S&P 500 futures are lower after the U.S. economy contracted at the highest rate since the Great Depression. The second-quarter GDP report came in 32.9% lower, which was more than triple the previous all-time decline of 10% in 1958. The COVID-19 pandemic was to blame for consumer and business spending slowing and is threatening the recovery for the U.S. economy. However, the report came in below expectations of a 34.7% decline predicted by economist. Also, tech giants Apple (AAPL), Amazon (AMZN), Alphabet (GOOG), and Facebook (FB) will report second-quarter earnings later today.
The S&P 500 moved out of the current trading range of 3198.59-3233.13 and closed higher at 3258.44. The move came with higher volume, and the RSI index also moved close higher at 60.24 to support the up move. The next level of potential support could come in at 3279.23, and possible support could come in at 3233.13. Currently, the index is forming a long constructive base that typically leads to a breakout to new highs.
We are currently long-term bullish and short-term bullish.
John N. Lilly III CPFA
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJ
Windsor Wealth Planners & Strategist
Futures trading is speculative, leveraged, and involves substantial risks. Investing always involves risk, including the loss of principal, and futures trading could present additional risk based on underlying commodities investments.
The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum oscillator that measures the speed and changes of price movements.
The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S stock market. Past performance may not be indicative of future results. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investors’ results will vary. Opinions expressed are those of the author John N. Lilly III, and not necessarily those of Raymond James. “There is no guarantee that these statements, opinions, or forecast provided herein will prove to be correct. “The information contained was received from sources believed to be reliable, but accuracy is not guaranteed. Investing always involves risk, and you may incur a profit or loss. No investment strategy can guarantee success. The charts and/or tables presented herein are for illustrative purposes only and should not be considered as the sole basis for your investment decision. International investing involves special risks, including currency fluctuations, different financial accounting standards, and possible political and economic volatility. Investing in emerging markets can be riskier than investing in well-established foreign markets.
This is not a recommendation to buy or sell any company’s stock mentioned above.