S&P 500 Forecast: Update Bulls back in control as doves fly


Here is what you need to know on Wednesday, February 24:

Update at 1330 EST: S&P again back in the green as stocks recover and the chart begins to recapture its bullish momentum. All sectors are in the green with energy and financial still leading the way. The Nasdaq is lagging being up only 0.5% while the S&P and Dow are both over 1% higher. Fed Vice Chair Clarida backs up the doveish tone emanating from Fed Chair Powell earlier and the FDA report on the JNJ vaccine also helps markets. Gainers include Airbnb up 9%, Boeing up 7%, and Tesla up 5%. Losers include Square down 6%, Baidu down 5%, and Lowe's down 3%.

Technically the S&P now has a bullish engulfing candle and is sitting back above 21 day moving average. So a positive close is needed to confirm this bullish signal. 

S&P

Update at 11 am EST: so far so good, all back to normal, markets back in the green! S&P up 0.1% and Dow up 0.3%. Energy stocks continue to be strong with the XLE Energy Sector up 2.5% and again financial stocks join in, showing a rise of 1%. Tech stocks again the laggard as the Nasdaq is down 0.9% US New home sales were stronger than expected at 923k versus 885k expected. Fed Chair Jerome Powell is speaking before congress says "we want inflation expectations anchored at 2%, not below". 

 

Bears looked set to take over the narrative in stock markets on Tuesday but were rebuffed by Federal Reserve Chair Jerome Powell who downplayed inflation concerns that had been dominating bearish arguments of late. S&P and Nasdaq had all opened lower on Tuesday and looked set for an ugly session but the comments pushed markets to recover, with only modest losses incurred. Tech stocks have continued to out-suffer as the market looks to rotate into cyclical names as economies vaccinate and re-open. Travel and leisure stocks are again strong in Europe. 

The dollar rebounded modestly with the EuroDollar at 1.2135, Cable flat at 1.4110. Oil continues to push on with WTI at $62 and US 10 Year pushing higher again at 1.40% on Wednesday.

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European stock markets are mostly in the green on Wednesday with EuroStoxx up 0.3%, Dax up 0.7%, and FTSE a more modest 0.1% gain.

US futures are pointing higher with the Nasdaq up 0.1%, S&P up 0.3%, and Dow futures up 0.1%.

S&P

See S&P 500 Technical analysis

S&P 500 News

Facebook and Australia appeared to have made up. Rod Sims, the chairman of the Australian Competition and Consumer Commission said that the ACCC is “extremely pleased” to see the amended legislation, dubbed the news media bargaining code, progressing through Australian Parliament this week, according to CNBC.

Tesla shares have been under pressure lately but this may be about to change as Cathie Wood's ARK Invest ups stake in Tesla. Cathie Wood told Bloomberg on Tuesday she’s particularly bullish on Tesla’s ride-hailing service as a bridge to autonomous driving. “We do not think many analysts are giving Tesla credit for autonomous. If they were, the stock would be a lot higher,” she added.

Boeing still in the news as the Federal Aviation Authority orders some inspections of Boeing 777 engines, Reuters reports.

Lowes continued on from Home Depot with strong results as sales beat expectations. Shares are currently up 1.5% in the pre-market.

Gamestop CFO Jim Bell is to step down next month.

Churchill Capital IV and Lucid merger details continue to be examined as Lucid CEO outlines plans for future to Reuters and investors saying the Lucid Air Dream edition "virtually sold out".

AstraZeneca and the EU look set to lock horns again as AstraZeneca says it expects to deliver less than half the vaccine doeses for covid-19 it was contracted to in the second quarter of 2021 according to Reuters.

Economic Releases GMT

15:30 US Fed's Brainard speech SPEECH

15:30 US EIA Crude Oil Stocks Change(Feb 19) -5.372 M-7.258 M

18:00 US Fed's Clarida speech SPEECH

18:00 US 5-Year Note Auction 0.424 %

21:00 US Fed's Clarida speech 

 

Ups and Downs

Canaccord upped Thompson Reuters to buy from a previous hold.

Citi upgraded Mattel. Mattel holds an investor day on Wednesday.

Rosenblatt and KeyBanc raised their price targets for SNAP.

Credit Suisse raised the price target for Bank of Montreal.

Raymond James raised Wells Fargo's price target.

Results due aftermarket

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