Directional Bias For The Day:
- S&P Futures are sharply lower; bouncing up from a low of 2883.50 at 9:00 PM on Sunday, a 66 point decline from Friday’s close;
- The odds are for a down day with elevated volatility though with a decent chance of moving sideways to up from pre-NYSE levels – watch for break above 2917.75, the low of the gap, for change of fortune
- No key economic data due:
Markets Around The World
- Markets in the East closed down – Tokyo and Seoul were closed for trading
- European markets are mostly lower – U.K. is higher
- Dollar index
- Crude Oil
- 10-yrs yield closed at 2.487%, down from May 2 close of 2.552%;
- 30-years is at 2.895%, down from 2.943%
- 2-years yield is at 2.286%, down from 2.339%
- The 10-Year-&-2-Year spread is at 0.148, down from 0.213
- Critical support levels for S&P 500 are 2900.50, 2896.35 and 2891.90
- Critical resistance levels for S&P 500 are 2917.51, 2929.21 and 2946.61
- Key levels for eMini futures: break above 2904.75, the high of 8:00 AM and break below 2891.25, the low of 5:00 AM
- On Friday, at 4:00 PM, S&P future (June contract) closed at 2945.75 and the index closed at 2945.64 – a spread of about +0.25 points; futures closed at 2947.50 for the day; the fair value is -1.75
- Pre-NYSE session open, futures are lower – at 9:00 AM, S&P 500 futures were down by -45.50; Dow by -493 and NASDAQ by -147.75
Directional Bias Before Open
- Weekly: Uptrend
- Daily: Uptrend
- 120-Min: Down
- 30-Min: Down-Side
- 15-Min: Down-Side
- 6-Min: Down-Side
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)||
For the week, the U.S. indices mostly higher in mostly higher volume. Dow Jones Industrial Average closed down and Dow Jones Transportation Average traded in lower volume over the week.
The S&P 500 advanced 1.0% on Friday, as a strong employment report underpinned a move back to near all-time highs. Friday’s gains helped the benchmark index finish the week higher by 0.2%.
The Nasdaq Composite (+1.6%) set a new closing record, and it also finished the week higher by 0.2%. The Russell 2000 (+2.0%) outperformed and finished the week with a gain of 1.4%. The Dow Jones Industrial Average (+0.8%) reduced its weekly loss to 0.1%.
All 11 of the S&P 500 sectors finished higher with gains ranging from 0.7% (utilities) to 1.4% (consumer discretionary).
The S&P 500 energy sector (+0.8%) was a strong performer for most of the session as oil prices ($61.93/bbl, +$0.16, +0.3%) stabilized, but the group succumbed to selling interest into close. The energy space had fallen in tandem with oil this week, finishing the week with a steep loss of 3.3%.
U.S. Treasuries ended the week on a higher note, pushing yields slightly lower. The 2-yr yield and the 10-yr yield declined two basis points each to 2.32% and 2.53%, respectively. The U.S. Dollar Index lost 0.4% to 97.49.
• The Employment Situation report pointed to strong headline growth and subdued inflationary pressure stemming from rising wages. Nonfarm payrolls increased by 263,000 while average hourly earnings were up just 0.2%, leaving them up 3.2% yr/yr, unchanged from what was seen in the March report.
o The April report should support the Fed’s case for staying on its current policy path.
• The ISM Non-Manufacturing Index (NMI) for April decreased to 55.5% (Briefing.com consensus 57.4%) from 56.1% in March. The dividing line between expansion and contraction is 50.0%. The April reading is the lowest level for the index since August 2017.
o The key takeaway from the report is that all index components remained above 50.0, indicating continued growth, though at a slower pace. According to the ISM, the past relationship between the NMI and the overall economy indicates the NMI for April corresponds to a 2.4% increase in real GDP on an annualized basis.
• The Advance report for International Trade in Goods for March showed a deficit of $71.5 billion. The Advance report for Wholesale Inventories for March showed a decrease of 0.3%, and the Advance report for Retail Inventories for March showed no change in retail inventories.