The S&P 500 is still pushing higher, and traders can take advantage of this for a push to the H1 2022 highs.
SPX: Weekly Chart
The SP500 trades at 4,402, with support below at 4,325 and a target above 4,637. That high from early 2022 is a bounce after the first retreat from the all-time high around 4,800.
Retail inflows are rising into broad equity ETFs such as SPY, according to data from VandaTrack. “We believe that the older and more conservative segment of individual investors has now joined the rally and prefers to purchase these products rather than betting on single stocks,” they said.
Tesla has been the biggest beneficiary over the five days from July 3 to July 7, with net retail purchases of $1.21 billion, while second-place Apple only saw $250 billion.
Earnings season starts with big banks this week, but investors are concerned about the Fed’s tightening on corporate profits, said 42% of respondents, according to MLIV Pulse. Markets are now pricing in another interest rate hike in July after Friday’s economic data showed slower payroll numbers but stronger-than-expected wage growth.
Analysts expect a second-quarter slowdown in EPS but a rebound in growth in the final three months of the year, according to data from Bloomberg.
“Negative noise from the earnings season will certainly be an element in helping slow the runaway train that is the US market,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.
Citigroup, meanwhile, has downgraded the S&P 500 with a price target of 4,000 due to the slowdown in corporate profits. Traders can ignore the noise and play the support level with two upside targets in play over the next few weeks for the 500 index.
