Consumer Confidence Data Keeps Market Afloat


Simpler Trading Team

Dec 21st 2022  .  3 min read

Consumer Confidence Data Keeps Market Afloat

Overnight, the psychological support level of 3,850 on the S&P 500 futures played a crucial role in setting the tone for the day. In order for the market to see any upward continuation, it was pivotal for this level to be supported by a strong volume of buying activity.

As the market opened for the day, traders were greeted with more indecision and rotation. It seemed that the market was waiting for key data to come out before making a move in a particular direction. 

Economic data propels market higher 

A positive report, the Consumer Confidence Index, helped to boost the market when it was released at 10 a.m. Eastern time. The data indicated that consumer confidence was at its highest level in the previous eight months, which can be a good sign for traders as it suggests that consumers may be more willing to spend money. This report is considered a leading indicator for predicting future consumer spending and can also be seen as a sign of optimism in the overall state of the economy.

With this new information, the market saw a surge higher, racing towards the psychological level of 3,900. The release of this report acted as a catalyst for the market, providing it with the momentum it needed to move higher. However, this upward momentum was short-lived as the S&P 500 futures struggled to maintain their upward trajectory.

As the trading session came to a close, the S&P 500 futures finished right around the significant psychological level of 3,900. This round number often holds particular significance for traders and will serve as a key level to watch as the week progresses. If the market can maintain its position above this level, it may aim for the 21-day exponential moving average at 3,945.

On the other hand, if the market is unable to hold above 3,900, it could potentially see a decline toward the lower target levels of 3,850 and 3,800.

Economic data tomorrow

Tomorrow at 8:30 a.m. Eastern time, the market will be closely watching the release of the initial and continuing jobless claims data. The forecast for initial jobless claims is 220,000, and traders will be looking to see if these numbers point to a growing economy. With the Federal Reserve (Fed) remaining uncommitted to ongoing rate cuts, big players are searching for early indications of what may come in February when the next rate decision is made.

The Fed closely monitors various reports and economic trends to determine if there are signs of a growing economy. If there are indications that inflation has peaked, it is likely that the Fed will consider tapering its current rate policies. Until there is more clarity on these issues, there is likely to be uncertainty in the market.

The market pushes higher mid-week.

The Nasdaq and the S&P 500 were positive to close the session. The S&P 500 futures closed up 1.63%, gaining 63 points, while the Nasdaq futures closed up 1.60%, an increase of 178 points. The Dow Jones futures followed, closing up 1.67%, adding 552 points.

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