S&P 500 Technical Analysis - S&P 500 Trading: 2020-04-09

US economic data in the last couple of weeks were mixed. US businesses cut more than expected 701,000 jobs in March. However services sector expansion continued though at much slower rate: the ISM non-manufacturing PMI declined to 52.5 from 57.3 in January when a drop to 44 was forecast. Readings above 50.0 indicate sector expansion, below indicate contraction. Of more recent data the Mortgage Business Association reported mortgage applications dropped 17.9% in the week ended April 3 following a 15.3% rise in the previous week. And Fed minutes for the March 15 policy meeting showed policy makers saw no major economic recovery until next year as a worst-case scenario of the coronavirus outbreak. However, the US administration launched massive monetary and fiscal aid programs to combat coronavirus impact. On March 25, 2020 a $2 trillion Phase Three stimulus bill was passed, providing $301 billion in direct cash payments, totaling $1,200 for those earning up to $75,000 and $500 per child; $500 billion government loan program to companies impacted by the outbreak; $367 billion in federally guaranteed small business loans; $250 billion to expand unemployment insurance; $221 billion in business tax cuts; $390 billion to state governments and public programs such as agriculture, drugs and transportation. These measures together with monetary stimulus program by the Federal Reserve buoyed investors’ confidence, leading to recovery in equity market.