Regardless of expectations of two extra rate of interest hikes by the Fed, the key US inventory indexes ended the previous month, quarter, and the primary half of the 12 months on a optimistic wave.

Expectations of an additional enhance in the price of borrowing from the Fed stay, which fuels the optimistic dynamics of the greenback. Nevertheless, this additionally doesn’t forestall the US inventory market from rising, which acquired help from the optimistic macro statistics acquired in June and final week.

Economists imagine that the US financial system is protected against the danger of a recession by a number of mechanisms (lively job creation, excessive company profitability, decrease US family financial savings charges, authorities packages to help funding and vitality transition).

Talking about the potential of 2 extra rate of interest hikes this 12 months, the pinnacle of the Fed, Powell, made a reservation that the ultimate resolution concerning the July assembly has not but been made. “We do not wish to overdo it,” Powell stated, and “will proceed to make choices from assembly to assembly based mostly on incoming knowledge, their implications for the outlook and the steadiness of danger.”

Buyers had been additionally inspired by the outcomes of the Fed’s stress take a look at on the banking system final week. They confirmed that the majority main US banks are capable of stand up to a severe recession within the financial system with present reserves of financial liquidity, and within the occasion of theoretically potential new emergency conditions and shocks, mechanisms for operational help from the Fed have already been developed.

In different phrases, to date there are extra causes for additional development of US inventory indices than for his or her decline.

From a technical viewpoint, the S&P500 index is creating an upward pattern inside the world bull market, being considerably above the help ranges of 2910.00, 2610.00, separating the worldwide bull market from the bear market. Confirmed breakdown of the June excessive at 4461.00 could also be a sign to open new lengthy positions.

Essentially the most “quick” sign for opening brief positions (inside the correction) could also be a breakdown of the short-term help stage of 4409.00. Within the medium time period, a correction is feasible as much as the help stage of 4262.00, and a constant breakdown of the help ranges of 4400.00, 4360.00, 4324.00 will affirm our assumption.

Assist ranges: 4409.00, 4360.00, 4324.00, 4262.00, 4130.00, 4108.00, 3964.00, 3816.00, 3505.00

Resistance ranges: 4461.00, 4540.00, 4630.00, 4810.00