THE GIST (“THE WHAT”)
The S&P 500 Index wavered between 20 points to close the first day of the month mostly flat at 4167.88, down slightly by 1.61 points (-0.04%) ahead of the keenly awaited Fed’s 2-day policy meeting. Markets also digested fresh flow of earnings alongside mixed bag of economic data.
Note: Our daily “S&P 500 Trading plan” will be posted around 9:30/10:00am EDT, every trading day.
For the Trading Plans published this morning, please click here
For the last published Results of the Morning Trading Plans, please click here
THE DETAILS (The “How & Why”):
The index pushed higher at the open following the weekend news that JP Morgan &Chase will take over the troubled lender First Republican Bank, the third bank to fail since March after the Fed stepped up its emergency measures to stabilize the banking sector following tumultuous collapse of Silicon Valley Bank and Signature Bank.
Markets seems to be in a holding position ahead of the conclusion of the Fed’s two-day policy meeting on Wednesday, closely looking for any cues the aggressive monetary policy tightening will be coming to an end soon. Investors are broadly expecting one last hike of 25 basis points before pausing.
Mixed economic data and earnings kept the day’s gains capped. Gyrating within a 20-point range, the index closed near day’s lows. The defensive stocks were however in favor in today’s mild risk-off session. Meanwhile, energy stocks traded lower alongside a slide in oil prices following weaker-than-expected economic data out of China.
Economic data out of U.S. also came in mixed, with ISM index pointing to slower contraction. The employment index suggesting a slight expansion in over two months of contraction and the US manufacturing PMI index rose slightly, signaling first expansion in manufacturing activity in almost six months, but still shy of analyst’s projections.