Key US stock indices staged a tentative rebound overnight following a retracement in Treasury yields as durable goods orders fell 4.5% in January, the most since the onset of the pandemic.

Much of the fall in durable goods was due to the volatile transport orders component. After transport was stripped out, the index increased by 0.7% vs the 0% expected. Elsewhere Pending Home Sales surged by 8.1%, its biggest gain since June 2020.

If markets were hoping for cooler data after last week’s eye-popping PCE core inflation print, these weren’t the numbers they were looking for.

Apart from month-end rebalancing flows, which can impact markets, interest tonight will be focused on the Conference Board Consumer Confidence indicator for February.

After the fifth warmest January on record, we see upside risks to consensus expectations for Consumer Confidence to rise from 107.1 to 108.5.

If our hunch proves correct, this will throw more fuel on the fire that the economy is reaccelerating.

S&P 500 technical analysis

On Friday night, the S&P 500 closed below the uptrend support at 4000 from the October lows but held the support provided by the 200-day moving average at 3950. A position it remains in today.

Providing the S&P 500 holds above the 200-day moving average, we give the rally from the October low (viewed as countertrend or corrective) the benefit of the doubt towards the August 4327 high before fading.

Aware that should the S&P 500 see a sustained close below 3950, it would confirm that the rally from the October lows has been corrective, and the downtrend has resumed.

S&P 500 daily chart