Directional Bias For The Day:
- S&P Futures are higher;
- The odds are for a sideways to an up day – watch for break below 3271.75 for change of fortune
- No key economic data due:
Directional Bias Before Open:
- Critical support levels for S&P 500 are 3260.86, 3251.95 and 3238.35
- Critical resistance levels for S&P 500 are 3277.58, 3282.99 and 3291.86
- Key levels for eMini futures: break above 3278.25, the high of 5:00 AM and break below 3271.25, the low of 7:00 AM
- On Friday, at 4:00 PM, S&P future (March 2020) closed at 3265.75 and the index closed at 3265.35 – a spread of about +0.55 points; futures closed at 3264.75 for the day; the fair value is +1.00
- Pre-NYSE session open, futures are higher – at 8:30 AM, S&P 500 futures were up by +11.50; Dow by +106 and NASDAQ by +41.50
Markets Around The World
- Markets in the East closed mostly up – Sydney and Singapore were down; Tokyo was closed
- European markets are mostly down – U.K. and France are higher
- Dollar index
- Crude Oil
- 10-yrs yield closed at 1.841%, down from January 9 close of 1.858%;
- 30-years is at 2.304%, down from 2.330%
- 2-years yield is at 1.576%, down from 1.584%
- The 10-Year-&-2-Year spread is at 0.265 down from 0.274
- Is at 12.71 up from January 10 close of 12.56; below 5-day SMA
- Recent high was 16.39 on January 6; recent low was 11.72 on December 26
The trend and patterns on various time frames for S&P 500:
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|30-Minute (e-mini future)||
|15-Minute (e-mini future)||
Major U.S. indices closed lower on Friday, January 10 in mixed volume. Dow Jnes Industrial Average and NASDAQ Composite traded in lower volume. Most major indices made bearish engulfing and are showing potential stochastic bearish divergence. continue to breakout from few day’s consolidation.
For the week, major indices advanced, except Russell 2000, in higher volume. Four S&P sectors – Energy, Materials, Industrials and Finance closed down for the week.
The stock market hit new highs on Friday but succumbed to profit taking late in the session, as the December employment report failed to generate much excitement. The Dow Jones Industrial Average (-0.5%) hit 29,000 for the first time early in the session before finishing slightly lower with the S&P 500 (-0.3%), Nasdaq Composite (-0.5%), and Russell 2000 (-0.4%).
The S&P 500 financials (-0.8%), industrials (-0.7%), energy (-0.6%), and consumer discretionary (-0.5%) sectors were today’s laggards.
The defensive-oriented real estate (+1.0%), utilities (+0.2%), and health care (+0.04%) sector finished higher.
U.S. Treasuries ended the session on a higher note as part of a defensive-oriented trade. The 2-yr yield declined one basis point to 1.56%, and the 10-yr yield declined three basis points to 1.83%. The U.S. Dollar Index declined 0.1% to 97.36. WTI crude fell 0.9%, or $0.55, to $58.99/bbl.
• December nonfarm payrolls increased by 145,000 (Briefing.com consensus 160,000), private sector payrolls increased by 139,000 (Briefing.com consensus 157,000), the unemployment rate was 3.5% (Briefing.com consensus 3.5%), and average hourly earnings were up 0.1% (Briefing.com consensus +0.3%).
o The key takeaway from the report, which included updates to the seasonal adjustment factors for the labor force series derived from the household survey, was that average hourly earnings and the average workweek were both weaker than expected. That may temper any inflation concerns, but at the same time it is apt to temper consumer spending activity and overall GDP growth expectations for the fourth quarter.
• Wholesale inventories decreased 0.1% m/m in November (Briefing.com consensus +0.2%) after increasing 0.1% in October. Wholesale sales surged 1.5% after declining 0.9% in October.
o The key takeaway from the report is that sales activity was strong in November, but it will still prove difficult for wholesalers to gain pricing power given that inventory growth remains well ahead of sales growth on a yr/yr basis.