After surpassing expectations, Schlumberger’s stock rose by 9%, sending it to a new yearly high.
KEY PHRASES
- The stock market received substantial help from the sharp decline in the value of the US dollar.
- A further positive factor for the S&P 500 was the subsequent retreat in Treasury rates from recent highs.
- Once the S&P 500 breaks over 3730, the next major barrier is at 3760.
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As investors become more willing to take risks, the S&P 500 is currently attempting to find support above 3730.
The Bank of Japan (BoJ) intervened to put a damper on the rise in the USD/JPY exchange rate, and as a result, the U.S. dollar has been gaining a significant amount of momentum in the other direction as of late.
A decline in the value of the dollar is favorable for the stock market because it increases the profits of multinational firms and reduces the barriers to entry for foreign investors seeking to participate in the stock market in the United States.
After reporting earnings and revenue that blew beyond analysts’ expectations, Schlumberger, the industry leader in oil services, saw its stock price rise by 9%.
Similar enthusiasm has been shown today for Baker Hughes and Halliburton, two of Schlumberger’s competitors.
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Pfizer’s announcement that it will boost the price of its coronavirus vaccine to $110 – $130 per injection has provided considerable upward impetus for Pfizer and Moderna, two vaccine manufacturers.
Verizon and Twitter are today’s biggest losers. Even though Verizon’s profits and revenue were better than expected, the stock is down 5%. Investors reacted negatively to the stock’s failure to meet subscriber forecasts by driving it to multi-year lows.
The possibility of a U.S. security scrutiny of Musk’s purchase of Twitter caused the stock price to rise toward $50.
Looking at the market as a whole, today’s upswing appears to be widespread. After briefly touching record highs, Treasury rates have begun to decline, lending further support to the S&P 500.
At least some market participants appear willing to wager that the Federal Reserve will be less hawkish than is currently anticipated.
Resistance For The S&P 500 At 3730
Recent gains have enabled the S&P 500 to move over the 20 exponential moving average (EMA), and the index is currently looking for support above the 3730 mark. The relative strength index (RSI) is currently located in the center of its range, which indicates that there is potential for the stock to advance further in the event that favourable catalysts become active.
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Once the S&P 500 index closes above 3730, it will want to test the next resistance level at 3760. If the S&P 500 index manages to break this level of resistance, it will accelerate its climb to the 3805 level, the level of the October highs.
The 50 Exponential Moving Average (EMA) is close by, suggesting that the 3800 level on the S&P 500 will meet stiff opposition.
S&P 500 support is projected to begin near the prior resistance level of 3700. In the event of a further drop, the S&P 500 will look to the 3675 level as support. S&P 500 support sits at 3640, thus a drop below 3675 will send the index tumbling.
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