Directional Bias For The Day:
- S&P Futures are higher; down bias since 3:00 AM; sharp down move since 8:30 AM following Retail Sales data
- Odds are for a down day – watch for break above 2761.00 for change of fortune
- Key economic data due:
- Retail Sales (-1.2% vs. 0.1% est. and 0.1% prev.) at 8:30 AM
- Core Retail Sales (-1.8% vs. 0.0% est. and 0.2% prev.) at 8:30 AM
- PPI (-0.1% vs. 0.1% est. and -0.2% prev.) at 8:30 AM
- Core PPI (0.3% vs. 0.2% est. and -0.1% prev.) at 8:30 AM
- Unemployment Claims (239K vs. 225K est. and 235K prev.) at 8:30 AM
Sentiment & Catalyst
- Changing sentiment due to sharply missed Retail Sales Data
Markets Around The World
- Markets in the East closed mostly lower – Seoul and Singapore were up
- European markets are mostly higher – Italy is down
- Dollar index
- Crude Oil
- 10-yrs yield is at 2.690%, down from February 13 close of 2.708%;
- 30-years is at 3.020%, down from 3.034%
- 2-years yield is at 2.537%, down from 2.508%
- The 10-Year-&-2-Year spread is at 0.153, down from 0.171
- Critical support levels for S&P 500 are 2751.54, 2748.63 and 2742.03
- Critical resistance levels for S&P 500 are 2759.83, 2785.93 and 2792.63
- Key levels for eMini futures: break above 2760.50, the high of 8:00 AM and break below 2745.50, the low of 7:30 PM on Wednesday
- On Wednesday, at 4:00 PM, S&P future (January contract) closed at 2752.00 and the index closed at 2753.03 – a spread of about -1.00 points; futures closed at 2749.50 for the day; the fair value is +2.50
- Pre-NYSE session open, futures price action is to the upside – at 8:15 AM, S&P 500 futures were up by +10.50; Dow by +115; and NASDAQ by +35.25
Directional Bias Before Open
- Weekly: Downtrend reversing
- Daily: Up
- 120-Min: Up
- 30-Min: Up-Side
- 15-Min: Up-Side
- 6-Min: Up
The trend and patterns on various time frames for S&P 500:
|2-Hour (e-mini future)||
|30-Minute (e-mini future)||
|15-Minute (e-mini future)||
Major U.S. indices closed higher on Wednesday February 13 in lower volume. Indices gapped up at the open and the moved higher. they declined mid-day and a late push to highs failed in the last hour of trading.
The S&P 500 increased as much as 0.6% on Wednesday, as continued optimism that U.S.-China trade talks were progressing favorably underpinned another broad-based rally. The benchmark index, however, fell off morning highs and spent a good portion of the day trying to get back to its best levels. It nearly did, but a wave of selling activity in the final 30 minutes knocked it back again. The S&P 500 ended the session up 0.3%.
The Dow Jones Industrial Average (+0.5%), the Nasdaq Composite (+0.1%), and the Russell 2000 (+0.3%) also had similar price action.
Nevertheless, nine of the 11 S&P 500 sectors finished higher with energy (+1.3%), industrials (+0.6%), and consumer discretionary (+0.6%) leading the advance. Conversely, the utilities (-0.3%) and the communication services (-0.1%) sectors were the lone groups to finish with a loss.
U.S. Treasuries finished on a lower note, pushing yields higher across the curve. The 2-yr yield increased three basis points to 2.53%, and the 10-yr yield increased two basis points to 2.71%. The U.S. Dollar Index rose 0.5% to 97.17. WTI crude increased 1.3% to $53.80/bbl.
• Total CPI was unchanged (Briefing.com consensus +0.1%) while core CPI, which excludes food and energy, was up 0.2%, as expected. On a year-over-year basis, total CPI was up 1.6%, which is the smallest increase since June 2017. Core CPI was up 2.2%, which was the same increase as the 12-month periods ending in November and December.
o The key takeaway from the report is that core CPI is stable above the Fed’s longer-run target. That could give it some leeway to remain patient for the time being, but at the same time, if the stock market keeps rallying and economic data improve, it could be a basis to consider raising rates again.
• The Treasury Budget for December showed a deficit of $13.5 billion versus a deficit of $23.2 billion for the same period a year ago. The Treasury Budget data is not seasonally adjusted, so the December deficit cannot be compared to the $204.9 billion deficit for November.
o The fiscal year-to-date deficit is $318.9 billion versus a deficit of $224.9 billion for the same period a year ago. The budget deficit over the last 12 months is $873.0 billion.
• The weekly MBA Mortgage Applications Index decreased 3.7% following a 2.5% decline in the prior week.
- S&P 500 Sectors
|Sector||Daily Trend (Visual)||Relative Strength (Last Month – January)||Relative Strength (February)||%K vs. %D (January)|
|Consumer Discretionary||Down||XLY||SPY (Cross-Under)||Above|
|Consumer Staples||Down||SPY (Cross-Under)||SPY||Cross-Over|
|Energy||Down||XLE (Cross-Over)||SPY (Cross-Under)||Above|
|Finance||Down||XLF (Cross-Over)||SPY (Cross-Under)||Above|
|Utility||Under Pressure||SPY (X-Under)||SPY||Cross-Over|
|Heath Care||Down||SPY (Cross-Under)||SPY||Cross-Over|
|Real Estate||Down||XLRE (Cross-Over)||SPY (Cross-Under)||Above|