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On August 9th, Cypriot Energy Minister Michael Damianos stated in an interview with US media that Cyprus is expected to begin supplying natural gas from the Eastern Mediterranean to Europe as early as March 2028. Damianos told the Associated Press that the Ukraine crisis and the Middle East conflict have destabilized global energy markets, prompting European countries to diversify their energy sources, and offshore gas fields in the Eastern Mediterranean are increasingly becoming an alternative supply route.On August 9th, a Reuters poll of economists predicted that the U.S. overall CPI annual rate would fall to 3.4% in July from 3.5% in June, while the core CPI annual rate would fall to 2.5% from 2.6% in the previous month. Economists at Citigroup believe that, as expected, if inflation readings soften for the second consecutive month, it would mean that more than one months data points to easing inflationary pressures, essentially ruling out a September rate hike. However, economists also expect core services inflation to rise slightly in July, with prices increasing by 0.3% month-on-month. This figure was flat in May and June. Bank of America analysts stated that the rebound in core services indicators may keep a September rate hike on the table. Analyst Kate Duguid said that if the latter view prevails, and inflation data is lower than expected, then the Feds rate hike may be postponed until December or later.According to Sky News: Yemeni sources say the Houthi rebels fourth wave of missile and drone attacks targeted government positions in the port of Mocha and its outskirts.According to the Syrian state news agency, the Syrian Foreign Ministry stated that Syria and Russia will begin restructuring Russias presence along the Syrian coast within the framework of a memorandum.Hamas senior official Bassem Naim: It is expected that mediators and the United States will pressure Israeli Prime Minister Netanyahu and his government to adhere to the roadmap.

S&P 500 (SPY) Rebounds From Session Lows As Energy Stocks Rally

Alice Wang

Aug 30, 2022 15:20

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Stocks Continue to Face Some Pressure

As traders continued to pay attention to Powell's hawkish remarks, the S&P 500 fell below the 4050 mark.


It is not unexpected that tech companies had a poor day given that the yield on 10-year Treasuries has risen back over the 3.10% mark. Apple, Microsoft, Tesla, NVIDIA, Meta, and other well-known IT companies are still under a lot of pressure.


3M Company was the biggest laggard in Dow Jones. The stock is still significantly under pressure because investors are concerned that litigation involving combat earplugs might cost the business up to $100 billion. A court decided on Friday that the bankruptcy of the subsidiary of 3M Business could not bar legal actions against the parent company.


The dominant market sector at the moment is energy equities. Leading energy equities like Exxon Mobil and Chevron received further support as WTI oil rose amid violent demonstrations in Iraq. At the close of today's trading session, the S&P 500 may go higher due to the uptick in the oil sector.

Will There Be Another Sell-Off?

Traders worry that the economy will face severe pressure as a result of the Fed's aggressive rate rises. Since many of the shares in this market category are trading at high valuation levels, tech stocks continue to be sensitive to changes in Treasury yield dynamics. For instance, NVIDIA, which has lost nearly 45% of its value so far this year, is still selling at a projected P/E of 35.


It would be stupid to anticipate that the S&P 500 would continue to decline day after day, despite the fact that increasing Treasury rates and future Fed rate rises are significant negative drivers. There are no indications of significant liquidity issues worldwide, and there should be enough buyers anticipating pullbacks to start positions in American equities. The market may get extra support from the surge in energy equities.


The S&P 500 is attempting to climb back over the resistance of 4040 after failing to go below the 4000 mark. If this effort is successful, the S&P 500 will advance in the direction of the 50 EMA, which is close to the 4080 level. The test of the resistance at 4115 will be possible if a move is made above the resistance at the 50 EMA.


To have a chance of gaining further downward momentum, the S&P 500 has to settle again below 4040 on the support side. S&P 500 is placed at its next support level at 4000. The S&P 500 will move in the direction of the support at 3975 if it is able to settle below this point. If the S&P 500 moves below 3975, it will be forced into the 3945 support level.

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