Directional Bias For The Day:
- S&P Futures are little changed to lower;
- Moving mostly sideways since 8:30 AM on December 10
- The odds are for a sideways to down day – watch for break above 3150.75 for change of fortune
- Key economic data due:
- PPI ( 0.0% vs. 0.2% est. ; prev. 0.4%) at 8:30 AM
- Core PPI ( -0.2% vs. 0.2% est. ; prev., 0.3%) at 8:30 AM
- Unemployment Claims ( 252K vs. 213K est. ; prev. 203K) at 8:30 AM
Directional Bias Before Open:
- Critical support levels for S&P 500 are 3133.21, 3126.09 and 3124.90
- Critical resistance levels for S&P 500 are 3143.98, 3150.37 and 3154.26
- Key levels for eMini futures: break above 3150.75, the high of 4:30 AM and break below 3133.50, the low of 1:30 PM on Wednesday
- On Wednesday, at 4:00 PM, S&P future closed at 3141.75 and the index closed at 3141.63 – a spread of about +0.25 points; futures closed at 3143.00 for the day; the fair value is -1.25
- Pre-NYSE session open, futures are lower – at 9:00 AM, S&P 500 futures were down by -1.00; Dow by -25 and NASDAQ by -9.25
Markets Around The World
- Markets in the East closed mostly higher – Shanghai and Sydney were down
- European markets are mixed – U.K., Spain and Italy are higher; Germany, France, Switzerland and STOXX 600 are lower
- Dollar index
- Crude Oil
- 10-yrs yield is at 1.793%, up from December 11 close of 1.790%;
- 30-years is at 2.243%, up from 2.220%
- 2-years yield is at 1.601%, down from 1.605%
- The 10-Year-&-2-Year spread is at 0.197 up from 0.185
- Is at 15.35 up from December 11 close of 14.99; above 5-day SMA
- Recent high was 17.99 on December 3; recent low was 12.25 on December 9
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)||
The S&P 500 increased 0.3% on Wednesday, as investors remained comforted by the few surprises in the FOMC’s latest policy directive and Fed Chair Powell’s press conference. The Nasdaq Composite (+0.4%) pulled out ahead, while the Dow Jones Industrial Average (+0.1%) and Russell 2000 (unch) finished closer to their flat lines.[…]
The broader advance was kept in check, though, with the S&P 500 materials (+0.7%), information technology (+0.7%), and industrials (+0.7%) sectors finishing atop the standings. The real estate (-0.8%), financials (-0.2%), and energy (-0.2%) sectors finished in negative territory.[…]
U.S. Treasuries, which were already trending higher before the FOMC announcement, extended gains during Mr. Powell’s press conference. Both the 2-yr yield and 10-yr yield declined four basis points each to 1.61% and 1.79%, respectively, with investors presumably unconcerned about inflation. The U.S. Dollar Index fell 0.3% to 97.10. WTI crude fell 0.8% (-0.47) to $58.74/bbl.[…]
• The Consumer Price Index (CPI) increased 0.3% month-over-month in November (Briefing.com consensus +0.2%) and core CPI, which excludes food and energy, increased 0.2%, as expected, for the second straight month.
o The key takeaway from the report is that there was an uptick in prices across most key categories. That uptick is something the Fed wants to see at this juncture and it won’t be quick to stamp it out with a rate hike, particularly since the Fed’s favorite inflation gauge — the PCE Price Index — is still running comfortably below the longer-run 2.0% inflation target.
• The Treasury Budget for November showed a deficit of $208.8 billion versus a deficit of $204.9 billion in the same period a year ago. This budget data is not seasonally adjusted, so the November deficit cannot be compared to the deficit of $134.5 billion for October.
o The budget deficit over the last 12 months is $1.022 trillion versus $1.018 trillion in October. The fiscal year-to-date deficit is $343.3 billion versus $305.4 for the same period a year ago.
• The weekly MBA Mortgage Applications Index increased 3.8% following a 9.2% drop in the prior week.