Directional Bias For The Day:
- S&P Futures are higher before the open; moving up since 3:15 AM from 2903.75
- The odds are for a sideways day with elevated volatility – watch for break above 2945.75 and below 2927.50 for more clarity
- No key economic data due:
Directional Bias Before Open:
- Critical support levels for S&P 500 are 2938.57, 2922.35 and 2913.86
- Critical resistance levels for S&P 500 are 2959.26, 2969.49 and 2978.50
- Key levels for E-mini futures: break above 2945.25, the high of 8:00 PM and break below 2927.50, the low of 7:30 AM
- On Thursday at 4:00 PM, S&P futures (June 2020) closed at 2944.00 and the index closed at 2948.51 – a spread of about -5.50 points; futures closed at 2937.00 for the day; the fair value is +7.00
- Pre-NYSE session open, futures are higher – at 9:00 AM, S&P 500 futures were up by +5.00; Dow down by +64 and NASDAQ by +9.50
Markets Around The World
- Markets in the East closed lower
- European markets are mostly mixed – Germany, France, Spain and Italy are up; U.K., Switzerland and STOXX 600 are down
- Dollar index
- Crude Oil
- 10-yrs yield is at 0.669%, down from May 21 close of 0.677%;
- 30-years is at 1.387%, down from 1.399%
- 2-years yield is at 0.166% down from 0.158%
- The 10-Year-&-2-Year spread is at 0.503 down from 0.519
- Is at 29.395; down -0.14 from May 21 close; at/above 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-Neutral
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 lower on Thursday, May 21 in mostly lower volume. Russell 2000 closed up and NASDAQ Composite traded in higher volume. NASDAQ also made a Bearish Engulfing candle.Most indices made small candles. All but two – Consumer Discretionary and Industrials – S&P sectors closed lower.
The S&P 500 declined 0.8% on Thursday, failing to overcome weak economic data and a fresh increase in U.S.-China tensions. The Dow Jones Industrial Average lost 0.4%, and the Nasdaq Composite lost 1.0%. The small-cap Russell 2000, however, eked out a 0.1% gain.
Losses broadened out to ten of the 11 S&P 500 sectors, including energy (-1.5%) and information technology (-1.4%). The industrials sector (+0.2%) was the lone sector to close in positive territory, thanks to shares of Boeing (BA 139.00, +5.68, +4.3%) after the stock was initiated with an Outperform rating at RBC Capital Mkts.[…]
U.S. Treasuries finished the session little changed. The 2-yr yield declined one basis point to 0.15%, and the 10-yr yield was unchanged at 0.68%. The U.S. Dollar Index increased 0.3% to 99.44. WTI crude increased another 1.3%, or $0.45, to $33.96/bbl.[…]
• Initial claims for the week ending May 16 decreased by 249,000 to 2.438 million (Briefing.com consensus 2.400 million), bringing the 9-week total to 38.636 million. Continuing claims for the week ending May 9 surged by 2,525,000 to 25.073 million, which is an all-time high.
o The key takeaway from the report in the market’s mind is that the pace of initial claims is decelerating; however, the real-world takeaway is that the economic damage runs deep as initial claims and continuing claims keep piling up.
• Existing home sales plummeted 17.8% m/m in April to a seasonally adjusted annual rate of 4.33 million (Briefing.com consensus 4.32 million). That is the lowest level of home sales since July 2010.
o The key takeaway from the report is that sellers pulled listings amid the COVID-related downturn in demand, yet the inventory constraint translated into higher prices for buyers remaining in the market.
• The Conference Board’s Leading Economic Index decreased 4.4% m/m in April (Briefing.com consensus -5.3%) following a downwardly revised (and record) 7.4% decline (from -6.7%) in March.
o The key takeaway from the report is the Conference Board’s conclusion that the breadth and depth of the decline in the index does not imply a fast rebound for the economy at large, even with the imminent reopening of some sectors.
• The Philadelphia Fed Index for May increased to -43.1 (Briefing.com consensus -43.0) from the -56.6 reading in April.