Recent Q1 financial profits push S&P 500 higher

Stocks in the United States finished higher on Monday, thanks to increases in the financial, industrial, and utility sectors. The financial sector rose more than 1% on first-quarter earnings in banking stocks, while confidence in market growth in the technology business group has decreased due to pressure on Treasury yields, which rose amid concerns about the Federal Reserve raising interest rates by 25 basis points at its meeting next month. The rate increase is projected to be supported by the New York Fed's Empire State Index, which shows manufacturing activity increased to 10.8 in April for the first time in five months, exceeding the predicted result of -18.0.

The S&P 500 Index is heavily influenced by banking stocks. Financials gained 1.1%, manufacturing gained 0.8%, underweight real estate gained 2.2%, and energy stocks lost 1.3%.

Investors are still waiting for more earnings reports to be reported this week, including Johnson & Johnson (NYSE:JNJ), Tesla (NASDAQ:TSLA) Inc and Netflix Inc (NASDAQ:NFLX), especially from the big banks, including Goldman Sachs Group Inc (NYSE:GS), Bank of America Corp (NYSE:BAC) and Morgan Stanley (NYSE:MS), after JP Morgan Chase (NYSE:JPM) & Co, Citigroup (NYSE:C), and Wells Fargo (NYSE:WFC) scooped up interest-rate gains in their first-quarter reports issued last week while the banking system's fears began to ease.

However, earnings for S&P 500 businesses are forecast to fall 4.8% in the first quarter compared to the same period last year, according to Refinitiv IBES. In addition to the earnings report, the market will be looking at the performance of consumer discretionary companies in the coming weeks to see where the US economy is headed in the face of persistently high inflation and the effects of the Federal Reserve's most intense interest rate cycle since the 1980s.

Last year, the US consumer market was also quite strong, despite rising interest rates, which increased the cost of mortgages and credit card loans. However, widespread layoffs from tech companies and organizations in the first quarter, as well as the recent banking crisis, are expected to have an impact on many households, causing them to cut their spending on entertainment, restaurants, cars, and hotels, and causing overall US stock market volatility during earnings reports. The outlook is expected to become clear after the market receives additional information from Fed officials on the path of interest rates in May.

Data for Technical Analysis (5H) CFD US 500 [S&P 500]

Resistance : 4154.3, 4157.9, 4163.7

Support : 4142.7, 4139.1, 4133.3                      

5H Outlook

Source: Investing.com                  

Buy/Long 1 If the support at the price range 4137.7 - 4142.7 is touched, but the support at 4142.7 cannot be broken, the TP may be set around 4157.0 and the SL around 4134.0, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 4154.3 - 4159.3, TP may be set around 4166.0 and SL around 4139.0, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 4154.3 - 4159.3 is touched, but the resistance at 4154.3 cannot be broken, the TP may be set around 4143.0 and the SL around 4162.0, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 4137.7 - 4142.7, TP may be set around 4130.0 and SL around 4157.0, or up to the risk appetite.       

Pivot Points Apr 18, 2023 03:21AM GMT

Sources: Investing 1, Investing 2