Coming week can bring turbulence. Explained
Coming week can bring turbulence to markets. Special attention has to be paid to the SP500. The technical analysis is still neutral. We got rejection last week, but it happened with a low volume. It can’t be considered a valid swing failure. If 3170 – 3140 holds, we can see a retest of 3400 and possible double top formation. However, fewer stocks support this rally. We have seen the same scenario before each sharp decline. So, keep that in mind if you long the stock market.
The Federal Reserve meeting is scheduled for the coming week. But likely we will not hear something new. Implementing negative rates looks doubtful. So, the dovish tone is all I expect from the Fed.
Extra jobless benefits disappear at the end of the month. Currently, 20 million Americans get an extra $600 a week. If there will be no fast extension of this payment, the income of the average unemployed person can fall to $200 a week. That will make people spend less. Less spending means less income for the retail business. Some of them will have to close. We have already discussed a big number of bankruptcies and their impact on the economy and the stock market. The situation looks dramatic.
The second-quarter U.S. GDP is another important data all traders are waiting for. Atlanta Fed forecasts almost 53% decline. Those numbers can shock the market and cause high volatility. Such expectation is a result of rapid COVID spread in the USA. The situation in the EU is more positive with a 12% GDP decline expected.
The Federal Reserve meeting is scheduled for the coming week. But likely we will not hear something new. Implementing negative rates looks doubtful. So, the dovish tone is all I expect from the Fed.
Extra jobless benefits disappear at the end of the month. Currently, 20 million Americans get an extra $600 a week. If there will be no fast extension of this payment, the income of the average unemployed person can fall to $200 a week. That will make people spend less. Less spending means less income for the retail business. Some of them will have to close. We have already discussed a big number of bankruptcies and their impact on the economy and the stock market. The situation looks dramatic.
The second-quarter U.S. GDP is another important data all traders are waiting for. Atlanta Fed forecasts almost 53% decline. Those numbers can shock the market and cause high volatility. Such expectation is a result of rapid COVID spread in the USA. The situation in the EU is more positive with a 12% GDP decline expected.