Morning Notes – Friday, April 14, 2023

Directional Bias For The Day:

• S&P Futures are lower at 9:00 AM – moving sideways to down since 2:00 PM on Thursday
• The odds are for a sideways to down day with elevated volatility – watch for a break above 4177.50 and a break below 4161.75 for clarity
• The major economic data report is due during the day:
  • Retail Sales ( -1.0% vs. -0.4% est.; prev. -0.2%) at 8:30 AM
  • Core Retail Sales ( -0.8% vs. -0.4% est.; prev. -0.1%) at 8:30 AM
  • Import Prices ( -0.6% vs. -0.1% est.; prev. -0.2%) at 8:30 AM
  • Capacity Utilization ( 79.8% vs. 79.1% est.; prev. 78.0% ) at 9:15 AM
  • Industrial Production ( 0.4% vs. 0.3% est.; prev. 0.2%) at 9:15 AM
  • Prelim UoM Consumer Sentiment ( 62.0 est.; prev. 62.0) at 10:00 AM
  • Prelim UoM Inflation Expectations ( prev. 3.6%) at 10:00 AM
  • Business Inventories ( 0.2% est.; prev. -0.1%) at 10:00 AM

Directional Bias Before Open:

Key Levels:

• Critical support levels for S&P 500 are 4141.74, 4130.07, and 4123.46
• Critical resistance levels for S&P 500 are 4150.26, 4159.77, and 4176.54
• The key levels for E-mini futures are a break above 4177.50, the high at 8:30 AM, and a break below 4161.75, the low at 6:15 AM

Pre-Open

• On Thursday at 4:00 PM, S&P futures (June 2023) closed at 4173.25, and the index closed at 4146.22 – a spread of about +27.00 points; the futures closed at 4172.75; the fair value is +0.50
• Pre-NYSE session open, futures were lower – at 9:00 AM, S&P 500 futures were down by -6.00, Dow down by -7, and NASDAQ by -84.00

Markets Around The World

• Markets in the East closed higher – Mumbai was closed for trading
• European markets are higher
• Currencies (Compared to two weeks ago):

• Commodities (Compared to two weeks ago):
  • Energy futures are mixed
  • Precious metals are higher
  • Industrial metals are higher
  • Soft commodities are mostly higher
• Treasuries (Compared to two weeks ago)
  • The 10-year yield closed at 3.513, down -3.8 basis points from two weeks ago;
  • The 30-year is at 3.737%, down -0.9 basis points;
  • The 2-year yield is at 3.983%, down -15.1 basis points;
  • The 10-Year-&-2-Year spread is at -0.470, up from -0.583
  • The 30-Year-&-10-Year spread is at 0.224, up from +0.195
• VIX
  • At 17.86 @ 8:30 AM; up from the last close; above the 5-day SMA;
  • Recent high = 25.21 on March 24; low = 17.06 on February 2
  • Sentiment: Risk-Off

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

Previous Session

Major U.S. indices closed mostly higher on Thursday, April 13, in mostly lower volume. The Dow Jones Transportation Average closed lower, and Dow Jones Industrial Average traded in higher volume.

The major indices opened up and then gradually traded higher for the rest fo the day.

From Briefing.com:

[…] After some lateral movement in the early going, the major indices spent most of the session in a steady climb, closing near their best levels of the day. The S&P 500 hit 4,150 at its high of the day, marking its best level since February 15. […] The communication services (+2.3%), consumer discretionary (+2.3%), and information technology (+2.0%) sectors were the best performers by a wide margin. The next best performer was health care with a 1.2% gain. Only one of the 11 sectors logged a loss, real estate (-0.4%), but utilities (flat) and industrials (+0.4%) were also notable laggards today. […] The 2-yr note yield, which hit 3.90% this morning, settled the session up two basis points to 3.99%. The 10-yr note yield, at 3.37% after the release, rose three basis points to 3.45%. […] Nasdaq Composite: +16.2% YTD S&P 500: +8.0% YTD S&P Midcap 400: +3.0% YTD Dow Jones Industrial Average: +2.7% YTD Russell 2000: +2.0% YTD […] The Producer Price Index for final demand declined 0.5% month-over-month in March (Briefing.com consensus +0.1%) following an upwardly revised 0.0% reading (from -0.1%) in February. Excluding food and energy, the index for final demand declined 0.1% month-over-month (Briefing.com consensus +0.2%) following an upwardly revised 0.2% increase (from 0.0%) in February. On a year-over-year basis, the index for final demand was up 2.7% versus 4.9% in February. Excluding food and energy, the index for final demand was up 3.4% versus 4.8% in February. […] Initial claims for the week ending April 8 increased by 11,000 to 239,000 (Briefing.com consensus 236,000) and continuing claims for the week ending April 1 decreased by 13,000 to 1.810 million. […] Weekly EIA Natural Gas Inventories showed a build of 25 bcf versus a draw of 23 bcf last week. […] Overseas:  Europe: DAX +0.2%, FTSE +0.2%, CAC +1.1% Asia: Nikkei +0.3%, Hang Seng +0.2%, Shanghai -0.3% Commodities:  Crude Oil -1.08 @ 82.14 Nat Gas -0.07 @ 2.02 Gold +33.20 @ 2058.00 Silver +0.54 @ 26.03 Copper +0.04 @ 4.14