Directional Bias For The Day:
- S&P Futures are limit down since 6:00 PM on Sunday
- The odds are for a down day with elevated volatility;
- Key economic data due:
- Empire State Manufacturing Index ( -21.5% vs. 5.1% est.; prev. 12.9%) at 9:30 AM
- TLC Long-Term Purchases (est. 72.5B; prev. 85.6B) at 4:00 PM
Directional Bias Before Open:
- Critical support levels for S&P 500 are 2478.86, 2443/96 and 2397.94
- Critical resistance levels for S&P 500 are 2492.37, 2531.73 and 2710.89
- Key levels for eMini futures: break above 2380.00, the low of 10:00 PM on March 12
- On Friday, at 4:00 PM, S&P future (March 2020) closed at 2703.75 and the index closed at 2711.02 – a spread of about -7.25 points; futures closed at 2684.00 for the day; the fair value is +19.75
- Pre-NYSE session open, futures are limit down since 6:00 PM on Sunday
Markets Around The World
- Markets in the East closed lower
- European markets are lower
- Dollar index
- Crude Oil
- 10-yrs yield is at 0.764%, down from March 13 close of 0.951%;
- 30-years is at 1.399%, down from 1.552%
- 2-years yield is at 0.342% down from 0.502%
- The 10-Year-&-2-Year spread is at 0.422 down from 0.449
- Not trading
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 sharply higher on Friday, March 13 in lower volume. The indices gained more than 9% in the final few minutes of trading. This was news driven and mostly looked like shorts covering.
For the week, major U.S. indices declined sharply in higher volume. The decline was global and across many asset classes.
The stock market rebounded on Friday, though the advance still left the major averages deep in the red for the week. The S&P 500 rallied 9.3%, narrowing this week’s loss to 8.8% while the Russell 2000 (+7.7%; -16.6% for the week) underperformed.
Stocks jumped out of the gate after equity futures hit a circuit breaker, but this time, it was to the upside. The early rally set expectations for a strong rebound, but the bulk of the cash session was not as inspiring. The first three hours of trade saw a pullback, during which the S&P 500 approached yesterday’s closing level.
The index returned to its starting mark in midday trade, but regrouped and staged a huge 6.7% rally in the last 30 minutes as the president was discussing measures to deal with the coronavirus.
Lawmakers in Washington neared an agreement on some fiscal relief measures while President Trump declared a national emergency during a late-afternoon speech. The declaration will allow up to $50 bln in spending. Separately, the president said interest on student loans will be waived until further notice and that the U.S. will be purchasing oil to fill the Strategic Petroleum Reserve.
• Import prices declined 0.5% month-over-month in February and were up 0.3% excluding fuel. Export prices were down 1.1%, and down 1.0% excluding agricultural products. On a year-over-year basis, import prices were down 1.2%, and down 0.7% excluding fuel. Export prices were down 1.3% yr/yr, and down 1.6% excluding agricultural products.
o The key takeaway from the report is that inflation is still missing for the most part in terms of both import and export prices.
• The preliminary March reading for the University of Michigan’s Index of Consumer Sentiment showed a drop to 95.9 (Briefing.com consensus 96.0) from the final reading of 101.0 for February.
o The key takeaway from the report is that sentiment has been shaken by the spread of the coronavirus and the sharp decline in stock prices, both of which are weighing on expectations that should translate into lower levels of consumer spending activity.