The market is surging on the electronics sector reprieve, but is this a new uptrend or just a correction?
The world of finance is abuzz with excitement as the market closed 1.81% higher on Friday, showing signs of recovery after a sharp sell-off the previous day. Although it hasn’t reached the peak of Wednesday’s high yet, there is optimism in the air. This morning, futures are pointing towards a 1.3% higher open, following the news that smartphones, computers, and other electronics will be temporarily exempt from tariffs on Chinese imports.
Goldman Sachs released its earnings this morning, with the stock gaining over 1% in pre-market trading. This sets the stage for a significant week in the corporate world, with several major financial institutions gearing up to report their earnings in the coming days.
Investor sentiment remains bearish, as indicated by the AAII Investor Sentiment Survey, with 28.5% of individual investors feeling bullish and 58.9% adopting a bearish stance. The S&P 500 is experiencing significant volatility, evident from the daily chart.
## S&P 500: Strong Weekly Rebound
The S&P 500 made an impressive gain of 5.70% last week, rebounding from a local low of 4,835.04. This recovery comes on the heels of recent tariff-induced volatility, taking the market from its lowest point since January of 2024, back on Monday, April 7. The performance from last week hints at a potential bottom forming, showcasing strong buying interest at lower levels. However, the sustainability of this rebound remains uncertain.
Key support levels are now situated around 5,000-5,100, with resistance near the high of around 5,480 seen last Wednesday.
## Nasdaq 100 – Set to Open Higher
The Nasdaq 100 saw a gain of almost 2% on Friday, with tech majors like Apple poised to benefit from the exemption of electronics from steep tariffs on Chinese imports. Despite the positive outlook, it’s important to note that these exemptions are temporary and designed to give companies more time to shift their production to the United States.
Futures indicate a 1.7% higher open for the Nasdaq 100, but uncertainty looms large. Resistance levels are now around 19,000-19,200, while support remains around 18,200.
## VIX – Volatility Still Elevated
The VIX, while dropping from recent highs, remains elevated compared to historical norms, signaling ongoing uncertainty in the market. Historically, a decreasing VIX indicates less fear in the market, while a rising VIX is associated with stock market downturns. The current levels suggest potential market reversals in either direction.
## S&P 500 Futures Contract: Surging Higher
This morning, the S&P 500 futures contract is trading 1.3% higher, building on the gains from Friday and indicating upward momentum at the open. Key support levels lie around 5,350-5,400, with resistance at 5,500. The formation of a double-bottom pattern has been noted, but it’s still too early to confirm.
## Conclusion
The stock market is currently showcasing strong short-term bullish momentum fueled by hopes and news of tariff delays and exemptions. The 5.70% gain in the S&P 500 last week signifies a significant recovery from recent lows. However, the question remains whether this is the beginning of a new uptrend or just an upward correction following recent declines. Trade policy developments continue to drive market sensitivity, and volatility is expected to persist.
### Breakdown:
– S&P 500 futures are indicating a 1.3% higher open post Trump’s electronics tariff exemption.
– Goldman Sachs earnings have shown strength with the stock gaining over 1% pre-market.
– The tech sector is set to benefit from tariff exemptions for electronics.
– The market remains highly sensitive to news, with tariff developments taking the spotlight.
In conclusion, the financial landscape is evolving rapidly, and it’s crucial for investors to stay informed and adapt to the changing dynamics of the market for a successful financial future.