Directional Bias For The Day:
- S&P Futures are higher; moving higher since 4:30 AM
- The odds are for an up day – watch for break below 3209.00 for change of fortune
- Key economic data due:
- Final GDP ( 2.1% vs. 2.1% est.; prev. 2.1%) at 8:30 AM
- Final GDP Price Index (1.8% vs. 1.8% est.; prev. 1.8%) at 8:30 AM
- Core PCR Index ( 0.1% est.; prev. 0.1% ) at 10:00 AM
- Personal Spending (0.4% est. ; prev. 0.3% ) at 10:00 AM
- Personal Income ( 0.3% est.; prev. 0.0% ) at 10:00 AM
- Revised UoM Consumer Sentiment ( 99.2 est. ; prev. 99.2) at 10:00 AM
- Revised UoM Inflation Expectations ( prev. 2.4%) at 10:00 AM
Directional Bias Before Open:
- Critical support levels for S&P 500 are 3205.46, 3200.52 and 3192.32
- Critical resistance levels for S&P 500 are 3209.79, 3214.22 and 3222.95
- Key levels for eMini futures: break above 3217.00, the high of 9:00 AM and break below 3209.00, the low of 4:30 AM
- On Thursday, at 4:00 PM, S&P future (March 2020) closed at 3210.25 and the index closed at 3205.37 – a spread of about +5.00 points; futures closed at 3211.75 for the day; the fair value is -1.50
- Pre-NYSE session open, futures are higher – at 8:45 AM, S&P 500 futures were up by +3.75; Dow by +47 and NASDAQ up by +20.75
Markets Around The World
- Markets in the East closed mixed – Shanghai, Tokyo and Sydney closed lower; Hong Kong, Mumbai, Seoul and Singapore closed higher
- European markets are higher
- Dollar index
- Crude Oil
- 10-yrs yield closed at 1.935%, up from December 18 close of 1.924%;
- 30-years is at 2.364%, up from 2.351%
- 2-years yield is at 1.623%, down from 1.631%
- The 10-Year-&-2-Year spread is at 0.312 up from 0.293
- Is at 12.17 down from December 19 close of 12.50; below 5-day SMA
- Recent high was 16.90 on December 10; recent low was 11.42 on November 26
The trend and patterns on various time frames for S&P 500:
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|30-Minute (e-mini future)||
|15-Minute (e-mini future)||
The S&P 500 closed above the 3200 level for the first time on Thursday in a modest 0.4% advance. The Nasdaq Composite (+0.7%) and Dow Jones Industrial Average (+0.5%) also extended their reach into record territory. The Russell increased 0.3%.
Today’s session, though, appeared to just be a continuation of the market’s bullish bias. Nine of the 11 S&P 500 sectors finished in positive territory, with the real estate sector (+1.1%) continuing to benefit from a bargain-hunting mindset. Conversely, the energy (-0.1%) and utilities (-0.1%) sectors finished lower.
U.S. Treasuries edged higher, pushing yields slightly lower across the curve. The 2-yr and 10-yr yields both declined two basis points each to 1.60% and 1.91%, respectively. The U.S. Dollar Index finished little changed at 97.39. WTI crude rose 0.6% (+0.37%) to $61.30/bbl.
• Existing home sales declined 1.7% m/m in November to a seasonally adjusted annual rate of 5.35 million units (Briefing.com consensus 5.45 million) from a downwardly revised 5.44 million (from 5.46 million) in October.
o The key takeaway from the report is that home sales continue to be held back by the same forces: a lack of available supply and rising prices.
• Initial claims for the week ending December 7 rose by 49,000 to 252,000 (Briefing.com consensus 212,000). That is the highest level of initial claims since September 30, 2017. Continuing claims for the week ending November 30 decreased by 31,000 to 1.667 million.
o The key takeaway from the report is that the latest figure is outside the range of what has become typical reporting for this series, so it may be discounted as aberrant; however, the slowly rising uptick in the four-week moving average for initial claims implies that we may have seen the bottom for this cycle.
• The Conference Board’s Leading Economic Index (LEI) was unchanged in November (Briefing.com consensus +0.1%) following three straight monthly declines. October was revised to -0.2% from -0.1%.
o The key takeaway from the report is the understanding that the LEI went negative (-0.2%) for the six-month period ending November versus growth of 0.3% over the previous six months.
• The Philadelphia Fed Index for December came in at 0.3 (Briefing.com consensus 8.0), well below the 10.4 reading in November.
• The current account deficit for the third quarter totaled $124.1 billion (Briefing.com consensus -$122.0 billion). The second quarter deficit was revised to $125.2 billion from $128.2 billion.