For the past few days, U.S. stock market has been shrugging off bad or lackluster economic news and marches right along. Thursday, June 2nd was no different. On Wednesday, S&P 500 futures first tanked and then recovered. It was a repeat performance on Thursday. Despite the fact that the big Kahuna of economic report is going to be released on Friday. A day before, the markets were supposed to await it with batted breath but didn’t.
Overnight, bourses were mixed in Asia. Shanghai Composite did well but, in Japan, Nikkei 225 tumbled when Prime Minister Shinzo Abe disappointed investors by failing to provide details of a fiscal stimulus package.
Before NYSE session open, the European were tentatively awaiting ECB rate decision and press conference. The overall suspense was too much for the futures and they trailed off and open the NYSE trading with 5.50 points behind Wednesday’s close. Then market fell even more before staging a recovery by the end of first-half hour of trading. S&P 500 closed at the highest level since November 03, 2015.
the 30-minute chart of S&P 500 Futures shows that the price has broken out of a rectangle trading box. The high of the box is 2099.25 and the low 2083.25, giving the measured target near 2115.25, an area where the underlying index may face resistance. The resistance looming ahead for S&P 500 is 2116,48, the high reached on November 3, 2015.
Markets are forward looking so they have already discounted the Non-Farm Payroll numbers to be released on Friday. Also, markets have taken into account the increasing odds of imminent Fed-Funds rate. Yet, they have been rising for the past few days. So, unless the NFP disappoints too much or shows a very high gain, chances are high that the current inertia will be maintained and the upward march would continue.
There is another unknown waiting later in the month – Brexit. It’s outcome is uncertain and hence its impact on global markets is also uncertain at the moment.