S&P Pushed To Record Levels, But Can It Last?
Fiona Cincotta July 12, 2019 4:08 PM
Earnings & China GDP
Whether the S&P will be able to maintain this level come next week is dubious particularly given that the US – Sino trade war could be back in focus. The week kicks off with Chinese GDP figures. The expectation is that the Chinese economy grew just 6.2% annually in the second quarter as the ongoing trade dispute and slowing global demand hit growth. A reading at this level would mark the worst rate of growth in three decades, a fact which would hit risk sentiment across the globe.
US earning season also kicks off next week with big names, Goldman Sachs, JP Morgan and Netflix all updating the markets. The upcoming earning season is shaping up to be a weak one. Of the 114 companies that have issued guidance for the period, 77% of them have issued negative forecasts. A weak earning season amid the ongoing trade dispute could knock investors’ appetite for risk, regardless of whether the Fed is looking to cut or not.
Levels to watch
S&P is trading above its 50, 100 and 200 sma on the 4 hour chart. It has edged into overbought territory according to the RSI. Should the bulls pause for breath at the start of the new week, support levels to watch for in the region of 2965, 2950 and 2910.
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