Directional Bias For The Day:
- S&P Futures are limit down;
- The odds are for a down day with extreme volatility;
- Key economic data due:
- Building Permits ( 1.46M vs. 1.50M est.; prev. 1.55M) at 8:30 AM
- Housing Starts ( 1.60M vs. 1.51M est.; prev. 1.62M) at 8:30 AM
Directional Bias Before Open:
- Critical support levels for S&P 500 are 2397.94, 2367.04 and 2346.58
- Critical resistance levels for S&P 500 are 2448.00, 2529.56 and 2553.93
- Key levels for eMini futures: break above 2393.50, the high of 7:00 AM and break below 2352.00, the low of 9:30 AM on Tuesday
- On Tuesday, at 4:00 PM, S&P future (June 2020) closed at 2531.50 and the index closed at 2529.19 – a spread of about +2.35 points; futures closed at 2485.50 for the day; the fair value is +46.00
- Pre-NYSE session open, futures are limit down
Markets Around The World
- Markets in the East closed lower
- European markets are lower
- Dollar index
- Crude Oil
- 10-yrs yield is at 1.067%, up from March 17 close of 0.997%;
- 30-years is at 1.689%, up from 1.582%
- 2-years yield is at 0.436% down from 0.493%
- The 10-Year-&-2-Year spread is at 0.631 up from 0.504
- Not Trading;
- At highest levels ever
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 indices opened up and then tested previous day’s laws before turning around and then mostly trading higher. Previous day’s high was not broken.
The S&P 500 rebounded 6.0% on Tuesday, as investors reacted positively to additional monetary stimulus measures and the possibility of an estimated $1 trillion fiscal stimulus package. The Dow Jones Industrial Average rose 5.2%, the Nasdaq Composite rose 6.2%, and the Russell 2000 rose 6.7%.
Despite the stimulus plans, and preventative measures, it was a defensive-minded rally led by the S&P 500 utilities (+13.1%), consumer staples (+8.4%), and real estate (+6.9%) sectors. The energy sector (+0.7%) underperformed amid continued weakness in the price of oil ($27.02/bbl, -1.83, -6.3%).
U.S. Treasuries sold off in a curve-steepening trade, not because of a better economic view but because of worries that longer-dated bonds will be needed to fund a rising deficit. The 2-yr yield rose eight basis points to 0.45%, and the 10-yr yield rose 27 basis points to 1.00%. The U.S. Dollar Index rose 1.7% to 99.81.
• Total retail sales declined 0.5% m/m (Briefing.com consensus +0.1%) following an upwardly revised 0.6% increase (from 0.3%) in January. Excluding autos, retail sales were down 0.4% m/m (Briefing.com consensus +0.1%) after an upwardly revised 0.6% increase (from 0.3%) in January.
o The key takeaway from this report is that it reflected soft spending activity before the the coronavirus impact (and reaction) truly hit the U.S. That’s not comforting knowing that the retail sales data in March is going to be absolutely awful.
• Industrial production increased 0.6% m/m in February, as expected, following a downwardly revised 0.5% decline (from -0.3%) in January. Total capacity utilization was 77.0% (Briefing.com consensus 77.1%) following a downwardly revised 76.6% (from 76.8%) in January.
o The key takeaway from the report is that the good feelings about the pickup in output in February will be stunted by the reality that March output is apt to look much worse given the economic shutdown measures employed to help curb the spread of the coronavirus.
• The NAHB Housing Market Index for March declined to 72 (Briefing.com consensus 74) from 74 in February.
• The January Job Openings and Labor Turnover Survey showed job openings increase to 6.963 million from a revised 6.552 million in December (from 6.423 million).
• Business inventories decreased 0.1% in January, as expected, while the December reading was unrevised at 0.1%.