Directional Bias For The Day:
- S&P Futures are higher to unchanged; were higher before Unemployment Claims report; down from 2502.00 at 4:00 AM to near 2460.00 at 9:00 AM
- The odds are for a sideways to down day from pre-NYSE session levels with high volatility – watch for break above 2502.00 for change of fortune
- Key economic data due:
- Unemployment Claims ( 6648K vs. 3600K est.; prev. 3307K ) at 8:30 AM
- Trade Balance ( -39.9B vs. -40.6B est ; prev. -45.5B) at 8:30 AM
- Factory Orders ( est. 0.2%; prev. -0.5%) at 10:00 AM
Directional Bias Before Open:
- Critical support levels for S&P 500 are 2447.49, 2407.53 and 2360.25
- Critical resistance levels for S&P 500 are 2494.67, 2522.75 and 2574.84
- Key levels for eMini futures: break above 2498.50, the high of 8:00 AM and break below 2434.25, the low of 3:30 PM on Wednesday
- On Wednesday at 4:00 PM, S&P future (June 2020) closed at 2456.50 and the index closed at 2470.50 – a spread of about -14.00 points; futures closed at 2448.00 for the day; the fair value is +8.50
- Pre-NYSE session open, futures are mixed – at 8:30 AM, S&P 500 futures were up by +12.50; Dow up by +32 and NASDAQ down by -1.25
Markets Around The World
- Markets in the East closed mostly higher – Tokyo and Sydney closed down; Mumbai was closed for trading
- European markets are mostly higher – Germany and France are down
- Dollar index
- Crude Oil
- 10-yrs yield is at 0.596%, down from April 1 close of 0.635%;
- 30-years is at 1.241%, down from 1.289%
- 2-years yield is at 0.230% up from 0.211%
- The 10-Year-&-2-Year spread is at 0.366 down from 0.424
- Is at 53.59 down -3.47 from April 1 close; below 5-day SMA;
- Down from all time high of 85.47 on March 18
The trend and patterns on various time frames for S&P 500:
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Major U.S. indices closed lower on Wednesday, April 1 in mixed volume. Dow Jones Transportation Average and Russell 2000 traded in higher volume. Most indices gapped down at the open and then mostly traded lower.
The S&P 500 (-4.4%), Dow Jones Industrial Average (-4.4%), and Nasdaq Composite (-4.4%) each fell 4.4%. The Russell 2000 underperformed with a 7.1% decline.[…]
In turn, no S&P 500 sector was spared in today’s sell-off with ten sectors losing at least 3.0%, including 6.1% declines in the real estate and utilities sectors. The consumer staples sector performed relatively better with a 1.8% decline.[…]
U.S. Treasuries finished mixed with longer-dated Treasuries advancing in a safe-haven bid. The 2-yr yield increased two basis points to 0.22%, while the 10-yr yield declined six basis points to 0.64%. The U.S. Dollar Index rose 0.5% to 99.50.[…]
• The ISM Manufacturing Index for March registered a reading of 49.1% (Briefing.com consensus 43.3%), down from 50.1% in February. The dividing line between expansion and contraction is 50.0%.
o The key takeaway for some will be that the number wasn’t as bad as feared, but lost in that takeaway is the fact that the overall index was supported by a sizable uptick in the supplier deliveries index (to 65.0% from 57.3%), which reflects slower delivery times that are a byproduct of the COVID-19 response that has disrupted supply networks. Translation: the March number is not as encouraging as it seems at first blush.
• Total construction spending declined 1.3% m/m in February (Briefing.com consensus +0.5%) on the heels of an upwardly revised 2.8% increase (from +1.8%) in January. Residential spending was down 0.6% m/m while nonresidential spending declined 1.6% m/m.
o The key takeaway from the report is that it is relatively meaningless for a market that is pre-occupied with the economic view ahead due to the shutdown measures that started to hit home in March to deal with containing the spread of COVID-19.
• The ADP Employment Change report pointed to a net loss of 27,000 nonfarm payrolls in March (Briefing.com consensus -175,000) while the February reading was revised down to 179,000 from 183,000.
• The weekly MBA Mortgage Applications Index increased 15.3% following a 29.4% drop in the prior week.