- The US Justice Department may force Google to divest parts of its business due to antitrust concerns.
- S&P 500 and Nasdaq 100: Despite market uncertainty, these indexes had a strong day on Tuesday, recovering from Monday’s losses.
- Following a disappointing update from the National Reform Commission in China, US-listed Chinese stocks like Alibaba, PDD Holdings, and JD.com experienced declines.
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The major Wall Street Indexes fell in early European trade before recovering ahead of the US Open to trade flat on the day. Early losses were attributed to Alphabet’s Google as news broke on Tuesday that the US may ask a judge to force Google to divest parts of its business.
American authorities are looking at Google’s Chrome browser and android OS that the US says is used to maintain an illegal monopoly in online search. In what is a landmark case, a judge found in August that Google, which processes around 90% of US internet searches, had effectively built an illegal monopoly. The Justice department has proposed a few remedies, most of which will likely affect Google’s revenue. Google has faced similar challenges in the EU with a new antitrust regulator set to be appointed soon.
Surprisingly Alphabet shares are trading slightly higher on the day as we head into the US open.
S&P 500 Heatmap Pre-US Open
Source: TradingView (click to enlarge)
The S&P 500 and Nasdaq 100 posted a strong day on Tuesday, wiping out Monday’s losses. Trading does appear to be choppy this week as there remains a host of uncertainty plaguing market sentiment.
The Fed minutes lie in wait today, before US inflation data and the start of earnings season. The Fed minutes are unlikely to have any impact today as markets have done a 360 since last week’s jobs data release.
Comments ahead of today’s meeting by Fed policymakers may actually have a larger impact in the absence of data releases. Markets are now overwhelmingly supporting a 25 bps cut from the Fed.
For all market-moving economic releases and events, see the MarketPulse Economic Calendar.
In other news Chinese stocks listed in the US fell today as markets digested what many considered a disappointing update from the National Reform Commission in China. This saw Alibaba Group BABA.N fall 3%, PDD Holdings PDD.O lost 3.6% and JD.Com JD.O dropped 4.2%.
Technical Analysis
S&P 500
From a technical standpoint, the S&P is trading at a key resistance area where the most recent retracement began. Yesterdays bullish engulfing candle does hint at buying pressure,
The overall bullish play discussed in the weekly market outlook remains intact for now.
On the daily timeframe a break and daily candle close above 5760 may be needed for the rally to continue into tomorrow.
Immediate resistance rests at 5760 with a move above this level leading to the 5910 resistance handle. Conversely a move lower here will first need to break below support with a daily candle close below 5690 paving the way for more downside.
S&P 500 Daily Chart, October 9, 2024
Source: TradingView (click to enlarge)
Support
- 5691
- 5613
- 5538
Resistance
- 5760
- 5910
- 6000
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Zain Vawda
He has spent the last 3 years in an analyst role honing his skills across various financial domains, including technical analysis, economic data interpretation, price action strategies, and analyzing the geopolitical impacts on global markets. Currently, Zain is advancing in obtaining his Capital Markets & Security Analyst (CMSA) designation through the Corporate Finance Institute (CFI), where he has completed modules in fixed income fundamentals, portfolio management fundamentals, equity market fundamentals, introduction to capital markets, and derivative fundamentals.
He is also a regular guest on radio and television programs in South Africa, providing insight into global markets and the economy. Additionally, he has contributed to the development of a financial markets course approved by BankSeta (Banking Sector Education and Training Authority) at NQF level 6 in South Africa.
