi have only helped to push the S&P 500 off the intraday lows but has not done much else. Investors seem to have tired of hearing promises and want actual action on the stimulus deal, with less than two weeks to the US elections.
The S&P 500 is currently trading at 3435.8, or 0.02% lower on the day in a trading session that continues to show low volume trading patterns. Low trading volumes have been the hallmark of trading since Tuesday.
Technical Outlook for S&P 500
Price was basically on the way to the 3393.5 support, but the US House Speaker’s comments have temporarily halted the slide. However, the index needs to see some follow-through buying to send the market to the 3481.6 or 3528.9 upside targets. The thin volumes suggest the need for a major fundamental trigger for this: a stimulus deal.
On the flip side, continued delay in getting a deal as the elections draw near could be a bearish signal to induce some short-term selling that brings in 3393.5 or 3335.5 into play. Further downside targets at 3283.2 may seem a bit far off at this stage, but nothing can be ruled out.
S&P 500 Daily Chart
