Morning Notes – Monday April 1, 2019

Directional Bias For The Day:

• S&P Futures are higher; moving sideways since 8:15 PM on Sunday
• Odds are for an up day, with high probability of sideways move from pre-NYSE levels – watch for break below 2854.50 for change of fortune
• Key economic data due:
  • Core Retail Sales ( -0.4% vs. 0.4% est.; prev. 0.9%) at 8:30 AM
  • Retail Sales ( -0.2% vs. 0.3% est.; prev. 0.2%) at 8:30 AM
  • ISM Manufacturing ( prev. 54.2 ) at 10:00 AM

Markets Around The World

• Markets in the East closed higher
• European markets are up
• Currencies:
  

  Up	Down
  EUR/USD GBP/USD USD/JPY AUD/USD NZD/USD USD/CAD USD/INR	Dollar index USD/CHF

• Commodities:
  

  Up	Down
  Crude Oil NatGas Gold Silver Copper Platinum Palladium Cocoa	Sugar Cotton Coffee

• Bonds
  • 10-yrs yield is at 2.442%, up from March 29 close of 2.414%;
  • 30-years is at 2.848%, up from 2.822%
  • 2-years yield is at 2.290%, up from 2.258%
  • The 10-Year-&-2-Year spread is at 0.152, down from 0.156

Key Levels:

• Critical support levels for S&P 500 are 2836.03 2828.08 and 2819.23
• Critical resistance levels for S&P 500 are 2854.87, 2860.31 and 2874.02
• Key levels for eMini futures: break above 2861.25, the high of 4:30 AM and break below 2854.50, the low of 6:30 AM

Pre-Open

• On Friday, at 4:00 PM, S&P future (June contract) closed at 2838.00 and the index closed at 2834.40 – a spread of about +3.50 points; futures closed at 2837.75 for the day; the fair value is +0.25
• Pre-NYSE session open, futures are higher – at 9:00 AM, S&P 500 futures were up by +20.25; Dow by +212 and NASDAQ by +68.75

Directional Bias Before Open

• Weekly: Uptrend
• Daily: Uptrend
• 120-Min: Up-Side
• 30-Min: Up-Side
• 15-Min: Side
• 6-Min: Side

The trend and patterns on various time frames for S&P 500:

Previous Session

Major U.S. indices closed higher on Friday, March 29 in higher volume. Indices gapped up at the open and maintained the gap despite some early decline. Most closed with almost no upper shadows and relatively small lower shadows.

From Briefing.com:

The S&P 500 gained 0.7% on Friday, capping its best quarter since 2009 amid a risk-on sentiment and continued trade optimism. Friday’s advance propped the S&P 500 to a gain of 13.1% this quarter.

The Dow Jones Industrial Average (+0.8%), the Nasdaq Composite (+0.8%), and the Russell 2000 (+0.3%) extended their quarterly gains to 11.2%, 16.5%, and 14.2%, respectively.

The S&P 500 health care (+1.2%), industrials (+1.0%), and information technology (+1.0%) sectors outperformed the broader market. Conversely, the energy (-0.2%) and real estate (-0.1%) sectors were the lone groups to finish with losses.

[…]

U.S. Treasuries ended the week on a lower note, sending yields higher across the curve. The 2-yr yield increased four basis points to 2.27%, and the 10-yr yield increased three basis points to 2.41%. The U.S. Dollar Index increased 0.1% to 97.27.

[…]

• Personal income increased 0.2% in February (Briefing.com consensus 0.3%) after decreasing 0.1% in January. Personal spending increased 0.1% in January (Briefing.com consensus 0.3%) after decreasing a revised 0.6% (from -0.5%) in December.
• The PCE Price Index for January decreased 0.1% while the core PCE Price Index, which excludes food and energy, increased 0.1% (Briefing.com consensus 0.2%). On a year-over-year basis, the PCE Price Index is up 1.4%, down from 1.8% in December, and the core PCE Price Index is up 1.8%, down from 2.0% in December.
o The key takeaway from the report is that the core PCE Price Index slipped below the Fed’s longer-run inflation target of 2.0%, which can be used by the FOMC as a reason for maintaining its newfound patient stance.
• New home sales increased 4.9% m/m in February to a seasonally adjusted annual rate of 667,000 (Briefing.com consensus 618,000) from an upwardly revised 636,000 (from 607,000) in January. On a y/y basis, new home sales were up 0.6%.
o The key takeaway from the report is that a recent decrease in prices appears to have invited more sales activity.
• The final University of Michigan Index of Consumer Sentiment for March increased to 98.4 (Briefing.com consensus 97.8) from 97.8 in the preliminary reading.
o The key takeaway from the report is that a large share of households reported rising incomes and lower expected year-ahead inflation rates, leading to increased real income expectations.
• The Chicago PMI increased to 58.7 in March from 64.7 in February.
Looking ahead, investors will receive Retail Sales for February, the ISM Manufacturing Index for March, Business Inventories for January, Construction Spending for February, and auto and truck sales throughout the day on Monday.

• S&P 500 Sectors