US stock market analysis (October 24, 2023)

Create at 1 month ago (Oct 24, 2023 11:01)

Stock Market Turbulence and Earnings Anticipation Amidst Rising Bond Yields

On Monday, the S&P 500 experienced a turbulent day in the stock market as investors grappled with various factors influencing stock performance. These factors included fluctuations in Treasury yields and a rally in technology sector, consumer services, and consumer goods stocks, which was counterbalanced by weaknesses in the energy, financial, basic materials, and telecoms sectors. Additionally, investors were eagerly anticipating the release of quarterly earnings reports from major technology companies later in the week.

Earlier in the day, the U.S. benchmark Treasury yield experienced a brief surge, surpassing 5%, which marked a 16-year high. However, this yield soon retreated, leading to a mixed performance in stock indices. Simultaneously, the oil market was impacted by ongoing conflicts in the Middle East.

The rise in bond yields, combined with the risk of a broader Middle East conflict, had a dampening effect on investor sentiment as they braced for a week filled with major corporate earnings reports and essential inflation data. This overall economic outlook led to a decline in global equity markets, which reached a nearly seven-month low.

The week ahead promised to be eventful, with nearly one-third of the companies listed in the S&P 500 expected to release their earnings reports, and 73% of these companies had exceeded their earnings per share (EPS) estimates.

Microsoft Corporation and Alphabet were set to report their September quarter results on Tuesday, generating significant market interest. In the subsequent days, major companies such as Meta Platforms, International Business Machines (IBM), Amazon, and Intel were scheduled to report their earnings.

In the U.S. bond market, investors were bracing themselves for potential shifts in response to key economic data releases. This included estimates for third-quarter GDP growth and the Personal Consumption Expenditures (PCE) index, both of which could disrupt bond yields, particularly if they exceeded market expectations.

Additionally, the upcoming data on U.S. GDP was anticipated to highlight significant economic expansion. This growth was primarily driven by robust consumer demand, despite lingering signs of a possible recession and a resilient labor market that continued to show stability. Hence, it is anticipated that these factors will continue to impact the broader U.S. stock market index, although there may be some room for upward adjustments during this timeframe. However, the overall upward trajectory is expected to be constrained over the long run.

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

Resistance : 4240.3, 4247.5, 4259.1

Support : 4217.1, 4209.9, 4198.3             

5H Outlook

US stock market analysis Source:                 

Buy/Long 1 If the support at the price range 4199.1 - 4217.1 is touched, but the support at 4217.1 cannot be broken, the TP may be set around 4243.1 and the SL around 4190.0, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 4240.3 - 4258.3, TP may be set around 4270.0 and SL around 4208.0, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 4240.3 - 4258.3 is touched, but the resistance at 4240.3 cannot be broken, the TP may be set around 4212.7 and the SL around 4267.0, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 4199.1 - 4217.1, TP may be set around 4185.0 and SL around 4249.0, or up to the risk appetite.       

Pivot Points Oct 24, 2023 03:33AM GMT

Pivot Points
Classic 4182.3 4198.3 4212.7 4228.7 4243.1 4259.1 4273.5
Fibonacci 4198.3 4209.9 4217.1 4228.7 4240.3 4247.5 4259.1
Camarilla 4218.8 4221.6 4224.4 4228.7 4230 4232.8 4235.6
Woodie's 4181.7 4198 4212.1 4228.4 4242.5 4258.8 4272.9
DeMark's - - 4205.5 4225.1 4236 - -

Sources: Investing 1Investing 2

Maximize your knowledge: Blog
Keep up to date on global events: News
Explore in-depth analysis: Analysis