The red market and growing concerns
After the losses of Asian stock markets, European continued the way, and now it's Wall Street's turn to disappoint investors. In the meantime, tech-heavy NASDAQ led the slump with more than 3%, while SP500 and Dow Jones Industrial average followed the same sentiment with about 2% and 1%, respectively. While inflation and economic growth concerns have disturbed the markets, earlier comments and earnings forecast from Snapchat-owner Snap Inc. (NYSE: SNAP) added to the market risks.
Snap Inc. plummeted 42% to drag down other tech stocks as well. On the economic data front, today we had the Purchasing Managers index from all developed economies, and other than the German Manufacturing PMI, May numbers in all other economies disappointed analysts by showing that economic growth has slowed sharply.
While "IMF Managing Director Kristalina Georgieva said the war, tighter financial conditions, and price shocks - for food in particular - have clearly "darkened" the outlook in the month since the IMF cut its global growth outlook" market risk with USVIX around 30, and US 10-year bond yields falling sharply towards 2.73% increasing sharply.
Earlier today in Asia and as a response to the latest slowdown in the global economy, China announced that they would increase tax credit rebates, postpone social security payments and loan repayments, roll out new investment projects, and some other steps to support the economy. China and Japan still have no inflation concerns, and at the same time, they have enough resources to use. These positive signals from both mentioned economic powers raise hopes of preventing a severe recession.
Technical indicators remain bearish. From the technical point of view, SP500 in a bearish trend has strong support at 3,850. At the same time, the OBV trend line crosses the 20-DMA, signaling a possible trend reversal. On the flip side, 4,130 is the first strong resistance with a decisive level at 200 DMA at 4,460. The price trend can change if the asset price can increase above 200-DMA.