US Market Technicals Ahead (29 Mar – 2 Apr 2021)

29 มี.ค. 2021Focus on the upcoming week will be on US employment report that due to release on Good Day (a market holiday), with forecast slated on signs of a further gradual job recovery. Market will also be watching on President Joe Biden’s infrastructure plan, which he is expected to unveil in Pittsburgh on Wednesday, along with OPEC+ meeting which could offer guidance into the coalition’s production plan from May.

Continued push and pull of the market rotation that favors cyclicals over growth and tech stocks is expected to continue into the next quarter.

Here’s what you need to know to start your week.



S&P500 (US Market)

The benchmark index (SPX) maintained its resilience by closing +1.67% (+65.3 points) for the week. It is important to note that SPX averted from further losses on Thursday, after a technical rebound at 3,860 level which was highlighted last week.

With SPX remaining above its 20DMA & 50DMA and at a higher low trend formation, there are substantial traction for the index to breach 4,000 all time high level this week. The immediate support to watch for SPX remains at 3,860 level, a break on the pivoted level from recent Thursday. Resistance to watch for SPX is at 3,989 level, a continuation to break its all time high level.



US Employment Report (March)

The March jobs report is scheduled for a morning when the stock market is closed for the Good Friday holiday, but bonds will trade half a day, ending at noon. The labor market is expected to show signs of recovery following the approval of President Biden’s relief package and as several states ease coronavirus-induced restrictions amid the rapid pace of vaccination.



Infrastructure Plan

President Joe Biden is expected to unveil details of his $3 trillion to $4 trillion infrastructure plan on Wednesday in Pittsburgh, but strategists say it is too soon to say what form the plan could take or how large it will be in its final form.

The plan is expected to span multiple years, and Democrats are expected to seek tax hikes to pay for it.



Rotation

The rotation into cyclicals and value stocks is expected to continue into the next quarter. For the first quarter so far, energy and financials were the best performers, up about 33% and 16.5% respectively. Tech was up 1.7%, but it remains a better performer than utilities and consumer staples.