S&P 500 Price Forecast – Stock Markets Enter Earnings Season
I am going to ask you to suspend your disbelief for a moment and pretend that earnings matter. They do not, and this is something that has been a feature of the market for the last 12 years or so. However, earnings can have an influence short term. At the end of the day though, it comes down to whether or not the Federal Reserve is pumping cheap money into the system. Long gone are the days of figuring out your earnings estimate and applying a multiple to it, now you simply look for whether or not the Federal Reserve is adding to its balance sheet.
S&P 500 Video 15.07.20
The earnings will unsettle the marketplace, but the Fed will pick up the pieces, after all the work for Wall Street. I am not being cynical; I am just stating what the rest of us have noticed for the last decade or so. With that in mind, stock markets only go up in the end although we do have the occasional nasty correction. We are not likely to see a nasty correction and quite frankly as long as you are not highly levered to the market, you should be able to write out any significant pullback.
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To the downside I see the 50 day EMA at 3046 offering significant support. Having said that, 3100 is also supportive and we have already seen that during the day on Tuesday. 3200 above is rather resistive so I believe at this point we are simply chopping around trying to sleepwalk through earnings season.
For a look at all of today’s economic events, check out our economic calendar.