S&P 500 Faces Earnings Verify, Dangle Seng Index Might Rise

S&P 500, HANG SENG INDEX, CRUDE OIL PRICE OUTLOOK:

• S&P 500 index futures climbed 1.05% to three,185, difficult a key resistance
• Dangle Seng index goals to observe the US increased, buying and selling at 25,900 pre-market
• WTI crude oil costs re-test US$ 40.Zero resistance. Will they break it or fail?

S&P 500 Index Outlook:

US markets shrugged off climbing virus instances across the globe and closed firmly increased final Friday. Asia-Pacific equities will seemingly observe and open increased, in keeping with futures markets. The covid-19 pandemic confirmed no signal of fading any time quickly, with Florida reporting a report day by day enhance in instances and a second viral wave seemingly sweeping the globe. Hong Kong has determined to close all faculties as neighborhood instances surge, and Australia’s second largest metropolis – Melbourne – is again to lockdown.

Earnings season is across the nook. Financial institution of America, BlackRock, Citigroup, Delta Airways, Goldman Sachs, JPMorgan, Johnson & Johnson, Morgan Stanley, Netflix and Wells Fargo are among the many key corporates to ship their second quarter outcomes this week. Within the subsequent three weeks, practically 70% of the S&P 500 parts will launch their earnings, bringing to the market a ‘actuality examine’ in gentle of a pointy contraction.

All eleven sectors are seeing their earnings decline in Q2, with vitality (-149.9%), client discretionary (-118.9%), industrials (-88.9%) and financials (-55.2%) among the many hardest hit, in keeping with Factset.

FAANG – which represents the biggest US know-how companies– has outperformed the S&P 500 index this 12 months. Nasdaq has additionally outperformed Dow Jones and S&P 500 year-to-date with a 4.01% achieve. The coronavirus pandemic has modified customers’ habits deeply, with extra folks shifting to e-commerce, streaming, video-conference, gaming and different digital providers. This has underpinned know-how companies’ income on the expense of brick-and-mortar companies.

Supply: Bloomberg, DailyFX

S&P 500 Index –Technical Evaluation

The index is re-challenging a powerful resistance at 3,200, which it failed to interrupt in early June and has subsequently entered into consolidation. The index is using an uptrend which is highlighted by the Ascending Channel beneath. Total momentum stays bullish within the close to time period. A agency break above 3,200 will seemingly open room for extra upside in direction of 3,360 – the 200% Fibonacci extension.

S&P 500 Index – Each day Chart

Dangle Seng Index Outlook:

Hong Kong’s Dangle Seng Index (HSI) inventory market benchmark was in consolidation for many of final week, falling from 26,910 the best to 25,539 the bottom. The index goals to observe the US increased on Monday, rebounding to 25,900 within the pre-market.

The Dangle Seng Index can also be influenced by the mainland China inventory markets, which have additionally consolidated final week. The dearth of elementary assist behind latest inventory market rally rendered the indices susceptible to technical pullbacks.

Technically, the Dangle Seng Index is consolidating at round 25,600, with quick assist and resistance ranges discovered at 25,00Zero and 26,00 respectively.

Dangle Seng Index – Each day Chart

Crude Oil Value Outlook:

Technically, WTI crude oil value is forming an ‘ascending triangle’ since finish of Might. The higher certain of the ‘ascending triangle’ coincides with a powerful resistance at US$ 40.0, which is the ceiling of a ‘hole down’ resulted in early March. If crude oil value might firmly escape US$ 40.Zero it should seemingly open room for extra upside in direction of US$ 43.2 (61.8% Fibonacci retracement) after which US$ 51.7 (76.4% Fibonacci retracement).

WTI Crude Oil– Each day Chart

— Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Feedback part beneath or @margaretyjy on Twitter