Directional Bias For The Day:
- S&P Futures are higher;
- The odds are for an up day – watch for break below 3317.50 for change of fortune
- Key economic data due:
- Building Permits ( 1.42M vs. 1.47M est.; prev. 1.47M) at 8:30 AM
- Housing Starts (1.61M vas. 1.38M est.; prev. 1.38M) at 8:30 AM
- Capacity Utilization (77.0% vs. 77.0% est.; prev. 77.3%) at 9:15 AM
- Industrial Production ( -0.3% vs. 0.0% est.; prev. 1.1%) at 9:15 AM
- Prelim UoM Consumer Sentiment ( est. 99.3; prev. 99.3 ) at 10:00 AM
- JOLTS Job Openings ( est. 7.24M ; prev. 7.27M) at 10:00 AM
- Prelim UoM Inflation Expectations ( prev. 2.3%) at 10:00 AM
Directional Bias Before Open:
- Critical support levels for S&P 500 are 3309.97, 3302.97 and 3398.66
- Critical resistance levels for S&P 500 are 3321.67, 3326.54 and 3335.96
- Key levels for eMini futures: break above 3328.50, the high of 8:30 AM and break below 3317.50, the low of 0:30 AM
- On Thursday, at 4:00 PM, S&P future (March 2020) closed at 3317.50 and the index closed at 3316.81 – a spread of about +0.75 points; futures closed at 3316.50 for the day; the fair value is +1.00
- Pre-NYSE session open, futures are higher – at 9:00 AM, S&P 500 futures were up by +9.75; Dow by +7 and NASDAQ by +43.00
Markets Around The World
- Markets in the East closed up;
- European markets are higher
- Dollar index
- Crude Oil
- 10-yrs yield closed at 1.843%, up from January 15 close of 1.788%;
- 30-years is at 2.304%, up from 2.242%
- 2-years yield is at 1.580%, up from 1.548%
- The 10-Year-&-2-Year spread is at 0.263 up from 0.240
- Is at 12.15 down -0.27 from January 15; below 5-day SMA
- Recent high was 16.39 on January 6; recent low was 11.72 on December 26
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 rose 0.8% on Thursday in a broad-based advance that carried the benchmark index past the 3300 level for the first time. The Dow Jones Industrial Average (+0.9%) and Nasdaq Composite (+1.1%) also closed at record highs, while the Russell 2000 outperformed with a 1.4% gain.
All 11 S&P 500 sectors started and finished in the green, with the broader market rallying into the close. The information technology sector (+1.4%) provided the leadership amid strength in its top-weighted components and the semiconductor stocks, which got a boost from the positive earnings results from Taiwan Semiconductor (TSM 58.75, +0.36, +0.6%).
U.S. Treasuries finished on a lower note amid the risk-on mindset in equities. The 2-yr yield increased two basis points to 1.57%, and the 10-yr yield increased two basis points to 1.81%. The U.S. Dollar Index increased 0.1% to 97.30. WTI crude rose 1.1%, or $0.62, to $58.48/bbl.
• Retail sales increased 0.3% m/m in December following an upwardly revised 0.3% increase (from 0.2%) in November. Retail sales, excluding autos, jumped 0.7% (Briefing.com consensus +0.5%) after a downwardly revised unchanged reading (from 0.1%) in November.
o The key takeaway from the report is that the December sales increases were broad based, with the exception of motor vehicles and parts dealers (-1.3%) and department stores (-0.8%), breathing life into the notion that the consumer remains a driving force of growth for the U.S. economy.
• Initial claims for the week ending January 11 dropped by 10,000 to 204,000 (Briefing.com consensus 217,000). Continuing claims for the week ending January 4 decreased by 37,000 to 1.767 million.
o The key takeaway from the report is that it reflects a tight labor market and has helped squelch a modestly rising uptrend in initial claims.
• Import prices for December were up 0.3%. Excluding fuel, they were flat. Export prices were down 0.2%. Excluding agricultural products, they were down 0.1%.
o The key takeaway from the report is that there were no inflation pressures embedded in the data. Nonfuel import prices were down 1.4% yr/yr while nonagricultural export prices were down 0.6%.
• Total business inventories declined 0.2% month-over-month in November, as expected, following a downwardly revised 0.1% increase (from 0.2%) in October. Total business sales were up 0.7% following a downwardly revised 0.2% decline (from -0.1%) in October.
o The key takeaway from the report is that the gap between inventory growth on a yr/yr basis (+2.8%) and sales growth (+1.0%) should help keep prices in check.
• The Philadelphia Fed Index for January jumped to 17.0 (Briefing.com consensus 3.0) from the revised 2.4 reading in December (from 0.3).
• The NAHB Housing Market Index for January declined to 75 (Briefing.com consensus 74) from 76 in December.