Directional Bias For The Day:
- S&P Futures are down; moving lower since 12:00 PM on Thursday; broke a sequence of higher highs and higher lows since 6:00 PM on Monday
- The odds are for a down day with elevated volatility – watch for break above 2871.00 for change of fortune
- China trade and tariff news is still impacting the sentiments
- Key economic data due:
- UoM Prelim Consumer Sentiment (102.4 vs. 97.8 est. ; prev. 97.2) at 10:00 AM
- CB Leading Index (0.2% vs. 0.2% est.; prev. 0.4%) at 10:00 AM
- Prelim UoM Inflation Expectations (2.8%; prev. 2.5%) at 10:00 AM
Markets Around The World
- Markets in the East closed mixed – Shanghai, Hong Kong, Seoul and Singapore closed down; Tokyo, Sydney and Mumbai closed up
- European markets are lower
- Dollar index
- Crude Oil
- 10-yrs yield is at 2.375%, down from May 16 close of 2.405%;
- 30-years is at 2.815%, down from 2.840%
- 2-years yield is at 2.180%, down from 2.188%
- The 10-Year-&-2-Year spread is at 0.195, down from 0.217
- Critical support levels for S&P 500 are 2855.80, 2848.47 and 2839.00
- Critical resistance levels for S&P 500 are 2886.97, 2892.15 and 2897.96
- Key levels for eMini futures: break above 2871.00, the high of 5:30 AM and break below 2853.00, the low of 8:30 AM
- On Thursday, at 4:00 PM, S&P future (June contract) closed at 2878.00 and the index closed at 2876.32 – a spread of about +1.75 points; futures closed at 2878.50 for the day; the fair value is -0.50
- Pre-NYSE session open, futures are lower – at 8:45 AM, S&P 500 futures were down by -21.00; Dow by -189 and NASDAQ by -74.50
Directional Bias Before Open
- Weekly: Uptrend
- Daily: Uptrend under pressure
- 120-Min: Down-Side
- 30-Min: Down-Side
- 15-Min: Down
- 6-Min: Down
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 Thursday, May 16 in mixed volume. NASDAQ Composite and Russell 2000 traded in lower volume and Dow Jones Industrial Average, S&P 500 and Dow Jones Transportation Average traded in higher volume.
U.S. stocks advanced for the third straight session on Thursday, boosted by positive earnings reports from Cisco Systems (CSCO 55.93, +3.49, +6.7%) and Wal-Mart (WMT 101.31, +1.43, +1.4%). The 0.9% gain in the S&P 500 helped the benchmark index reclaim its 50-day moving average (2866) on a closing basis.
The Dow Jones Industrial Average increased 0.8%, the Nasdaq Composite increased 1.0%, and the Russell 2000 increased 0.6%.
All 11 S&P 500 sectors finished higher with gains ranging from 0.4% (energy) to 1.3% (materials).
U.S. Treasuries retreated on Thursday, driving yields higher, as investors embraced a risk-on mindset. The 2-yr yield increased four basis points to 2.20%, and the 10-yr yield increased three basis points to 2.41%. The U.S. Dollar Index increased 0.3% to 97.82. WTI crude rose 1.5% to $62.99/bbl.
• Housing starts increased 5.7% m/m in April to a seasonally adjusted annual rate of 1.235 million (Briefing.com consensus 1.200 mln), led by a 6.2% increase in single-unit starts. Building permits rose 0.6% m/m to 1.296 million (Briefing.com consensus 1.280 mln), although permits for single-unit dwellings declined 4.2%.
o The key takeaway from the report, however, is that there hasn’t been any acceleration in building activity. Total housing starts are down 2.5% yr/yr and single-unit starts are down 4.3% yr/yr.
• Initial claims for the week ending May 11 decreased by 16,000 to 212,000 (Briefing.com consensus 222,000). Continuing claims for the week ending May 4 decreased by 28,000 to 1.66 million.
o The key takeaway from the report is that the initial claims level remains consistent with a tight labor market that is expected to translate into another month of solid nonfarm payrolls growth.
• The Philadelphia Fed Index for May jumped to 16.6 (Briefing.com consensus 7.5) from 8.5 in April. The dividing line between expansion and contraction is 0.0.
o The key takeaway from the report is that firms were more optimistic about hiring plans over the next six months, which suggests they expect end demand to remain solid.