Vanguard S&P 500 ETF continues to trade in a bull market, although the U.S. job report disappointed

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the… read more.
on Sep 3, 2021
  • The U.S. added only 235K jobs in August
  • The slowdown in U.S. jobs growth raised questions about the pace of the economic recovery
  • Vanguard 500 ETF continues to trade in a bull market

Vanguard S&P 500 ETF continues to trade near record highs, and according to technical analysis “bullish” trend remains intact. The U.S. released the Nonfarm Payrolls report today, the country added only 235K jobs in August, and this will probably influence the U.S. Federal Reserve’s stance of maintaining an ultra-loose monetary policy for the upcoming period.

Fundamental analysis: The job report missed economists’ estimate of 750K in August

Vanguard tracks the S&P 500 and gives you exposure to 500 of the most significant public companies in the United States. The U.S. released the Nonfarm Payrolls report today, which showed that the country added only 235K jobs in August.

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The job report missed economists’ estimate of 750K in August and damped concerns that the Federale Reserve will have to tighten its ultra-loose monetary policy sooner than anticipated. The positive news is that the unemployment rate fell to 5.2%, while the average hourly earnings increased by 0.6% month-over-month and 4.3% year-over-year.

“The numbers a big disappointment, and it’s clear the Delta variant had a negative impact on the labor economy this summer. The labor market remains the key touchstone for the Fed, with Chair Jerome Powell hinting last week that reaching full employment was a pre-requisite for the central bank to start paring back its asset purchases,” said Michael Arone chief investment strategist at State Street Global Advisors in Boston.

The slowdown in U.S. jobs growth raised questions about the pace of the economic recovery while the Delta variant of the coronavirus continues to pose downside risks together with further new variants, especially ones that might not be stopped by existing vaccines.

Vanguard S&P 500 ETF fell from the record highs, but it continues to trade in a bull market on support from robust corporate earnings. Strong corporate earnings for the second quarter boosted optimism around the U.S. stock market, and the U.S. stock indexes continue to trade near record highs even though the University of Michigan reported recently that the preliminary consumer sentiment index fell to its lowest level in a decade.

Technical analysis: Vanguard 500 ETF continues to trade in a bull market

Data source: tradingview.com

The important support levels are $400 and $380, $420, and $450, represent the current resistance levels. The trendline on the chart above also represents a firm support level, if the price breaks this trendline, it would be a firm “sell” signal, and we have a free way to $400. As long the price is above this trend line, this ETF continues to trade in a bull market.

Summary

Vanguard S&P 500 ETF continues to trade in a bull market even though the job report missed economists’ estimate of 750K in August. Vanguard S&P 500 ETF remains supported by the fact that the Federal Reserve left the interest rate and bond-buying program unchanged, while the strong corporate earnings continue to keep optimism around investors.

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