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On July 2, Mohit Kumar, chief economist of Jefferies International, said that the British government is facing a difficult choice. We have a negative view on the UKs fiscal outlook. Our expectations for economic growth are much lower than the forecast of the Office for Budget Responsibility (OBR). We expect the UK economic growth rate to be 1-1.2% in the next three years, while the OBR forecast is 1.7-1.9%. The lower economic growth rate will make the UK Chancellor of the Exchequers fiscal plan unrealistic. Even if the government raises tax rates, we do not think that tax increases will bring as much revenue as the government expects. Therefore, the government needs to make difficult decisions to make the fiscal deficit situation reasonable. The recent market reaction shows investors concerns about the governments ability to reduce the fiscal deficit.On July 2, Gordon Shannon, portfolio manager at TwentyFour Asset Management, pointed out that (the shift in welfare policy) shows that the Labour Party attaches much less importance to the British government bond markets views. Shannon said, "I thought politicians would remember what former British Prime Minister Truss went through. I still think that after you break your promise, in a world that is increasingly concerned about the governments solvency, your credibility will be damaged."Fitch: Trade war and policy uncertainty undermine global credit outlook to 2025.Apple Inc (AAPL.O) shares rose 1% after Jefferies upgraded the stock to “hold” from “underweight.”Shares of U.S. electric car company Rivian (RIVN.O) fell 2% as its second-quarter deliveries fell.

S&P 500 (SPY) Tests Support At 3850

Skylar Shaw

Sep 21, 2022 14:51



Ford backs down as traders worry over lowered guidance


As investors dumped equities ahead of tomorrow's publication of the Fed Interest Rate Decision, the S&P 500 fell approaching the 3850 mark.


Following the company's admission that it was experiencing a components shortage, Ford's stock fell by more than 10% during today's trading session. Ford said that it "expects to have around 40,000 to 45,000 cars in inventory at the conclusion of the third quarter missing specific items currently in limited supply." Ford reiterated its $11.5 billion to $12.5 billion adjusted EBIT target for the whole year. The market, however, is concerned that the business may soon have to reduce its outlook.


The material pressure on gold stocks has increased as gold markets have been approaching annual lows. Newmont Corporation, one of the top gold stocks, fell by more than 4% during today's trade.


Considering that WTI oil managed to go below the $84 mark, energy equities are also declining.


Chevron, Schlumberger, and Exxon Mobil are all down more than 1%.


The majority of the top tech stocks are declining. Apple and Tesla, however, are up by more than 1%.


From a broad perspective, the current downturn is significant, and pressure is seen across all market categories. Prior to the Fed Interest Rate Decision, traders minimize their risks because they are concerned that a rate increase of 75 basis points may be accompanied by hawkish remarks from Fed Chair Jerome Powell. Treasury rates reach fresh highs as bond traders worry Powell will be aggressive.

Another Examination Of The Critical Support At 3850

The S&P 500 is trying to close below the crucial support level at 3850. The S&P 500 will move in the direction of the next support at 3825 if it drops below this level. The S&P 500 will be pushed toward the support at 3800 if a move is made below the support at 3825. The next support level, which is at 3780, will be reached if the S&P 500 drops below 3800.


To the upside, the S&P 500 must hold above the 3885 resistance level in order to have a chance of gaining upward momentum soon. 3900 is where the next resistance level is situated. If this level is successfully tested, the following resistance level at 3920 may then be tested.

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