There’s unhealthy financial knowledge after which there’s unhealthy financial knowledge. This morning introduced the latter, with U.S. GDP posting
There’s unhealthy financial knowledge after which there’s unhealthy financial knowledge. This morning introduced the latter, with U.S. GDP posting an all-time file decline. One would assume that such a report would ship shares tumbling; and, initially, it did. Nevertheless, the DJIA DOW (-237), S&P 500 SPX (-18), and NASDAQ (+19) have pared losses, buying and selling nicely off intraday lows.
With out additional delay, right here’s a take a look at this morning’s key financial releases:
Occasion Precise Projected Earlier
Persevering with Jobless Claims (July 17) 17.018M 16.200M 16.151M
Core Private Consumption (Q2) -1.1% 1.0% 1.6%
GDP (Q2) -32.9% -34.1% -5.0%
Preliminary Jobless Claims (July 24) 1.434M 1.450M 1.422M
As we’ve talked about over the previous few months, the Jobless Claims numbers might be deceptive because of enhanced COVID-19 advantages. These advantages are because of expire tomorrow. Be looking out for a dramatic downturn in Jobless Claims starting August 13.
Little question about it, the Q2 GDP knowledge is about as unhealthy as it will possibly get. Nevertheless, the -32.9% beat expectations (-34.1%). Proper now, the stress is on Q3 GDP. If it disappoints, then threat property will possible be in for an prolonged interval of ache.
GDP Information Prompts S&P 500 Reversal
Beneath is a take a look at the September E-mini S&P 500 as of Wednesday’s shut. Since then, the robust week has pulled again and the 78% Retracement (3125.75) is coming into view.
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For now, there are two ranges value watching on this market:
- Resistance(1): All-Time Excessive, 3396.50
- Assist(1): 78% Retracement, 3125.75
Backside Line: At this level, my outlook towards the S&P 500 stays bullish. If at the moment’s dreadful GDP knowledge prompts a retracement, then shopping for the dip might not be a nasty solution to play the motion.
Till elected, I’ll have purchase orders queued up within the September E-minis from 3129.75. With an preliminary cease loss at 3123.75, this commerce produces 24 ticks on an ordinary 1:1 threat vs reward ratio.