S&P 500
Markets will start out the week with the French presidential election on their minds, but to what impact it will have on U.S. markets likely depends on the magnitude to which Europe moves, and any reaction the U.S. has may be short-lived. Looking to key economic events on the docket; ‘high’ impact data releases include Consumer Confidence on Tuesday, Advanced Goods Trade Balance and Durable Goods Orders on Thursday, and 1Q GDP on Friday. President Donald Trump announced on Friday that he will unveil a tax plan this coming week. Markets will almost certainly show a response once the details are released.
Last week, the S&P closed higher after two consecutive down weeks, but is struggling to overcome a top-side trend-line running down off the March 1 record high. A solid close above this line of resistance, along with a recapturing of the November trend-line and break above the 4/5 swing high at 2378 will be considered a big positive; significantly increasing the likelihood the multi-week correction is over. However, if the market can’t push above noted levels we look for it to move lower towards the 4/13 low at 2329 and March low of 2322, and possibly carve out a lower low towards 2300. The final line of support should selling become aggressive will be the trend-line rising up from the February 2016 low. Overall, price action in recent weeks – whether a rally commences from here or from lower – is viewed as a correction of the ‘Trump Trade’, and will likely lead to new record highs down the road.
S&P 500: Daily
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For a longer-term view on markets, check out our Q2 forecasts.
FTSE 100
To start the week, markets will take interest in how events pan out with the French presidential election. U.K. election headlines will remain a constant risk moving forward. Looking to the economic calendar the only ‘high’ impact data set to be released is 1Q GDP on Friday. For the full schedule of data to be published, see the economic calendar.
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