Directional Bias For The Day:
- S&P Futures are higher;
- The odds are for an up day with good chance of sideways to down move from pre-open level near 2925.00; elevated volatility – watch for break below 2890.00 for change of fortune
- Key economic data due:
- NAHB Housing Index ( 35 est.; prev. 30) at 10:00 AM
Directional Bias Before Open:
- Critical support levels for S&P 500 are 2918.70, 2903.44 and 2876.48
- Critical resistance levels for S&P 500 are 2934.51, 2954.71 and 2985.93
- Key levels for E-mini futures: break above 2939.25, the high of 8:00 AM on May 12 and break below 2890.75, the low of 7:30 AM
- On Friday at 4:00 PM, S&P futures (June 2020) closed at 2858.75 and the index closed at 2863.70 – a spread of about -5.00 points; futures closed at 2846.50 for the day; the fair value is +12.25
- Pre-NYSE session open, futures are higher – at 9:00 AM, S&P 500 futures were up by +82.75; Dow by +759 and NASDAQ up +181.25
Markets Around The World
- Markets in the East closed mostly up – Mumbai was down
- European markets are higher
- Dollar index
- Crude Oil
- 10-yrs yield is at 0.680%, up from May 15 close of 0.640%;
- 30-years is at 1.385%, up from 1.319%
- 2-years yield is at 0.161% up from 0.149%
- The 10-Year-&-2-Year spread is at 0.519 up from 0.491
- Is at 28.7; down -3.02 from May 15 close; below 5-day SMA;
- Down from all time high of 85.47 on March 18; recent high 47.77 on April 21, recent low 30.54 on April 28
- Sentiment: Risk-On
The trend and patterns on various time frames for S&P 500:
|2-Hour (E-mini futures)||
|30-Minute (E-mini futures)||
|15-Minute (E-mini futures)||
Major U.S. indices closed mostly higher on Friday, May 15 in mixed volume. Dow Jones Transportation Average closed lower. Dow Jones Industrial Average and NASDAQ Composite traded in higher volume. Indices opened lower making day’s low by early-morning and then traded higher closing near the highs. Most made three-day Morning Star candlestick formation, albeit after a short decline.
For the week, major U.S. indices closed lower in mostly higher volume. DJT traded in lower volume. Most global bourses also closed lower. Sydney was up. US Dollar, crude oil and U.S. Treasuries closed up for the week.
The S&P 500 (+0.4%), Dow Jones Industrial Average (+0.3%), and Nasdaq Composite (+0.8%) ended Friday’s session modestly higher, recovering from early declines that followed more weak economic data and increased U.S.-China tensions. The Russell 2000 outperformed with a 1.6% gain after a rough week for the small-cap index.
The communication services (+1.3%), consumer discretionary (+1.1%), and materials (+1.0%) sectors led today’s gains, helping the S&P 500 rebound from an early 1.3% decline. The utilities (-1.4%) and financials (-0.7%) sectors were Friday’s laggards.[…]
U.S. Treasuries ended the week with modest losses. The 2-yr yield increased one basis point to 0.15%, and the 10-yr yield increased two basis points to 0.64%. The U.S. Dollar Index declined 0.1% to 100.38.[…]
• Total retail sales declined a record 16.4% m/m in April (Briefing.com consensus -11.9%) while retail sales, excluding autos, declined 17.2% m/m (Briefing.com consensus -8.2%).
o The key takeaway from the report is that the broad-based weakness is a representation of the adverse spending shock that resulted from shutdown measures, announced pay cuts, and the massive jump in unemployment.
• Industrial production declined 11.2% m/m in April (Briefing.com consensus -12.1%), which was the largest monthly drop in the 101-year history of the index. The capacity utilization rate fell from 73.2% to 64.9% (Briefing.com consensus 64.0%), which is 14.9 percentage points below its long-run average and a record-low in a series that dates back to 1967.
o The key takeaway from the report is that it is a reflection of how industrial production cratered amid shutdown orders designed to contain the spread of COVID-19. On a yr/yr basis, industrial production was down 15.0%.
• The University of Michigan’s Index of Consumer Sentiment rose to 73.7 in the preliminary reading for May (Briefing.com consensus 67.4) from 71.8 in April.
o The key takeaway from the report is that attitudes about current conditions improved while sentiment surrounding the outlook continued to deteriorate, pinched by concerns about financial prospects that were most notable among upper income households. That is apt to be a headwind for a pickup in consumer spending.
• The Empire State Manufacturing Survey for May checked in at -48.5 (Briefing.com consensus -58.0) following the prior month’s reading of -78.2.
• March job openings decreased to 6.191 mln from a revised 7.004 mln in February (from 6.882 mln).
• Business inventories decreased 0.2% in March, while the February reading was revised down to -0.5% from -0.4%.