Two days up, two days down. That is the story for equities this week as the early gains are hanging on by a thread now ahead of the weekend. S&P 500 futures are down 10 points, or 0.3%, as the downside pressure persists amid higher bond yields in trading this week. Looking at the S&P 500 index, the 200-week moving average remains in focus alongside the 50.0 Fib retracement level ahead of key central bank meetings in the next two weeks:
The series of lower highs, lower lows also continue to define the trend in equities at the moment. In other words, any relief/optimistic turn in the past few months have been met with selling pressures as the fundamental outlook continues to be rather bearish.
Recession risks are still on the cards while the Fed continues to drive the global tightening cycle and unless the narrative for the latter changes, we are unlikely to see equities find much reason to pivot in a meaningful way. And with Treasury yields looking to price in a tighter Fed at the moment, we're still not close to a change in the rhetoric yet.
