US stock index futures are trading fairly quiet on Wednesday, showing no serious dynamics before the market opens. The market quickly recouped its losses recorded at the end of last week, keeping it in balance for now. Apparently, the latest fears due to the new wave of the coronavirus pandemic were exaggerated. Obviously, traders are also not in a hurry to break a significant resistance of $4,665, which can lead to a return to the area of the year's highs. It is better to discuss the technical picture below.
The Dow Jones Industrial Average futures went down 0.11% and the S&P 500 declined just 0.15%. The high-tech Nasdaq 100 lost 0.23%. All three US indices rose in regular trading yesterday. The Dow added 560 points, or 1.6%. The S&P 500 rose by 1.8% and the Nasdaq Composite climbed 2.4%. Stocks of service, gambling and tourism companies showed particularly large gains. Airline stocks also gained significantly.
With such a large market recovery, investors are apparently willing to continue to ignore the increase in the number of coronavirus cases both in the US and around the world. The pressure from central bank meetings is also reducing, causing an increase in traders' appetite for risk later this year. The lack of reaction to the rise in Covid-19 cases also points to new norms, based on which investors may treat new waves of the coronavirus pandemic as a common occurrence, like a flu or pneumonia outbreak.
President Joe Biden delivered a speech yesterday. During the press conference he once again urged Americans to get vaccinated against the coronavirus. He noted that those who had been vaccinated were protected. He also reiterated that the US was not planning to reimpose strict restrictions and isolationist measures seen at the beginning of the pandemic. Biden also noted that his administration would send about 1,000 medical personnel from the armed forces to help hospitals on the ground. Besides, the US government will soon purchase 500 million Covid home tests, which will be free for Americans.
Amid these issues, US stock indexes continued to rise as fears about tougher Covid-19 restrictions were still present in the market.
Today, a number of fundamental data on the US economy will be released. The main focus will be on GDP data for the 3rd quarter of this year as well as the US consumer confidence index.
Let's pre-view the premarket:
As mentioned above, the following stocks showed significant gains yesterday: Delta Air Lines went up 5.9%, United Airlines rose by 6.9% and Carnival added 8.7%.
Currently, on the premarket, Delta Air Lines has already gone up 0.3%, trading at 38.64 and so is Carnival, which has added 0.35%, trading at 20.63.
Tesla stocks have not reacted to the negative news related to the investigation into the company and continue to be in strong demand. It was reported that US auto safety regulators said they had launched a formal safety investigation into the 580,000 Tesla vehicles sold since 2017. The National Highway Traffic Safety Administration noted that its preliminary assessment covers various Tesla cars - Model 3, S, X and Y 2017-2022 model years. Due to the introduction of the Tesla Passenger Play feature, it can be used even while driving. Previously, the play feature was only enabled when the car was not in motion. Tesla did not immediately comment. At the premarket, the company's stock went up 2.66%.
Technical picture of S&P500.
A breakout of the significant support of $4,611 and fixing above the level occurred yesterday. This level will provide support, in case the pressure regains. Its breakout will take the index down to $4,551, below which it failed to break yesterday. The bigger lows of $4,512 and $4,470 are below it. With this market, it is easy to reach them quickly. In case the index rises, exit beyond the resistance of $4,665 will be highly significant. A breakout of this range will make stock in demand, which will take the instrument to the area of $4,718.