S&P 500, NIKKEI 225, ASX 200 INDEX OUTLOOK:
Fed, Tech, Reflation, BoE, Asia Pacific Open:
The reflection theme seems to be in the middle again this week, with technology worse than the cyclical sector of Wall Street. Reopening optimism In the United States and Europe, commodity prices rose to their highest level since 2011, according to an index compiled by Bloomberg. Energy was the best performing S&P 500 sector on Wednesday, followed by materials and financial data. The Dow Jones index reached a record high after a 0.29% rise, while the Nasdaq 100 index fell for four days in a row.
A further discrepancy between growth and value stocks can be observed, as the US aims to have 70% of adults vaccinated before 4 Julyth. It allows even more removal of locking measures and business normalization, which may increase demand for digital goods and services. The upcoming summer driving season may increase demand for fuel, entertainment and tourism services.
Several Federation officials commented on Dovishi inflation outlook, which suggests that the central bank may not soon begin a discussion on reducing its monetary easing. Richard, Vice President of the Federation Clarida said in a TV interview that “if we reopen, there will be some (price) movement, but it will not last long”. The DXY US dollar the index stabilized at around 91.26 as traders awaited a decision on BoE interest rates, preliminary US weekly data on unemployment claims, and calls from several Fed members later today.
S&P-GSCI Commodity Index Futures
Chart by TradingView
Asia and the Pacific markets is placed mixed to open. Futures in Japan, Australia, Hong Kong, South Korea and Taiwan are slightly higher. However, people in mainland China, Singapore, Malaysia, India and Thailand are in the red. Higher trading volumes are expected as Chinese, Japanese and South Korean investors return to the market after the holiday break.
Japan’s Nikkei 225 index has entered a range-related condition since mid-February and appears to be continuing. Recent increases in raw materials and energy prices may lead to higher production costs for Japanese producers, to the detriment of profitability prospects. Japan is the fourth largest in the world oil importer and therefore increases crude oil prices can act as a negative catalyst for the stock market. Meanwhile, the Tokyo and Osaka regions are still in a state of emergency, further considering the mood.
Looking to the future BoE interest rate decision headlines the economic gap alongside US weekly unemployment claims. The Bank of England is expected to keep its policy rate unchanged, but some analysts expect the central bank to provide guidance on reducing its quantitative easing as the economy recovers. This can be the main catalyst for the program British pound. Learn more at DailyFX calendar.
Looking back at the end of Monday, 5 out of 11 S&P 500 sectors finished higher, with 55% of the index components closing in green. Energy (+ 3.33%), materials (+ 1.32%) and finance (+ 0.94%), utilities (-1.71%) and real estate (-1.52%) lagged the most.
S&P 500 Activities of the sector 05.05.2021
Source: Bloomberg, DailyFX
S&P 500 index technical analysis
The S&P 500 index rose 161.8% after falling from the Fibonacci expansion level (4,125). An immediate obstacle can be found in 4268 – 200% Fibonacci extension. The general trend remains bullish-biased, as shown by upward-moving moving averages. The MACD indicator formed a falling intersection and headed lower, suggesting that the upward momentum may subside.
S&P 500 Index – Everyday Diagram
Nikkei 225 Index Technical Analysis:
The Nikkei 225 index reached a consolidation phase after failing to break 30,214 resistances in the third attempt (127.2% Fibonacci extension). You can find the immediate support level at 28 357 (100% Fibonacci extension). The MACD is lower, indicating a likely further consolidation.
Nikkei 225 register – Everyday Diagram
Chart by TradingView
ASX 200 index technical analysis:
The ASX 200 index exceeded the resistance level above 7071 (100% Fibonacci extension) and thus opened the door to further upside potential in view of 7261 (127.2% Fibonacci extension). The MACD indicator is forming a bullish crossover, indicating an increase in buying pressure.
ASX 200 index – daily schedule
– Wrote DailyFX.com strategist Margaret Yang
Use the Comments or section below to contact Margaret @margaretyjy Twitter