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S&P 500 Increased Uncertainty in the US Stock Market
3/20/2023 12:47 PMThe leading US economy index S&P 500 is correcting, trading at around 3915.0.
Investors are watching the development of the crisis in the US banking sector, which began to spread to the financial institutions of the eurozone. After the bankruptcy of Silicon Valley Bank, one of the largest players in the Swiss market, Credit Suisse Group AG, announced that it was impossible to fulfill its obligations to customers, after which the country's government initiated a deal to buy it by its main competitor, UBS Group AG, which set a price of 3.2 billion dollars, which is two times lower than the market capitalization of Credit Suisse. Officials pledged to provide a guarantee to cover potential losses of 9.0 billion dollars, and the regulator committed to allocate 108.0 billion dollars to UBS Group AG to replenish liquidity.
A similar situation is observed in the US, where New York Community Bank announced its intention to buy the bankrupt Signature Bank. The deal will bring 38.4 billion dollars in assets under its management, including 12.9 billion dollars in outstanding loans. Decisions regarding Silicon Valley Bank have not yet been made.
The growth leaders in the index are FedEx Corp. (+7.97%), Newmont Goldcorp Corp. (+5.22%), Teleflex Inc. (+1.56%), eBay Inc. (+1.47%).
Among the leaders of the decline are First Republic Bank (-32.80%), U.S. Bancorp (-9.38%), Enphase Energy Inc. (-8.68%).
The index quotes continue the corrective trend, trading below the local ascending corridor support line with the boundaries of 4000.0–4360.0 on the daily chart.
Technical indicators reversed and issued a new sell signal: fast EMAs on the Alligator indicator are moving away from the signal line, and the AO histogram, being in the sell zone, continues to form corrective bars.
Support levels: 3860.0, 3680.0. | Resistance levels: 3980.0, 4140.0.