US equities ended last week higher after a stronger than expected jobs report. The risk-on sentiment is set to continue today even though the world’s two largest economies are on track to commence a $100bn trade war after China-US trade negotiations ended on Sunday. However, geopolitical concerns regarding North Korea have subsided as US and North Korea leaders are to meet on 12 June in Singapore as planned. Over in Italy, a deal to form a government has been reached which has helped to diminish fears of an Italian exit from the Eurozone and improved sentiment for stocks in Europe.
As trading for the month of June begins, it is worth looking at seasonality. For the S&P 500 index, the month of June is historically rather dull. The average monthly return recorded since the 1960s, is 0%. The best performance for the month of June was 5% which is the lowest of any month.
S&P 500
On the daily chart, the S&P500 (SPX) tested the downside last week but recovered sharply from support at 2680. The index is now attempting to break higher and a close above 2740 would open the way for a continuation towards 2800 with resistance at 2760 and 2785. However, a reversal below 2715 would change the outlook with support 2680 and then 2663.
Nasdaq 100
On the daily chart, the Nasdaq 100 (NDX) finally broke the psychologically important 7000 level after a number of attempts. The index is now trying to clear the resistance at 7090 with the possibility of a move to new all time highs. However, a reversal and break of support at 7000 will likely lead to declines towards 6780 followed by 6780.
