06.03.2020 S&P 500 Daily Analysis

06.03.2020 S&P 500 Daily Analysis

  Today brings Non-Farm Payroll -

Change in the number of employed people during the previous month, excluding the farming industry;

numbers out of the US. We’re now at the point where slowdown from Coronavirus may start to show in US data, similar to what’s been happening in China after last month’s 5.4% Consumer price index a Price Index measuring changes in the price level of a weighted average market basket of consumer goods and services purchased by households and last week’s Chinese Purchasing Managers' Index which is an index of the prevailing direction of economic trends in the manufacturing and service sectors) print that came-in below the 30-marker. Last week alone saw the S&P fall by as much as 15%, erasing the entirety of 2020 gains in the index. Last Friday produced a mercy bounce into the weekend, and that theme of strength has so far stuck around this week, with price action retracing up to the 50% marker of this recent sell-off. That resistance came into play on Tuesday, remained throughout the session yesterday, and sellers are taking another swing today ahead of the US equity open. Given that this threat is rather new in the US, it’s a point of interest to see how much it impacted hiring in February and this will be the first look at that data that traders will get to peek at. While on its face this should be positive for US corporations and US equity, the fact that data hasn’t really reflected much of a slowdown (yet) and also given the fact that this risk is still permeating throughout the US, that emergency action appeared to trigger more alarm than security. Market participants are now wondering what the Fed might know that isn’t yet public or, whether there’s a larger risk on the horizon that is waiting to show itself.