Directional Bias For The Day:
- S&P Futures are lower to unchanged; drifting mostly up since 3:00 AM
- Odds are for an up day with choppiness and elevated volatility
- Key economic data due:
- Non-Farm Employment Change (155K; 198K est.; 237K prev.) at 8:30 AM
- Unemployment Rate (3.7%; 3.7% est.; 3.7% prev. ) at 8:30 AM
- Average Hourly Earnings (0.2%; 0.3% est.; 0.1% prev.) at 8:30 AM
Markets Around The World
- Markets in the East closed mostly higher – Hong Kong and Singapore were down
- European markets are higher
- Dollar index
- Crude Oil
- 10-yrs yield is at 2.903%, up from December 6 close of 2.867%;
- 30-years is at 3.174%, up from 3.136%
- 2-years yield is at 2.762%, down from 2.766%
- The 10-Year-&-2-Year spread is at 0.141, down from 0.110
- Critical support levels for S&P 500 are 2670.99, 2644.75 and 2621.53
- Critical resistance levels for S&P 500 are 2695.22, 2711.29 and 2730.90
- Key levels for eMini futures: break above 2699.25 the high of 4:00 PM on Thursday and break below 2673.75, the low of 7:00 AM
- On Thursday, at 4:00 PM, S&P future (December contract) closed at 2696.75 and the index closed at 2695.95 – a spread of about +0.75 points; futures closed at 2691.00 for the day; the fair value is +5.75
- Pre-NYSE session open, futures price action is unchanged – at 9:00 AM, S&P 500 futures were down by -0.25; Dow up by +15; and NASDAQ down by -10.00
Directional Bias Before Open
- Weekly: Uptrend Under Pressure
- Daily: In Correction
- 120-Min: Down-Side
- 30-Min: Down-Side
- 15-Min: Side
- 6-Min: Side-Up
The trend and patterns on various time frames for S&P 500 are:
|2-Hour (e-mini future)||
|30-Minute (e-mini future)||
|15-Minute (e-mini future)||
Indices gapped down at the op and then traded lower in the morning session. They turned around by mid-day and the traded higher for rest of the day. Some closed the gap and some were not able toc lose the gap. A break above yesterday’s high will make it a turn-around day.
The S&P 500 lost 0.2%, but was able to fight back after being down as much as 2.9% earlier in the session. The Dow Jones Industrial Average lost 0.3% after being down as many as 785 points or 3.1%. The Nasdaq Composite added 0.4%, yet it had been down as many as 174 points or 2.4%.
The major indices suffered steep losses in the early going after news of the arrest of Huawei Technologies’ CFO fueled concerns about U.S.-China trade negotiations. Investor sentiment reversed course after European markets closed, however, and kicked into overdrive late in the day following a Wall Street Journal report that suggested the Federal Reserve might be more cautious-minded about raising interest rates following its December FOMC meeting.
Those concerns, and the sharp selling in the stock market off the open, fueled a flight-to-safety in the Treasury market that pushed yields noticeably lower across the curve. The 2-yr yield dropped three basis points to 2.77% after hitting 2.68% intraday. The 10-yr yield dropped five basis points to 2.87% after hitting 2.82% intraday. The backtracking in the Treasury market also coincided with the close of European markets and the rebound effort in the stock market.
WTI crude was able to finish off session lows, though, as the weekly crude inventory report from the Energy Information Administration showed a decline in crude stockpiles for the first time since September. Crude oil inventories had a draw of 7.3 million barrels. Also, Saudi Arabia is reportedly waiting to hear from Russia before advancing any formal production cut agreement. An official communique from OPEC is expected sometime on Friday.
- Initial jobless claims for the week ending December 1 decreased by 4,000 to 231,000 (Briefing.com consensus 225,000). Continuing claims for the week ending Nov. 24 decreased by 74,000 to 1.631 million.
- The key takeaway from the report is that initial claims, while down in the latest week, are starting to pick up in a move that suggests the low for this cycle has been reached.
- The ISM Non-Manufacturing Index rose to 60.7% in November (Briefing.com consensus 59.0%) from 60.3% in October. The November reading was the second-highest reading this year.
- According to the ISM, the past relationship between the Non-Manufacturing PMI and the overall economy indicates the November reading corresponds to a 4.3% increase in real GDP on an annualized basis.
- S&P 500 Sectors
|Sector||Daily Trend (Visual)||Relative Strength (Last Month – November)||Relative Strength (Current)||%K vs. %D|
|Consumer Staples||Under Pressure||XLP||XLP||Above|
|Industrials||Down||XLI (Cross – Over)||XLI||Below|
|Heath Care||Under Pressure||XLV (Cross – Over)||XLV||Above|