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Wall Street runs out of gas in the face of resistance despite the strength of the Nasdaq



Bearish close and lows of the day on wall street after strong gains on Monday. The New York Stock Exchange has taken a breather after reaching relevant resistance levels (the S&P 500 trades at 2,940 points) and while the Nasdaq remains close to its all-time high in February (9,838 points), as it is trading above 9,250 points

The president of the Fed, Jerome Powell, has appeared together with the US Treasury Secretary, Steven Mnuchin, to continue offering details on measures for the recovery of the world's largest economy. its speech It has been similar to the statements he has made in recent days.

"The scope and speed of this recession are unprecedented in modern times and are significantly worse than any recession since World War II", has indicated before the Banking Committee of the Senate.

"We are committed to use our full range of tools to support the economy at this difficult time, even when we recognize that these actions are only part of a broader public sector response, "added the world's most powerful central banker.

In this sense, analysts from Pimco, the world's largest bond manager, anticipates that Congress will pass a new stimulus plan ranging from $ 1 trillion to $ 1.5 trillion. Over the past eight weeks, Congress has approved stimuli valued at $ 2.9 trillion, more than double the recovery efforts approved after the 2008 financial crisis.

The stimulus includes approximately $ 720 billion in funds for small businesses, $ 500 billion for individuals, nearly $ 300 billion in unemployment insurance, more than $ 250 billion for health care, and $ 150 billion for states and municipalities. Taken together, the answer is almost equivalent to 14% of US GDP.. This is another reason for Wall Street's strong rebound from the March lows.

In the business results chapter, Home Depot, the country's largest DIY company, has fallen after selling less than expected due to confinement. And the supermarket giant Walmart It has declined thanks to increasing its online sales during the first quarter.

For his part, the President of the United States, Donald trump, is news again. The most powerful man in the world has threatened Repsol with "devastating sanctions" if it does not stop operating in Venezuela. In addition, it has dropped that it can freeze the contributions that its country makes to the World Health Organization (WHO) for his defense of China in the Covid-19 crisis.

In other markets, the West Texas oil It falls 0.2% to $ 31.75 after Monday's rally in hopes of a revival in demand. Besides, the ounce of gold rises 0.5% to $ 1,744, while the euro 0.2% appreciates and changes to $ 1.0935. The European currency remains strong after France and Germany announce a € 500 billion fund in subsidies for the countries hardest hit by the coronavirus. Finally, the profitability of 10-year American bond it falls slightly to 0.71%.

On a technical level, the S&P 500 has significant resistance in the "weekly bearish gap of 2,972 points", an area that is acting as resistance since the April highs. The main world indicator is trading at 2,955 points. Clearly exceeding 3,000 points would open the way to seek again its historical maximum for February, in 3,393.50 points.

Art cashin, UBS chief operating officer on the floor, has advised to "closely follow" the battle between bulls and bears between 2,950 and 3,000 points. If they can't finally push the S&P above that resistance, the market may star in a bearish tranche.

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