Directional Bias For The Day:
- S&P Futures are higher
- The odds are for an up day with elevated volatility – watch for break below 3130.00 for change of fortune
- Key economic data due:
- Non-Farm Employment Change (2509K vs. -7750K est.; prev. -20537K) at 8:30 AM
- Average Hourly Earnings (-1.0% vs. 1.0% est.; prev. 4.7) at 8:30 AM
- Unemployment Rate (13.3% vs. 19.4% est.; prev. 14.7%) at 8:30 AM
- Consumer Credit ( -20.0B est.; prev. -12.0B) at 3:00 PM
- ECB Press Conference
Directional Bias Before Open:
- Critical support levels for S&P 500 are 3130.94, 3115.83 and 3099.15
- Critical resistance levels for S&P 500 are 3182.51, 3198.30 and 3213.73
- Key levels for E-mini futures: break above 3112.75, the high of 7:30 AM and break below 3086.00, the low of 6:45 AM on Wednesday
- On Thursday at 4:00 PM, S&P futures (June 2020) closed at 3110.00 and the index closed at 3112.35 – a spread of about -2.25 points; futures closed at 3110.50 for the day; the fair value is -0.50
- Pre-NYSE session open, futures are higher – at 8:45 AM, S&P 500 futures were up by +47.00; Dow by +600 and NASDAQ by +24.00
Markets Around The World
- Markets in the East closed higher
- European markets are higher
- Dollar index
- Crude Oil
- 10-yrs yield is at 0.754%, down from June 3 close of 0.761%;
- 30-years is at 1.544%, down from 1.551%
- 2-years yield is at 0.188% down from 0.200%
- The 10-Year-&-2-Year spread is at 0.566 up from 0.561
- Is at 24.97; down -0.84 from June 4 close; below 5-day SMA;
- Recent high 39.28 on May 14; low 24.92 on March 3
- 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 lower on Thursday, June 4 in mixed volume. Dow Jones Industrial Average and Dow Jones Transportation Average closed higher. DJT and NASDAQ Composite traded in higher volume. Most indices made Doji or similar indecisive candle. Four S&P sectors – Energy, Materials, Industrials and Financials closed up.
The S&P 500 declined 0.3% on Thursday in a mixed session to snap a four-session winning streak. The Dow Jones Industrial Average eked out a 0.1% gain, the Nasdaq Composite declined 0.7%, and the Russell 2000 closed flat.
Early in the session, the S&P 500 overcame a negative start, but failed to break above the 3130 level, which was yesterday’s high and the high from March 4. The Nasdaq 100 (-0.8%) even set a new all-time high before retracing gains alongside the broader market. Technical factors, then, appeared to have a role in calming this market down.
The information technology (-0.8%) and health care (-0.8%) sectors were influential laggards, but the rate-sensitive real estate (-1.8%) and utilities (-2.0%) sectors declined the most amid an increase in longer-dated Treasury yields. The 10-yr yield rose six basis points to 0.82%, while the 2-yr yield was flat at 0.19%.[…]
• Initial claims for the week ending May 30 decreased by 249,000 to 1.877 million (Briefing.com consensus 1.800 million). Continuing claims for the week ending May 23 increased by 649,000 to 21.487 million.
o The key takeaway from the report is twofold: (1) initial claims are still extremely high and (2) continuing claims didn’t continue to improve, denoting some slowness in rehiring activity.
• A revision reported by the BLS indicated nonfarm business sector labor productivity decreased 0.9% (Briefing.com consensus -2.6%) in the first quarter versus an originally reported decrease of 2.5%. Unit labor costs, meanwhile, increased 5.1% versus an originally reported 4.8% increase.
o The key takeaway from the report is that productivity was better than expected in the first quarter, but it was still weak all the same.
• The U.S. trade deficit widened to $49.4 billion in April (Briefing.com consensus -$49.8 billion) from an upwardly revised $42.3 billion (from -$44.4 billion) in March.
o The key takeaway from the report is that it was accented by a sizable decline in both exports and imports, which was a byproduct of reduced demand due to shutdown measures implemented around the globe to help contain the spread of COVID-19.