August 20, 2020
The S&P 500 faded from intraday highs following the release of July FOMC meeting minutes, but there was nothing in the report to change near-term monetary policy expectations. The statement that weighed on markets was probably: “the ongoing public health crisis would weigh heavily on economic activity, employment, and inflation in the near term and was posing considerable risks to the economic outlook over the medium term.” While that sounds like a reasonable statement given present circumstances, the timing of the release came as the SPX was testing strong technical resistance at the all-time record high. This fits with our expectation that the SPX would lose momentum on the first approach and potentially pull back to technical support in the ~3180-3200 range. An immediate pullback or push-through will probably require an additional catalyst, and tomorrow’s release of August flash PMIs carries the necessary weight.
Looking ahead: A number of important Tech results due over the next few weeks including: PANW (Monday pm); ADSK, CRM, HPE and INTU (Tuesday pm); BOX, NTAP, SMTC and SPLK (Wednesday pm); DELL, HPQ, MRVL, OKTA, VMW and WDAY (Thursday pm); ZM (Monday 8/31); CRWD (Wednesday 9/2) AVGO (Thursday 9/3); COUP and WORK (Tuesday 9/8) and; ZS (Thursday 9/10).