Directional Bias For The Day:
- S&P Futures are higher; declining since making a high of 2806.25 of 2:30 AM to near 2775.00
- The odds are for a down to sideways day with elevated volatility – watch for break above 2794.75 for change of fortune
- Key economic data due:
- Unemployment Claims ( 5350K est.; prev. 6606K) at 8:30 AM
- Building Permits ( 1.30M est.; prev. 1.45M) at 8:30 AM
- Philly Fed Manufacturing Index ( -30.0 est.; prev. -12.7) at 8:30 AM
- Housing Starts ( 1.31M est.; prev. 1.60M) at 8:30 AM
Directional Bias Before Open:
- Critical support levels for S&P 500 are 2777.41, 2763.46 and 2731.94
- Critical resistance levels for S&P 500 are 2801.88, 2805.10 and 2832.60
- Key levels for eMini futures: break above 2806.25, the high of 2:30 AM and break below 2782.50, the low of 5:30 PM on Monday
- On Wednesday at 4:00 PM, S&P future (June 2020) closed at 2775.00 and the index closed at 2783.36 – a spread of about -8.25 points; futures closed at 2775.00 for the day; the fair value is +0.00
- Pre-NYSE session open, futures are higher – at 8:00 AM, S&P 500 futures were up by +7.75; Dow by +28 and NASDAQ by +51.50
Markets Around The World
- Markets in the East closed mixed – Shanghai, Mumbai and Singapore closed higher; Hong Kong, Tokyo, Sydney and Seoul closed lower
- European markets are mostly higher – Spain is down
- Dollar index
- Crude Oil
- 10-yrs yield closed at 0.638%, down from April 14 close of 0.752%;
- 30-years is at 1.275%, down from 1.412%
- 2-years yield is at 0.211% down from 0.215%
- The 10-Year-&-2-Year spread is at 0.427 down from 0.537
- Is at 41.36 up +0.52 from April 15 close; above 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:
|2-Hour (e-mini future)||
|30-Minute (e-mini future)||
|15-Minute (e-mini future)||
Major U.S. indices closed lower on Wednesday, April 15 in mostly lower volume. Dow Jones Transportation Average traded in higher volume. Market indices gapped down at the open and most made three-day evening star pattern. All S&P sectors closed lower. Most international exchanges also closed down.
The S&P 500 declined 2.2% on Wednesday, as the release of historically weak economic data undercut risk sentiment. The Dow Jones Industrial Average lost 1.9%, the Nasdaq Composite lost 1.4% to snap a four-session winning streak, and the Russell 2000 underperformed with a 4.3% decline.[…]
The plethora of reminders that economic conditions are woeful contributed to losses in all 11 S&P 500 sectors, but the S&P 500 remarkably still finished above Monday’s closing level. The financials sector (-4.3%) was an influential laggard following earnings reports from Bank of America (BAC 22.19, -1.54, -6.5%), Citigroup (C 42.86, -2.56, -5.6%), and Goldman Sachs (GS 178.52, +0.29, +0.2%).
The energy sector (-4.7%) declined the most, though, as the group remained pressured by lower oil prices after the EIA projected a 9.2 mb/d decline in oil demand in 2020. WTI crude futures settled just below $20.00/bbl, losing 1.3%, or $0.27, to $19.95/bbl.[…]
Longer-dated U.S. Treasuries exhibited strength in a textbook trade given the negative economic data and decline in stocks. The 2-yr yield declined two basis points to 0.20%, and the 10-yr yield declined 11 basis points to 0.64%. The U.S. Dollar Index increased 0.7% to 99.57.[…]
• Retail sales declined 8.7% m/m in March (Briefing.com consensus -10.0%) following an upwardly revised 0.4% decline (from -0.5%) in February. Excluding autos, sales declined 4.5% (Briefing.com consensus -7.6%) following an unrevised 0.4% decline in February.
o The key takeaway from the report is that it captured the impact of the COVID-19 shutdown situation, as spending in discretionary categories cratered while spending for essential items accelerated in a big way.
• Industrial production declined 5.4% m/m in March (Briefing.com consensus -3.3%) following a downwardly revised 0.5% increase (from 0.6%) in February. Total capacity utilization was 72.7% (Briefing.com consensus 74.1%) following an unrevised 77.0% in February.
o The key takeaway from the report is that it captures the severity of the shutdown situation, best reflected in the pronouncement that the downturn in industrial production was the worst since 1946.
• The New York Fed’s Empire State Manufacturing Survey plummeted 57 points to -78.2 (Briefing.com consensus -32.0).
• The NAHB Housing Market Index for April plunged to 30 (Briefing.com consensus 57) from 72 in March.
• Business inventories decreased 0.4% in February, as expected, while the January reading was revised down to -0.3% from -0.1%.
• The Mortgage Bankers Applications Index increased 7.3% week-over-week.