Directional Bias For The Day:
- S&P Futures are higher; moving sideways to up since 4:30 AM
- The odds are for an up to sideways day – watch for break below 2887.25 for change of fortune
- Key economic data due:
- Import Prices ( -0.3% vs. -0.3% est. ; 0.2%) at 8:30 AM
- Unemployment Claims ( 222K vs. 215K est.; prev. 218K ) at 8:30 AM
Markets Around The World
- Markets in the East closed mostly lower – Shanghai and Singapore closed up
- European markets are higher
- Dollar index
- Crude Oil
- 10-yrs yield is at 2.112%, down from June 12 close of 2.127%;
- 30-years is at 2.610%, down from 2.623%
- 2-years yield is at 1.893%, down from 1.938%
- The 10-Year-&-2-Year spread is at 0.219, up from 0.189
- Critical support levels for S&P 500 are 2874.68, 2852.787 and 2842.30
- Critical resistance levels for S&P 500 are 2888..57, 2891.16 and 2902.12
- Key levels for eMini futures: break above 2894.50, the high of 6:30 AM and break below 2887.25, the low of 8:30 AM
- On Wednesday, at 4:00 PM, S&P future (June contract) closed at 2880.75 and the index closed at 2879.84 – a spread of about +1.00 points; futures closed at 2881.00 for the day; the fair value is -0.25
- Pre-NYSE session open, futures are higher – at 9:00 AM, S&P 500 futures were up by +8.00; Dow by +73 and NASDAQ by +29.50
Directional Bias Before Open
- Weekly: Uptrend under pressure
- Daily: Uptrend under pressure
- 120-Min: Up-Side
- 30-Min: Side-Up
- 15-Min: Side-Up
- 6-Min: 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 mostly closed lower on Wednesday, June 12 in lower volume. Dow Jones Transportation Average and Russell 2000 closed up. The day’s range was small and most made doji or small spinning top candles. Three day evening star pattern is emerging on most indices and a close below Wednesday’s low will complete the pattern.
The S&P 500 declined 0.2% on Wednesday in a lackluster session that saw little buying conviction from investors. Shares of energy and financial companies contributed to the lower finish, while defensive-oriented sectors helped limit losses.
The Dow Jones Industrial Average lost 0.2%, and the Nasdaq Composite lost 0.4%. The Russell 2000 (+0.04%) finished just above its flat line.
There was a bit of a defensive tilt to the session, though, evident by the increased demand for U.S. Treasuries and the outperformance of the defensive-oriented sectors. The S&P 500 utilities (+1.3%), health care (+0.5%), and real estate (+0.3%) sectors were among the day’s best performers.
The S&P 500 energy sector (-1.4%) was Wednesday’s worst-performing group, falling on the back of oil prices ($51.16, -$2.18, -4.1%) amid bearish inventory data. The financials sector (-1.0%) was undercut by lower Treasury yields and by shares of Wells Fargo (WFC 44.91, -1.35, -2.9%) after it warned net interest income for 2019 will be at the low end of prior guidance.
The 2-yr yield declined four basis points to 1.89%, and the 10-yr yield declined one basis point to 2.13%. The U.S. Dollar Index advanced 0.3% to 97.01.
• Total CPI increased 0.1%, as expected, and so did core CPI, which excludes food and energy prices (Briefing.com consensus +0.2%). The monthly changes left the yr/yr readings at 1.8% and 2.0%, respectively, versus 2.0% and 2.1% for the 12 months ending in April.
o The key takeaway from the report is that consumer inflation pressures remain muted, which in turn is going to reinforce the market’s inflated expectations for the Fed to cut the target range for the fed funds rate sooner rather than later.
• The weekly MBA Mortgage Applications Index soared 26.8% amid a drop in mortgage rates.
• The Treasury Budget for may showed a deficit of $207.8 billion versus a deficit of $146.8 billion for the same period one year ago. The Treasury Budget is not seasonally adjusted, so the May deficit cannot be compared to the $160.3 billion surplus for April.
o The fiscal year-to-date deficit is $738.6 billion versus a deficit of $532.2 billion for the same period ago. The budget deficit over the last 12 months is $985.4 billion, versus $924.4 billion for the 12 months ending in April.
Looking ahead, investors will receive the weekly Initial and Continuing Claims report and Export and Import Prices for May on Thursday.