Market Analytics and Technical Considerations
Key Points
In November, US companies added 127K jobs (200k est., 233k prev.)
S&P 500 Seems Vulnerable; More Decline to Come.
Jobs were created by US businesses at the slowest rate as January 2021, with the construction industry leading the way, followed closely by industries that are affected by rising interest rates. Advances were seen in market segments that cater to consumers, with the healthcare and hotel industries taking the lead.
The report implies that the Federal Reserve’s compression is having a bearing on job growth and salary increases, according to Nela Richardson, chief economist at ADP. Additionally, businesses are no longer functioning in a hyper-replacement manner. Less individuals are giving up, and the post-pandemic resurgence is becoming more stable.
Even if there are still indications of a healthy job market, the downturn is expected to make the Federal Reserve’s position more challenging going into its Meeting in December. The job market’s resilience and sturdiness have been highlighted by policymakers as evidence that the economy can survive further rate increases. The ‘latency impact’ of interest rate increases on income growth (annual salary declined from 7.7% to 7.6% in November) and the employment market, however, may finally be showing signs of success, according to today’s ADP print.
For the next hints on the Fed’s thinking, the markets will now switch their focus to Fed Chair Powell, PCE statistics, in addition to the NFP Jobs report on Friday. In Friday’s NFP data, it is anticipated that hiring slowed down in November while the unemployment rate remained stable at 3.7%.
The US Dollar was weak before the bell rang in New York, and the S&P was also having trouble. The Dollar Index and the S&P 500 appear susceptible to further declines in light of the wider picture. The S&P 500’s technical indicators appear to be preparing for a breach of the rising trendline, which might result in a revisit of the 50-day MA, which is now sitting just below the 3800 mark.
Conversely, if the index were to move higher from here, it might challenge the long-term falling trendline that is positioned around at the 4100 region before encountering moderate resistance.
Important Intraday Levels
Support Zones
3920
3800
Resistance Zones
4040
4100
