Equity markets drifted only slightly lower yesterday and the USD held up well despite a poor retail sales figure that had traders jumping for cover.

Retail Sales came in at -1.2%, which was so far below estimates that many are suggesting there might be an error because the Government has been shut down and survey data could well be inaccurate.

Regardless, the number itself was a shocker and still is a sign that the retail sector through the holiday period, wasn’t as good as many had hoped. This further adds to the dove’s case to slow down the rate of interest rate hikes, which Jerome Powell is currently rolling out.

We are also yet to hear any clear outcomes over the China trade talks and they are due to wind up today. So that will likely be the event to watch coming into the US session.

So far today the ES is down -0.15% and drifting lower post the US close.

Technical Outlook

The SPX is still holding above the 2700 level and has since fallen below the 2750 mark. Although I wouldn’t say the 50 level is that major at all, there is some psychological value to it.

As previously mentioned, the round number levels are the major focus at the moment and 2600 is S2 and R2 at 2800.