Futures on US stock indices collapsed as the disappointing results of the tech giants soured the mood and clouded the prospects for the market. Treasury bonds also declined, and their yield again exceeded the level of 4%. Yesterday's report on the US GDP growth rate became a stumbling block. On the one hand, the economy maintains growth rates even against the background of a rapid increase in interest rates. On the other hand, buyers of risky assets are not happy about this at all, since the reduction in the cost of borrowing will have to wait longer than predicted.
Futures contracts for the high-tech Nasdaq 100 fell by more than 1% due to the fall of Amazon.com Inc. Amazon shares fell almost 20% during the regular session after the tech giant made a rather weak sales forecast for the holiday quarter. Futures for the S&P 500 and Stoxx Europe 600 sank 0.7%. The yield on 10-year Treasury bonds exceeded 4% as the rally in government bonds began to fade. Government bonds reacted this week to rumors that Fed policymakers are preparing to lower interest rate aggression amid weaker economic data, but the latest GDP growth report spoiled everything.
It can be seen that despite the good reporting season, some companies are starting to make bad forecasts. This leads to a decline in the stock market, which was still pumped earlier this week.
Yesterday, the ECB raised the rate by 75 basis points for the second time in a row but abandoned the previous reference that the rate hike would continue for "several meetings," which was considered a dovish approach. The Bank of Japan maintained its negative rate, as well as the 10-year yield limit and asset purchases at the end of a two-day policy meeting, which fully coincided with economists' forecasts.
Chinese assets also remain in the spotlight: this week, foreign investors dumped a record number of mainland Chinese stocks, as a result of which they fell to a 13-year low.
Oil partially sank and leveled its weekly growth, as investors began to avoid risky assets due to the deteriorating prospects for China and the global economy as a whole. West Texas Intermediate oil fell below $88 per barrel.
As for the technical picture of the S&P500, after yesterday's growth, the day did not start very well. The main task for buyers now is to protect the support of $3,773. As long as trading is conducted above this level, we can expect continued demand for risky assets. This will also create good prerequisites for further strengthening the trading instrument and returning $3,808 under control, just above which the level of $3,835 is located. Only such a scenario will strengthen the hope for an upward correction with an exit to the resistance of $3,861. The furthest target will be the area of $3,905. In the case of a downward movement, buyers are simply obliged to declare themselves in the area of $3,773, by analogy with how it was this morning. A breakdown of these ranges will quickly push the trading instrument to $3,735 and $3,699, as well as open up the possibility of updating the support of $3,661.
