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S&P 500 Market Analysis

1/5/2023 1:15 PM

The leading US economy index S&P 500 is correcting, trading at around 3850.0.

The American stock market is under pressure after yesterday's publication of the minutes of the US Federal Reserve meeting, which indicated a high probability of continuing the implementation of the "hawkish" policy. Most regulator officials believe that disruptions in the global supply chain, as well as increased inflationary risks, will persist for at least another year. Thus, the US Federal Reserve's Open Market Committee (FOMC) hinted that the interest rate will be raised at the next meeting, and analysts' forecasts indicate an 80% probability of this scenario.

The US bond market began 2023 with a local decline, which kept the index from falling more rapidly. Popular 10-year Treasuries are trading at 3.718%, down from the 3.879% recorded at the end of last year, and conservative 20-year bonds are trading at 3.9871%, down from the 4.1485% shown at the end of December.

The growth leaders in the index are Bath & Body Works Inc. (+10.51%), Carnival Corp. (+9.66%), Warner Bros Discovery Inc. (+8.80%), Paramount Global Class B (+8.38%).

Among the leaders of the decline are Arista Networks (-5.85%), Microsoft Corp. (-4.37%), Cigna Corp. (-3.48%).

The index quotes continued the local corrective trend and are kept below the support line of the rising corridor on the daily chart.

Technical indicators have already reversed and issued a sell signal: fast EMAs on the Alligator indicator are below the signal line, expanding the range of fluctuations, and the AO oscillator histogram, having moved into the sell zone, forms correction bars.

Support levels: 3780.0, 3580.0. | Resistance levels: 3920.0, 4090.0.

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