Directional Bias For The Day:
- S&P Futures are slightly higher; bouncing up from the lows reached at the NYSE close
- The odds are for a down to sideways day – watch for break above 2996.00 for change of fortune
- Key economic data due:
- Challenger Jobs Cut (43.2%; prev. 12.8%) at 7:30 AM
- Unemployment Clams ( 215K vs. 212K est. ; prev. 207K) at 8:30 AM
- ISM Manufacturing PMI (est. 52.0; prev. 51.7) at 10:00 AM
Markets Around The World
- Markets in the East closed mostly lower – Tokyo closed up
- European markets are mostly higher – U.K is down; Switzerland is closed
- Crude Oil
- 10-yrs yield is at 2.021%, down from July 30 close of 2.061%;
- 30-years is at 2.527%, down from 2.586%
- 2-years yield is at 1.870%, up from 1.854%
- The 10-Year-&-2-Year spread is at 0.151, down from 0.199
- Critical support levels for S&P 500 are 2972.67, 2958.08 and 2952.22
- Critical resistance levels for S&P 500 are 2994.63, 2997.90 and 3011.53
- Key levels for eMini futures: break above 2989.50, the high of 5:00 AM and break below 2978.75, the low of 4:30 AM
- On Wednesday, at 4:00 PM, S&P future closed at 2979.50 and the index closed at 2980.38 – a spread of about -1.00 points; futures closed at 2982.25 for the day; the fair value is -2.75
- Pre-NYSE session open, futures are little changed to up – at 8:45 AM, S&P 500 futures were up by +0.75; Dow by +22 and NASDAQ by +10.25
Directional Bias Before Open
- Weekly: Uptrend resumed
- Daily: Uptrend Under Pressure
- 30-Min: Down-Side
- 15-Min: Down-Side
- 6-Min: Side-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 closed sharply lower on Wednesday, July 31 in higher volume. Indices declined after the Fed Statement and press conference at 2:00 PM and 2:30 PM respectively. Indices made shooting star of doji on monthly charts. The Stochastic is forming a Bearish Divergence on monthly charts, which doesn’t bode well, at least for near future, for equities.
The S&P 500 fell as much as 1.8% on Wednesday after Fed Chair Powell indicated that the July rate cut was not the start of an easing cycle. Stocks did rally off lows, though, after Mr. Powell quickly suggested that policy could still accommodate another cut if necessary. The S&P 500 finished lower by 1.1%.
The Dow Jones Industrial Average (-1.2%) and Nasdaq Composite (-1.2%) posted comparable losses to the benchmark index, while the Russell 2000 (-0.7%) fared slightly better.
U.S. Treasuries also experienced noticeable movements, ultimately flattening the yield curve by session’s end. The 2-yr yield, which touched 1.80% prior to the press conference, finished three basis points higher to 1.88%. The 10-yr yield finished near its lows, declining four basis points to 2.02%. The U.S. Dollar Index rose 0.6% to 98.62. WTI crude increased 0.6% to $58.38/bbl.
• The ADP Employment Change report showed an estimated 156,000 positions were added to private-sector payrolls in July (Briefing.com consensus 150,000).
• The Q2 Employment Cost Index increased 0.6% (Briefing.com consensus 0.6%), seasonally adjusted, for the three-month period ending in June 2019 after increasing 0.7% for the three-month period ending in March 2019. Wages and salaries, which account for about 70% of compensation costs, rose 0.7%, while benefit costs, which make up the remainder of compensation costs, increased 0.5%.
o The key takeaway from the report is that there has been some moderation in the growth rate of employment costs for civilian workers.
• The July Chicago PMI came in at 44.4 (Briefing.com consensus 50.5), slipping further into contraction territory after coming in at 49.7 in June. A reading below 50.0 denotes a contraction.
• The weekly MBA Mortgage Applications Index declined 1.4% following a 1.9% decline in the prior week.