S&P 500 futures are up 0.7% on the day and that sets up the cash index to eye a potential ninth consecutive day of gains. It’s been an impressive rebound in Wall Street to say the least, on what has been a lot talking the talk but nothing about walking the walk just yet. This time around, China is the one reportedly delivering some hopeful optimism here. Is that opening a slight gap in the door for Trump? We’ll see. But for now, we’re not at the point of picking up the phone just yet on either side.
In any case, the S&P 500 now looks poised to recover the 61.8 Fib retracement of the fall since February as the rebound continues.
That is encouraging but there will be bigger technical hurdles to get through just above that. The 100 (red line) and 200-day (blue line) moving averages will present key challenges before thinking about retesting the highs near 6,000 to 6,100 again.
Besides trade developments, we also had Amazon and Apple earnings come in. And while both delivered better than estimates, the latter does have a caveat. Greater China sales roughly met estimates with a $16.0 billion figure but that is down a little over 2% compared to a year ago. That is evident of a shift in spending mindset and perhaps the toll taken from the US-China trade rhetoric spilling over into consumer behaviour. If anything, we’ll likely see this figure shrink the longer the trade war rages on.
As for the day ahead, there will also be the US jobs report to look out for. Any thinking of layoffs in logistics and retail related to tariffs should be quickly dispelled here as it is still too early to see that show up in the data.
It will still take a few months of hard data hitting hard before really leading to freight and trucking services to cut labour costs. But when it starts to hit, the cascading effect can be quick to catch on. So, just be wary of that.
As such, the non-farm payrolls data today shouldn’t be too much of a factor besides looking into the wider impact of DOGE layoffs. If you’re looking for any impact from tariffs here, this isn’t the time yet.
And that means trade headlines or should I say Trump headlines, will continue to take on more importance.
This article was written by Justin Low at www.forexlive.com.
