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SNP500 Futures on the Rise

The SNP500, and the US stock market in general, were closed due to a bank holiday in the States, however, futures have remained open for traders looking to analyze price movement outside trading hours.

Over the past 2 days, the price of the SNP500 has increased by 1.38% which is a significant amount considering that most trading activity was temporarily paused. During this time, only certain market participants were able to buy and sell via certain ECNs and platforms. However, the increase in value has only formed a retracement so far and remains lower than the previous price wave. The previous wave took place on the 15th and 16th climbing to $3,838.

SNP500 - 21.06.2022.jpg

Traders are looking forward to seeing today’s market activity after the market reopens following a 3-day halt (Sat-Mon). The market participants are, without a doubt, especially intrigued by the gains that SNP500 has recorded over the past 24 hours while the market has been shut.

The price movement may be partially influenced by technical factors related to the price. Over the past 2 weeks, the price has significantly declined due to high inflation levels as well as interest rate spikes. During this period, the index has fallen by over 9.2% alone, with investors fearing that a decrease in people’s disposable income will affect the earnings of companies that the index tracks. This triggered a selloff, bringing the price down to $3,637, but the questions remain; is the newly established lower price enough to entice investors again, and have the interest rate fears begun to wear off?

At the same time, it should be noted that there are factors which are still affecting the index on the negative side. Investor confidence still remains low and we are seeing a similar issue with consumers. Earlier today, Tesla CEO spoke to journalists asking for his opinion on the current situation that the economy is facing. According to Elon Musk, the economy is at a higher risk of witnessing a recession, rather than continued growth. He also stated that the company will make changes to its workforce in order to better deal with the current economic situation. According to the world’s richest man, Tesla and SpaceX will lay off 3.5% of their employees. As a result, the SNP500 saw a slight drop in price, although the price still remains in the highs.

The market will also be looking at the Fed’s scheduled events throughout the week. Fed Chairman, Mr Powell, is due to hold press conferences on both Wednesday and Thursday. So far, the Fed has not confirmed whether they would look to increase interest rates by 50 or 75 basis points. The market will be looking for further confirmation on this topic, because the higher the interest rates go, the more pressure is piled onto the stock market.

NASDAQ has also increased by 0.43% today and the DowJones by 0.60%. Looking at other markets, we can see that Bitcoin has also recorded gains of 1.82% today, and Etheruem of 1.10%. Currently, traders are looking for further confirmation as to whether the market is temporarily buying the dip or if the price can gain momentum to develop a bullish trend.

IMPORTANT NOTICE: Any news, opinions, research, analyses, prices or other information contained in this article are provided as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and therefore, it is not subject to any prohibition on dealing ahead of dissemination. Past performance is not an indication of possible future performance. Any action you take upon the information in this article is strictly at your own risk, and we will not be liable for any losses and damages in connection with the use of this article.
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