News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Real Time News
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here:
  • RT @mkraju: Manchin signaling he’s open to $1.75T for social safety net bill, per source briefed on matter, but it’s unclear where the pric…
  • Further your forex knowledge and gain insights from our expert analysts @JohnKicklighter and @JStanleyFX on $USD with our free Q4 market analysis guide, available for free today. #DailyFXGuides
  • RT @JournalistRoss: From CNN's @mkraju: The goal among Democratic leaders is to have a vote Wednesday or Thursday on the infrastructure pac…
  • *Reminder: Weekly Strategy Webinar tomorrow at 8:30am ET on @DailyFX !!
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here:
  • Wow Liverpool...
  • With the $SPX, Bitcoin and Fed 2022 rate forecasts pushing record highs; the heavy economic docket for the coming week will make for some loaded trading potential. The events and markets I'm looking at ahead:
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here:
  • Further your stock trading knowledge and gain informed market analyses from our expert analysts @HathornSabin and @JMcQueenFX on Indexes with our free Q4 guide, available today. #Dailyfxguides
S&P 500 Index Perched At Key Support as Fiscal Aid Hopes Evaporate

S&P 500 Index Perched At Key Support as Fiscal Aid Hopes Evaporate

Daniel Moss, Analyst

S&P 500 Index, Congressional Stimulus Negotiations, Q3 Earnings Season, Federal Reserve – Talking Points:

  • Equity markets slid lower during APAC trade as Covid-19 second wave concerns weighed on growth-sensitive assets.
  • The absence of a fiscal aid package this side of the US presidential election may divert capital to ‘safe havens’ in the coming days.
  • S&P 500 index is at risk of further losses as price struggle to push above key resistance.

Asia-Pacific Recap

Equity markets slid lower during the Asia-Pacific trading session, as a record surge in coronavirus cases notably weighed on growth-sensitive assets.

The Australian ASX 200 index plunged 1.7% despite Victoria, the nation second most populous state, recording no new Covid-19 cases for the second successive day, while Hong Kong’s Hang Seng index slid 0.46%.

Surprisingly, the cyclically-sensitive Australia, New Zealand and Canadian Dollars outperformed the haven-associated Japanese Yen and US Dollar, as crude oil prices recovered lost ground.

Gold nudged marginally higher while silver climbed over 1%, as yields on US 10-year Treasuries held firm at 0.80%.

Looking ahead, Spanish third-quarter unemployment figures headline the economic docket alongside US durable goods orders for the month of September.

S&P 500 Index Perched At Key Support as Fiscal Aid Hopes Evaporate

DailyFX Economic Calendar

Positive Earnings Season Dismissed by Investors

Despite a relatively positive earnings season, the US benchmark S&P 500 index has fallen as much as 5% from the monthly high set on October 12 (3541), as pre-election jitters and fading fiscal stimulus hopes continue to weigh on market sentiment.

120 out of the 145 S&P 500 companies that have reported third-quarter profits beat bottom-line expectations for earnings, while 108 beat sales estimates.

With only 7 days until the US presidential election and the Senate set to leave for break after successfully confirming Supreme Court nominee Amy Coney Barrett, the provision of much-needed fiscal support this side of November 3 appears almost impossible.

S&P 500 Index Perched At Key Support as Fiscal Aid Hopes Evaporate

Data Source – Bloomberg

The inability of US policymakers to break the deadlock in bipartisan negotiations is likely to concern several members of the Federal Reserve, with Chairman Jerome Powell warning that the absence of “an additional pandemic-related fiscal package” could see growth “decelerate at a faster-than-expected pace in the fourth quarter” and governor Lael Brainard stating that “apart from the course of the virus itself, the most significant downside risk to my outlook would be the failure of additional fiscal support to materialize”.

In fact, with the central bank’s balance sheet expanding for three-consecutive weeks for the first time since June, it seems as though the Federal Reserve may attempt to pick up the slack in the interim, which could limit the potential downside for regional equity prices.

That being said, with the US averaging over 70,000 new cases of coronavirus a day and high-frequency data showing a notable slowdown in all three mobility trends – driving, walking and transit – a period of risk aversion looks likely in the coming days.

Therefore, the S&P 500 index could extend its declines ahead of the US presidential election on November 3, should investors cut back on their exposure to risk-associated assets in the absence of additional fiscal support.

S&P 500 Index Perched At Key Support as Fiscal Aid Hopes Evaporate

Data Source – Bloomberg, Apple Mobility Data

S&P 500 Index Futures Daily Chart – Support at 3350 May Prove Pivotal

From a technical perspective, the S&P 500 index could be poised to rebound back towards the monthly high (3541), as price holds above confluent support at the February high (3397.50) and trend-defining 50-day moving average.

However, a bearish crossover on the MACD indicator, in tandem with the RSI tracking below its neutral midpoint, suggests that the path of least resistance is lower.

A daily close below the October 26 low (3356) is needed to invalidate the Ascending Channel pattern that has guided price higher over the last 7 months and carve a path to test the 38.2% Fibonacci (3306).

Conversely, a break back above the 21-DMA could inspire a more extended topside push and bring the October high (3541) into focus.

S&P 500 Index Perched At Key Support as Fiscal Aid Hopes Evaporate

S&P 500 index futures daily chart created using TradingView

S&P 500 Index Futures 2-Hour Chart – Descending Pitchfork Guiding Price

Zooming into a 2-hour chart however, suggests that price could continue to rebound higher, as buyers successfully defend support at the 50% Fibonacci (3369.50) and drive the S&P 500 index back above the February high (3397.50).

Moreover, a bullish crossover on the MACD indicator may encourage would-be buyers and ultimately ignite a push back towards the 200-MA (3442.45), if resistance at the pitchfork median and October 26 low (3412) gives way.

On the other hand, a continuation of the index’s two-week downtrend could be in the offing if resistance holds firms, with a breach below the 3350 mark potentially opening the door for a push back towards the 61.8% Fibonacci (3329).

S&P 500 Index Perched At Key Support as Fiscal Aid Hopes Evaporate

S&P 500 index futures 2-hour chart created using TradingView

-- Written by Daniel Moss, Analyst for DailyFX

Follow me on Twitter @DanielGMoss

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.