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S&P500 Futures continues downside on slowdown fears, yields refresh multi-month low

  • Market sentiment remains negative as lower US PPI has pushed S&P500 valuations to the expensive side.
  • Firms have been forced to trim the prices of their offerings to match weaker demand.
  • Lower US PPI-inspired downward revision for inflation projections has sent US Treasury yields to a multi-month low.

Intense sell-off by the market participants in the United States equities after a weak US Producer Price Index (PPI) December report and monthly Retail Sales on Wednesday has been carry-forwarded to Thursday morning. S&P500 futures are facing the heat as firms have been forced to trim the prices of goods and services at their factory gates to maintain equilibrium with declining retail demand.

At the press time, S&P500 futures displayed mild losses and further dropped to near 3,925.00, portraying a deep shrink in investors’ risk appetite.

The headline US PPI dropped to 6.2% against the consensus of 6.8% on an annual basis. And, the core PPI that excludes oil and food prices was trimmed to 5.5% from the expectations of 5.9%. Apart from that, monthly Retail Sales contracted heavily by 1.1% vs. the estimates of -0.8%. As producers have been forced to trim offered prices to maintain the overall sales, valuations of various firms have scaled to the expensive side amidst the earnings season, which forced investors to dump American stocks. This might also force producers to trim the scale of their offerings ahead, which could trigger a slowdown due to a fall in production activities.

Lower-than-anticipated US PPI report is inspiring for a further decline in the inflation projections. This has bolstered the case of deceleration in the pace of hiking interest rates by the Federal Reserve (Fed) in monetary policy meetings ahead.

Reuters reports that Philadelphia Fed President Patrick Harker reiterated on Wednesday that he's ready for the US central bank to move to 25-basis-point interest rate hikes amid some signs that hot inflation is cooling off.

SP 500

Overview
Today last price3927.52
Today Daily Change0.00
Today Daily Change %0.00
Today daily open3927.52
 
Trends
Daily SMA203885.5
Daily SMA503933.55
Daily SMA1003862.54
Daily SMA2003951.29
 
Levels
Previous Daily High4012.87
Previous Daily Low3925.3
Previous Weekly High4003.12
Previous Weekly Low3869.65
Previous Monthly High4116.92
Previous Monthly Low3761.43
Daily Fibonacci 38.2%3958.75
Daily Fibonacci 61.8%3979.42
Daily Pivot Point S13897.59
Daily Pivot Point S23867.66
Daily Pivot Point S33810.02
Daily Pivot Point R13985.16
Daily Pivot Point R24042.8
Daily Pivot Point R34072.73

Author

Sagar Dua

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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