Directional Bias For The Day:
- S&P Futures are higher;
- The odds are for an up day with elevated volatility
- Key economic data due:
- Factory Orders ( 0.7% est.; prev. -0.7% ) at 10;00 AM
Directional Bias Before Open:
- Critical support levels for S&P 500 are 3268.44, 3256.71 and 3244.30
- Critical resistance levels for S&P 500 are 3285.91, 3293.47 and 3300.15
- Key levels for eMini futures: break above 3296.25, the high of 0:00 AM on January 31 and break below 3277.00, the low of 4:00 AM
- On Monday, at 4:00 PM, S&P future (March 2020) closed at 3247.00 and the index closed at 3248.92 – a spread of about -2.00 points; futures closed at 3245.50 for the day; the fair value is +1.50
- Pre-NYSE session open, futures are higher – at 9:00 AM, S&P 500 futures were up by +42.00; Dow by +369 and NASDAQ by +142.50
Markets Around The World
- Markets in the East were closed higher;
- European markets are higher
- Dollar index
- Crude Oil
- 10-yrs yield is at 1.591%, up from February 3 close of 1.520%;
- 30-years is at 2.062%, up from 1.997%
- 2-years yield is at 1.399%, up from 1.351%
- The 10-Year-&-2-Year spread is at 0.192 up from 0.169
- Is at 15.76 down -2.21 from February 3; below 5-day SMA
- Next high resistance is 21.46, the high of October 2, 2019; the low support is the 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 advanced 0.7% on Monday, as investors presumably viewed last week’s drop as a good opportunity to buy the dip. The Nasdaq Composite (+1.3%) and Russell 2000 (+1.1%) outperformed, while the Dow Jones Industrial Average (+0.5%) trailed its peers.
Eight of the 11 S&P 500 sectors posted gains, including the materials (+2.1%), information technology (+1.3%), and communication services (+1.3%) sectors. The latter was aided by shares of Alphabet (GOOG 1485.94, +51.71), which rose 3.6% in front of the company’s earnings report after the close.
The energy sector (-1.3%) remained hampered by falling oil prices ($50.05, -1.53, -3.0%) amid pestering concerns that the coronavirus outbreak will undercut demand for oil. Prices barely reacted to reports that Saudi Arabia will try to convince OPEC+ to agree to large production cuts.
U.S. Treasuries started the day on a lower note but spent a bulk of intraday action rebounding from session lows. The 2-yr yield increased three basis points to 1.35%, and the 10-yr yield was unchanged at 1.52%. The U.S. Dollar Index rose 0.5% to 97.84.
• The ISM Manufacturing Index for January jumped to 50.9% (Briefing.com consensus 48.1%) from an upwardly revised 47.8% (from 47.2%) in December. January marked the first reading above 50% in six months.
o The key takeaway from the report is that the manufacturing sector went back into an expansion mode in January, aided by a jump in new orders, production, and new export orders.
• Total construction spending decreased 0.2% m/m in December (Briefing.com consensus +0.5%) on the heels of an upwardly revised 0.7% increase (from +0.6%) in November. Residential spending was up 1.4% m/m and nonresidential spending was down 1.2% m/m.
o The key takeaway from the report is that there was continued strength in new single-family construction (+2.7%), which was the main driver of the pickup in residential spending.