Directional Bias For The Day:
- S&P Futures are higher, though pulling back since 7:30 AM
- The odds are for an up to sideways day; watch for break below 3111.75 for change of fortune
- Key economic data due:
- NAHB housing Market Index ( 71 est.; prev. 71) at 10:00 AM
Directional Bias Before Open:
- Critical support levels for S&P 500 are 3112.36, 3104.60 and 3098.20
- Critical resistance levels for S&P 500 are 3125.75, 3131.02 and 3141.61
- Key levels for eMini futures: break above 3127.75, the high of 2:00 AM and break below 3111.50, the low of 1:30 PM on Friday
- On Friday, at 4:00 PM, S&P future closed at 3119.25 and the index closed at 3120.46 – a spread of about -1.25 points; futures closed at 3118.25 for the day; the fair value is +1.00
- Pre-NYSE session open, futures are higher – at 8:15 AM, S&P 500 futures were up by +0.75; Dow by +42 and NASDAQ by +6.75
Markets Around The World
- Markets in the East closed mixed – Shanghai, Hong Kong, Tokyo and Singapore closed up; Sydney, Mumbai and Seoul were down
- European markets are mixed – U.K., Spain, Switzerland and STOXX 600 are up; Germany, France and Italy are down
- Dollar index
- Crude Oil
- 10-yrs yield closed at 1.834%, up from November 14 close of 1.815%;
- 30-years is at 2.311%, up from 2.297%
- 2-years yield is at 1.614%, up from 1.597%
- The 10-Year-&-2-Year spread is at 0.220 up from 0.218
- Is at 12.38 up from November 15 close of 12.05; below 5-day SMA
- Recent high was 13.95 on October 31; recent low was 11.92 on November 15
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 Friday, November 15 in mixed volume. Dow Jones Industrial Average and Russell 2000 traded in lower volume. Indices are breaking out though the small caps are lagging.
For the week, major indices mostly closed higher in lower volume. Two S&P sectors – Energy and Finance – closed down for the week.
The stock market rallied higher into record territory on Friday, with risk sentiment fueled by NEC Director Larry Kudlow saying the U.S. and China are close to reaching a Phase One trade agreement. The S&P 500 (+0.8%) closed above the 3100 level, and the Dow Jones Industrial Average (+0.8%) closed above 28,000 — both for the first time.
The Nasdaq Composite (+0.7%) also closed at a record high, while the Russell 2000 (+0.5%) continued to trail its large-cap peers.
U.S. Treasuries didn’t sell off despite the risk-on mentality in the stock market, but they did edge lower. The 2-yr yield increased three basis points to 1.61%, and the 10-yr yield increased two basis points to 1.83%. The U.S. Dollar Index declined 0.2% to 97.99. WTI crude rose 0.9%, or $0.99, to $57.75/bbl.
• October retail sales increased 0.3% m/m (Briefing.com consensus +0.2%) following an unrevised 0.3% decline in September. Excluding autos, retail sales jumped 0.2% (Briefing.com consensus +0.4%) after declining an unrevised 0.1% decline in September.
o The key takeaway from the report, other than it shows continued growth in discretionary spending, is that it will be a positive input for Q4 GDP. Core retail sales, which exclude autos, gasoline, building materials, and food services and drinking places sales, and which factor into the goods component of the PCE calculation, were up 0.3%.
• Import prices for October were down 0.5%. Excluding fuel, they were down 0.2%. Export prices were down 0.1%. Excluding agricultural products, they were down 0.3%.
o The key takeaway from the report is that it points to an indolent inflation backdrop.
• Industrial production slumped 0.8% in October (Briefing.com consensus -0.4%) on the heels of an upwardly revised 0.3% decline (from -0.4%) in September. The capacity utilization rate fell to 76.7% (Briefing.com consensus 77.1%) from 77.5% in September.
o The key takeaway from the report is that, while the GM strike had a big impact on industrial production, things were still weak excluding that impact. To wit, the Federal Reserve reports industrial production declined 0.5% excluding motor vehicles and parts.
• Total business inventories were unchanged month-over-month in September (Briefing.com consensus +0.1%) after a downwardly revised 0.1% decline (from 0.0%) in August. Total business sales were down 0.2% following a downwardly revised 0.1% increase (from 0.2%) in August.
o The key takeaway from the report is that the gap between inventory growth on a yr/yr basis (+3.7%) and sales growth (+0.5%) remains, which should help keep prices in check.