Directional Bias For The Day:
- S&P Futures are higher; moving down since 6:45 AM from a high of 2856.75 to just below 2850
- The odds are for an up to sideways day with elevated volatility – watch for break below 2842.25 for change of fortune
- Key economic data due:
- Non-Farm Employment Change ( 75K vs. 177K est. ; prev. 24K) at 8:30 AM
- Unemployment Rate ( 3.6% vs. 3.6% est.; prev. 3.6% ) at 8:30 AM
- Average Hourly Earnings ( 0.2% vs. 0.3% est.; prev. 0.2%) at 8:30 AM
- Final Wholesale Inventories ( est. 0.7%; prev. 0.7%) at 10:00 AM
Markets Around The World
- Markets in the East closed higher – Shanghai and Hong Kong were closed
- European markets are higher
- Dollar index
- Crude Oil
- 10-yrs yield is at 2.101%, down from June 6 close of 2.124%;
- 30-years is at 2.590%, down from 2.622%
- 2-years yield is at 1.835%, down from 1.855%
- The 10-Year-&-2-Year spread is at 0.219, down from 0.237
- Critical support levels for S&P 500 are 2842.30, 2822.45 and 2815.32
- Critical resistance levels for S&P 500 are 2852.10, 2863.18 and 2868.75
- Key levels for eMini futures: break above 2856.25, the high of 7:00 AM and break below 2842.25, the low of 9:00 PM
- On Thursday, at 4:00 PM, S&P future (June contract) closed at 2845.00 and the index closed at 2843.49 – a spread of about +1.50 points; futures closed at 2845.75 for the day; the fair value is -0.75
- Pre-NYSE session open, futures are higher – at 8:15 AM, S&P 500 futures were up by +7.75; Dow by +65 and NASDAQ by +24.75
Directional Bias Before Open
- Weekly: Uptrend under pressure
- Daily: Uptrend under pressure
- 120-Min: Up
- 30-Min: Up
- 15-Min: Up
- 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 mostly closed higher on Thursday, June 6 in lower volume. Dow Jones Transportation Average and Russell 2000 closed down. Last two days were good follow-through day for most indices after the big gain on Tuesday but the lower volume dampens it impact. The volume has been lower for the last three days. All S&P sectors were up for the day.
The stock market extended its rally to a third consecutive day on Thursday, boosted by news that the U.S. may delay the proposed 5% tariff rate on all imports from Mexico. The 0.6% gain in the S&P 500 lifted the benchmark index nearly 100 points above last Friday’s closing price
The Dow Jones Industrial Average increased 0.7%, and the Nasdaq Composite increased 0.5%. The Russell 2000 (-0.2%), however, lost ground for the second straight session.
A turnaround in oil prices ($52.64, +$0.98, +1.9%) padded the rebound in the energy sector (+1.7%), semiconductor stocks boosted the information technology sector (+1.1%), and the trade-sensitive materials sector (+1.1%) also outperformed. The Philadelphia Semiconductor Index advanced 1.3%.
On a related note, the European Central Bank left its key rates unchanged as was expected, and it expects those rates to remain at their current levels at least through the first half of 2020. The euro advanced 0.5% against the dollar to 1.1272. The U.S. Dollar Index declined 0.3% to 97.06.
Shorter-dated U.S. Treasuries backtracked from yesterday’s advance, pushing the 2-yr yield up five basis points to 1.89%. The 10-yr yield finished unchanged at 2.12% for the second straight day.
• Initial claims for the week ending June 1 hit 218,000 (Briefing.com consensus 220,000), representing no change from the prior week’s revised level (from 215,000). Continuing claims for the week ending May 25 increased by 20,000 to 1.682 mln.
o The key takeaway from the report is that claims continue reflecting a tight labor market.
• Nonfarm business sector productivity increased 3.4% in the first quarter (Briefing.com consensus 3.4%), according to the revised reading. The initial reading estimated that productivity increased 3.6% in Q1. Unit labor costs decreased 1.6% in the first quarter (Briefing.com consensus -0.8%), down from the initial estimate of a decrease of 0.9%.
o The key takeaway from the report is that the decrease in unit labor costs indicates muted inflationary pressures.
• The trade deficit narrowed to $50.8 bln in April from a revised deficit of $51.9 bln (from $50.0 bln) in March. Exports of $206.8 bln were $4.4 bln below the March level while imports of $208.7 bln were $5.4 bln below the March total.
o The key takeaway from the report is that even with the modest April decrease, the monthly deficit level has not changed much over the past year.