{"id":68770,"date":"2023-10-04T17:00:57","date_gmt":"2023-10-04T21:00:57","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/as-storm-clouds-gather-over-bond-market-watch-this-level-on-the-sp-500\/"},"modified":"2023-10-04T17:01:00","modified_gmt":"2023-10-04T21:01:00","slug":"as-storm-clouds-gather-over-bond-market-watch-this-level-on-the-sp-500","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=68770","title":{"rendered":"As storm clouds gather over bond market, watch this level on the S&P 500"},"content":{"rendered":"

While you were sleeping, the yield on the 30-year Treasury yield briefly broke the 5% level earlier on Wednesday. Bond chaos, to be sure, is not through with this market yet. <\/p>\n

As the stock market goes along for a choppy ride, chartists are keeping close watch on an important level for the S&P 500, the subject of our call of the day<\/strong>.<\/p>\n

\n

\u201cThe 4,200 mark is crucial,\u201d says Michael Kramer, Mott Capital Management founder. \u201cNot only is it where the 200-day moving average [DMA] resides, but dropping below 4,200 also means the S&P 500 no longer boasts a 20% gain from the October 2022 lows.\u201d The S&P 500
\n SPX
\n closed at 4,229.45 on Tuesday, a 1.37% drop.<\/p>\n

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\u201cIt\u2019s worth considering how many investors might grow anxious if the 200-day moving average is breached and the index is no longer in a bull market,\u201d Kramer told clients in a note.<\/p>\n

Also read: <\/strong>Stock-market rout puts all eyes on 4,200 level for S&P 500<\/p>\n

The 200-DMA is considered a key indicator used by many chartists to determine long-term trends. After Tuesday\u2019s selloff, the S&P 500 is still 21% above its October intraday low. \u00a0The market would have to fall 20% from its July 31 high to exit its bull market.<\/p>\n

\u201c4200 is a big technical level and a very big psychological level, and if that breaks, I would think things get worse. Obviously, if you get weak job data on Friday and rates collapse, stocks will snap back. So suddenly, Friday\u2019s job report just became a whole lot more important,\u201d said Kramer.<\/p>\n

A stock market commentator who goes by Heisenberg (@Mr_Derivatives) has been discussing in recent weeks a pivotal moment facing the S&P 500. He\u2019s optimistic., expecting <\/a>a visit to 4,200 sooner than later, perhaps an \u201covershoot\u201d to 4,185 to 4,190, and a \u201cdecently strong rally\u201d from there out. <\/p>\n

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Read: <\/strong>The S&P 500 is brushing up against \u2018the mother of all trend lines.\u2019<\/p>\n

Meanwhile, Keith Lerner, co-chief investment officer and chief market strategist at Truist Advisory Services, smells opportunity with the stock market now at its most oversold since autumn 2022 as that 4,200 support level nears. He also thinks a temporary dip below that number is likely, given so many are watching it.<\/p>\n

The good news? \u201cThe percentage of stocks within the S&P 500 trading above their 50-day moving average is now below the 20% threshold considered oversold and sits at 15% currently,\u201d he tells clients.<\/p>\n

\u201cThis suggests indiscriminate selling and is a level from which markets tend to bounce, at least in stronger markets,\u201d though that will depend on yields cooling off and coming earnings season, he says. But investors below benchmark equity targets could realize an opportunity to \u201clean into equities and bring weightings closer toward neutral,\u201d Lerner adds.<\/p>\n

The markets<\/h2>\n
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Stocks
\n SPX<\/p>\n

DJIA<\/p>\n

COMP
\n are modestly higher after weak private-sector employment data, with bond yields pulling back \u2014 the 30-year
\n BX:TMUBMUSD30Y
\n is down 7 basis points at 4.882% and the 10-year
\n BX:TMUBMUSD10Y
\n is down the same at 4.725%. The dollar
\n DXY
\n is dropping. Asia was a sea of red ink, with the biggest losses of over 2% for the Nikkei 225 index
\n JP:NIK
\n and Korea\u2019s KOSPI
\n KR:180721.<\/span>\n <\/p>\n

Oil prices
\n CL.1,
\n -5.46%<\/bg-quote>
\n are down over 2% ahead of supply data. Saudi Arabia said will stick to a production cut of 1 million barrels of oil a day through the end of 2023. <\/p>\n

For more market updates plus actionable trade ideas for stocks, options and crypto, subscribe to MarketDiem by<\/strong>\u00a0Investor\u2019s Business Daily.<\/p>\n

The buzz<\/h2>\n

A lower-than-expected 89,000 private-sector jobs were created in September, data that comes ahead of Friday\u2019s nonfarm payrolls numbers. Factory orders and the Institute for Supply Management\u2019s services index are due at 10 a.m. Fed. Gov. Michelle Bowman will speak at 10:25 a.m., with Chicago Fed President Austan Goolsbee at 10:30 a.m.<\/p>\n

Apple stock
\n AAPL,
\n +0.73%<\/bg-quote>
\n is down just under 1% after a downgrade to sector weight from overweight by analysts at KeyBanc Capital, who are worried about valuation and U.S. sales for starters. <\/p>\n

General Motors
\n GM,
\n -1.08%<\/bg-quote>
\n has agreed to a $6 billion, 364-day revolving credit agreement with 21 banks led by JPMorgan Chase & Co.\u00a0 as autowork strikes reach the three-week mark.<\/p>\n

Cal-Maine Foods
\n CALM,
\n -7.28%<\/bg-quote>
\n shares are down 11% after disappointing results from the egg producer who said the average price for a dozen eggs fell to $1.59 from $2.28 a year ago. <\/p>\n

Brooge Energy
\n BROG,
\n +6.92%<\/bg-quote>
\n is up 8% after the energy infrastructure provider got a buyout offer from Dubai-based maritime and shipping group Gulf Navigation.<\/p>\n

A tourist bus in Venice fell from an elevated road, killing 21 people and leaving many injured in a fiery crash.<\/p>\n

Best of the web<\/h2>\n

These 20 stocks in the S&P 500 are expected to soar after rising interest rates have pushed down valuations<\/p>\n

Investors will soon be able to own a slice of \u201cShrek\u201d music royalties in the same place that they buy stocks. <\/p>\n

It\u2019s time to \u2018buy a T bill and chill,\u2019 says DoubleLine\u2019s Gundlach.<\/p>\n

The chart<\/h2>\n

No surprise that fear is driving the stock market, and a lot more of it, according to the latest from CNN\u2019s \u201cFear and Greed\u201d index. <\/p>\n

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The gauge that uses several inputs, including Wall Street\u2019s Cboe Volatility Index
\n VIX,<\/span>
\n or fear gauge, reached an \u201cextreme fear\u201d reading on Sept. 27 for the first time since March 15. It is now at 17, deep in that extreme territory from a reading of 23 a week ago. <\/p>\n

The tickers<\/h2>\n

These were the top-searched tickers on MarketWatch as of 6 a.m. <\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
\n Ticker<\/p>\n<\/td>\n\n Security name<\/p>\n<\/td>\n<\/tr>\n
\n TSLA,
\n +5.93%<\/bg-quote>\n <\/td>\n		\n Tesla<\/p>\n<\/td>\n<\/tr>\n
\n AMC,
\n +6.24%<\/bg-quote>\n <\/td>\n		\n AMC Entertainment<\/p>\n<\/td>\n<\/tr>\n
\n GME,
\n +1.85%<\/bg-quote>\n <\/td>\n		\n GameStop<\/p>\n<\/td>\n<\/tr>\n
\n NVDA,
\n +1.20%<\/bg-quote>\n <\/td>\n		\n Nvidia<\/p>\n<\/td>\n<\/tr>\n
\n AAPL,
\n +0.73%<\/bg-quote>\n <\/td>\n		\n Apple<\/p>\n<\/td>\n<\/tr>\n
\n NIO,
\n +2.56%<\/bg-quote>\n <\/td>\n		\n NIO<\/p>\n<\/td>\n<\/tr>\n
\n AMZN,
\n +1.83%<\/bg-quote>\n <\/td>\n		\n Amazon.com<\/p>\n<\/td>\n<\/tr>\n
\n PLTR,
\n +5.57%<\/bg-quote>\n <\/td>\n		\n Palantir Technologies<\/p>\n<\/td>\n<\/tr>\n
\n TTOO,
\n -7.11%<\/bg-quote>\n <\/td>\n		\n T2 Biosystems<\/p>\n<\/td>\n<\/tr>\n
\n NKLA,
\n -2.74%<\/bg-quote>\n <\/td>\n		\n Nikola<\/p>\n<\/td>\n<\/tr>\n<\/table>\n

Random reads<\/h2>\n

Climate scientist may be fired for refusing to fly back to Germany from the Solomon Islands.<\/p>\n

Materials on an asteroid are like those that may have \u201ctriggered the origin of life\u201d on Earth.<\/p>\n

Kevin McCarthy\u2019s removal as House speaker was all about the gavel slam.<\/p>\n

Need to Know starts early and is updated until the opening bell, but\u00a0sign up here\u00a0to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.<\/strong><\/p>\n

Listen to the\u00a0Best New Ideas in Money podcast\u00a0with MarketWatch financial columnist James Rogers and economist Stephanie Kelton.<\/strong><\/p>\n<\/p><\/div>\n