Directional Bias For The Day:
- S&P Futures are up; moving higher since 3:30 AM after making a near double bottom;
- The odds are for an up day with elevated volatility – watch for break below 2853.25 for change of fortune
- China trade and tariff news is still impacting the sentiments
- Key economic data due:
- Building Permits (1.30M vs. 1.29M est; prev. 1.29M ) at 8:30 AM
- Housing Starts (1.24M vs. 1.21M est.; prev. 1.17M) at 8:30 AM
- Philly Fed Manufacturing Index ( 16.6 vs. 10.0 est.; prev. 8.5) at 8:30 AM
- Unemployment Claims (212K vs. 220K est.; prev. 228K ) at 8:30 AM
Markets Around The World
- Markets in the East closed mostly up – Tokyo and Seoul were down
- European markets are higher
- Dollar index
- Crude Oil
- 10-yrs yield is at 2.396%, up from May 15 close of 2.379%;
- 30-years is at 2.830%, up from 2.823%
- 2-years yield is at 2.200%, up from 2.163%
- The 10-Year-&-2-Year spread is at 0.198, down from 0.216
- Critical support levels for S&P 500 are 2848.47, 2839.00 and 2820.08
- Critical resistance levels for S&P 500 are 2862.58, 2873.67 and 2891.31
- Key levels for eMini futures: break above 2868.00, the high of 7:00 AM and break below 2841.75, the low of 3:30 AM
- On Wednesday, at 4:00 PM, S&P future (June contract) closed at 2853.00 and the index closed at 2850.96 – a spread of about +2.00 points; futures closed at 2855.00 for the day; the fair value is -2.00
- Pre-NYSE session open, futures are higher – at 8:45 AM, S&P 500 futures were up by +7.75; Dow by +88 and NASDAQ by +1.75
Directional Bias Before Open
- Weekly: Uptrend
- Daily: Uptrend under pressure
- 120-Min: Down-Side
- 30-Min: Up
- 15-Min: Up
- 6-Min: Up-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)||
Major U.S. indices closed higher on Wednesday, May 15 in mixed volume. Dow Jones Transportation Average and Russell 2000 traded in higher volume and Dow Jones Industrial Average, S&P 500 and NASDAQ Composite traded in lower volume. Most indices made bullish engulfing candle after testing the lows of Tuesday.
The S&P 500 advanced 0.6% on Wednesday, overcoming a lower start that was attributed to concerns about slowing growth. The market, though, has shown a propensity to bounce on any positive-sounding trade headline, and today was no different.
The Dow Jones Industrial Average (+0.5%) and the Nasdaq Composite (+1.1%), like the S&P 500, were each down as much as 0.7% intraday before rallying. The Russell 2000 increased 0.3% after being down as much as 0.9%.
The S&P 500 communication services (+2.1%), information technology (+1.0%), consumer staples (+0.8%), and consumer discretionary (+0.8%) sectors outperformed the broader market. The financials (-0.5%), materials (-0.2%), and utilities (-0.1%) sectors were the lone groups to finish lower.
The data underpinned the buying interest in U.S. Treasuries, which only tapered off slightly during the rally in equities. The 2-yr yield and the 10-yr yield declined four basis points each to 2.16% and 2.38%, respectively. The U.S. Dollar Index increased 0.1% to 97.58. WTI crude increased 0.4% to $62.06/bbl.
• Total retail sales declined 0.2% (Briefing.com consensus +0.2%) after increasing an upwardly revised 1.7% (from 1.6%) in March. Excluding autos, retail sales rose just 0.1% in April (Briefing.com consensus +0.6) following an upwardly revised 1.3% increase (from 1.2%) in March.
o The key takeaway from the report is that consumers curtailed discretionary spending on goods in April in a way that will temper the outlook for Q2 GDP growth.
• Industrial production declined 0.5% in April (Briefing.com consensus +0.1%) following an upwardly revised 0.2% increase (from -0.1%) in March. Total capacity utilization fell to 77.9% (Briefing.com consensus 78.8%) from a downwardly revised 78.5% (from 78.8%) in March.
o The key takeaway from the report is the understanding that it marked the fourth straight month in which there was no growth in manufacturing output.
• Business inventories were unchanged in March, as expected, following an unrevised 0.3% increase in February. Business sales increased 1.6% on the heels of an upwardly revised 0.2% increase (from 0.1%) in February.
o The key takeaway from the report is that the inventory growth on a yr/yr basis (+5.0%) continues to outpace sales growth (+3.7%), which should keep price pressures in check.
• The weekly MBA Mortgage Application Index declined 0.6% following a 2.7% increase in the prior week.
• The Empire State Manufacturing Survey for May increased to 17.8 (Briefing.com consensus 7.7) from the prior month’s reading of 10.1.
• The NAHB Housing Market Index increased to 66 (Briefing.com consensus 64) from 63 in April.