Economic Announcements:

• 2:15 PM: ADP Non-Farm Employment Change
• 2:30 PM : Retail Sales
• 3:45 PM: Manufacturing PMI
• 4:00 PM: ISM PMI
• 4:00 PM : Business Inventories
• 4:30 PM : Crude Oil Inventories

(Read more)

Corporate Earnings:

• Conagra Brands (CAG)
• Lamb Weston Holdings (LW)

(Read more)

S&P 500 Analysis:

VPOC: 6569.25
VVA: 6473.25-6583.25
High-Low: 6353.25-6583.25
PP: 6500
Open: 6562
Vix: 25.14

Yesterday, the S&P 500 experienced its largest rebound since May, driven by a mix of optimism regarding a possible resolution to the conflict in Iran and quarter-end repositioning flows.

This morning, sellers attempted to break through the 6360-6370 support zone, also testing the previous day’s low. Buyers defended this support and took control, pushing the price up to the 6440-6460 resistance zone where it consolidated throughout the morning. At the US open, buyers maintained control for the remainder of the day, propelling the price toward the 6550-6560 resistance zone, followed by the 6580-6585 zone. The S&P 500 closed between these two zones.

During its ascent, the S&P 500 created a single print between 6500 and 6530. This morning, the US index opened within the value area at 6562 and is consolidating on the 6580-6585 resistance zone and the previous day’s VVAH, which it has already attempted to break. While the price has recovered significantly, it remains below its 200-day moving average and within its bearish channel on the 1-hour chart. The exit from this channel corresponds to the 6600 resistance zone; this level could represent a solid long entry in the event of a price increase and following trend confirmation.

Regarding options, there is a significant area of interest at 6500, and the next call zone remains at 6800. We also observe a zone of puts and calls at 6600, which should strengthen this level in the event of an upward move.

Today, market movement could accelerate with several macro data releases. We expect the ADP employment figures at 2:15 PM, Retail Sales at 2:30 PM, the PMI index at 3:45 PM, the ISM PMI and Business Inventories at 4:00 PM, followed by Crude Oil Inventories at 4:30 PM. This data will likely fuel speculation regarding future Fed rate cuts.

Scenario 1 🟡: Upon rejection at the 6600-6610 resistance zone, the price could consolidate between this area and the 6550-6560 support zone, particularly ahead of this afternoon’s data releases.

Scenario 2 🟢: Upon a breakout above 6600-6610 and an exit from its bearish channel, the price could continue its ascent toward the 6650-6655 resistance zone and then 6700.

Scenario 3 🔴: Upon a break below the 6550-6560 support zone, the price could target the 6500-6520 support zone, thereby filling yesterday’s single print. The price could then seek the 6440-6460 support zone following yesterday’s VVAL at 6473.

Key Levels:

• 6685-6700 (Resistance Zone)
• 6650-6655 (Resistance Zone)
• 6600-6610 (Resistance Zone)
• 6580-6585 (Resistance Zone + Previous Day High 6583)
• 6550-6560 (Support zone)
• 6500-6520 (Support Zone)
• 6473 (VVAL-1)
• 6440-6460 (Support Zone)
• 6360-6370 (Support Zone)

Market situation

• Spectacular Rally: On March 31, the S&P 500 saw its largest daily gain since May, surging 2.9%. The Nasdaq followed with a 3.75% advance.
• Technical or Fundamental Rebound: This movement is attributed to a combination of optimism over a potential resolution to the Iran conflict and quarter-end repositioning flows.
• Technical Levels: The S&P 500 rebounded after hitting a low of 6,363 points last Friday. Goldman Sachs notes that CTA positioning had turned short, which favored this technical rebound.

Upcoming Events

• Macro Calendar: Wednesday will be marked by ADP figures, Retail Sales, and the US Manufacturing ISM. Friday’s NFP report will be the ultimate decider for the week.
• Trump Deadline: The “ceasefire” declared by Donald Trump expires on April 6. The market is hoping for an agreement before this deadline.

Market Volatility

• VIX Easing: The fear index retreated from 30 toward 25, although it remains at a high level by historical standards.
• Bonds: 10-year Treasury yields eased, falling to 4.29% on March 31.

Impact of the Iran War

• Peace Initiative: China and Pakistan presented a five-point peace plan including the reopening of the Strait of Hormuz.
• Trump’s Position: Donald Trump suggested that oil-importing countries should secure the Hormuz passage themselves, signaling a possible withdrawal of US forces while stating that negotiations are “going well.”
• Threats of Retaliation: The Revolutionary Guard named 18 American tech companies (including Meta, Google, Microsoft, Nvidia) as potential targets for retaliation.

Currency Reaction

• The Dollar Stalls: The greenback suffered a slight retreat amid optimism linked to negotiations. The Euro led gains on March 31, while the Swiss Franc lagged behind.
• Energy Pressure: Goldman Sachs warns that the foreign exchange market has not yet fully priced in the lasting impact of the energy shock on trade balances.

Industry Slows and Employment Cools / Consumer Resilient

Chicago PMI (Mar):

• Actual: 52.8
• Forecast: 54.8
• Previous: 57.7

Consumer Confidence – Conference Board (Mar):

• Actual: 91.8
• Forecast: 87.8
• Previous: 91.0

JOLTS Report – Job Openings (Feb):

• Actual: 6.882M
• Forecast: 6.890M
• Previous: 7.240M

Summary

The picture is mixed but leans toward a controlled economic slowdown. On one hand, manufacturing activity in the Chicago region is slowing significantly, even if it narrowly remains in expansion territory. Furthermore, job openings have dropped below the 7 million mark, showing that companies are clearly scaling back on hiring. On the other hand, consumer confidence rebounded strongly, proving that households are not yet feeling panic in the face of this cooling.

• Relatively favorable for indices
• Supports the case for a Fed rate cut