Morning Notes – Friday, April 21, 2023

Directional Bias For The Day:

• S&P Futures are little changed at 9:00 AM, moving up since 7:00 Am – up by more than 15 points
• The odds are for a sideways to an up day with elevated volatility – watch for a break above 4158.25 and a break below 4140.00 for clarity
• The major economic data report due during the day:
  • Flash Manufacturing PMI ( 49.0 est; prev. 49.2) at 9:45 AM
  • Flash Services PMI ( 51.5 est.; prev. 52.6) at 9:45 AM

Directional Bias Before Open:

Key Levels:

• Critical support levels for S&P 500 are 4113.20, 4099.40, and 4086.94
• Critical resistance levels for S&P 500 are 4148.57, 4162.57, and 4169.48
• The key levels for E-mini futures are a break above 4158.25, the high at 4:00 PM on April 20, and a break below 4140.00, the low at 7:00 AM

Pre-Open

• On Thursday at 4:00 PM, S&P futures (June 2023) closed at 4153.50, and the index closed at 4129.792 – a spread of about +23.75 points; the futures closed at 4152.50; the fair value is +1.00
• Pre-NYSE session open, futures were mixed – at 8:30 AM, S&P 500 futures were down by -2.00, Dow up by +19, and NASDAQ down by -31.50

Markets Around The World

• Markets in the East closed mostly lower – Mumbai and Singapore closed higher
• European markets are mixed
• Currencies (Compared to two weeks ago):

• Commodities (Compared to two weeks ago):
  • Energy futures are mixed
  • Precious metals are mixed
  • Industrial metals are higher
  • Soft commodities are mostly higher
• Treasuries (Compared to two weeks ago)
  • The 10-year yield closed at 3.532, up +24.4 basis points from two weeks ago;
  • The 30-year is at 3.743%, up +20.3 basis points;
  • The 2-year yield is at 4.140%, up +31.5 basis points;
  • The 10-Year-&-2-Year spread is at -0.608, down from -0.537
  • The 30-Year-&-10-Year spread is at 0.211, down from +0.252
• VIX
  • At 17.30 @ 8:30 AM; up from the last close; above the 5-day SMA;
  • Recent high = 25.21 on March 24; low = 16.14 on November 4, 2021
  • Sentiment: Risk-Off

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

Previous Session

Major U.S. indices closed mostly lower on Thursday, April 20, in mostly higher volume. Dow Jones Transportation Average closed higher in lower volume.

The major indices gapped down at the open but immediately moved higher until 1:30 PM, when they turned down and traded lower for the rest of the day, making new lows for the day.

From Briefing.com:

[…] The 2-yr note yield fell nine basis points to 4.17% and the 10-yr note yield fell six basis points to 3.55%. […] Nasdaq Composite: +15.2% YTD S&P 500: +7.6% YTD S&P Midcap 400: +2.9% YTD Dow Jones Industrial Average: +1.9% YTD Russell 2000: +1.6% YTD […] Initial jobless claims for the week ending April 15 increased by 5,000 to 245,000 (Briefing.com consensus 242,000) while continuing jobless claims for the week ending April 8 increased by 61,000 to 1.865 million. […] The April Philadelphia Fed Index slumped to -31.3 (Briefing.com consensus -20.0) from -23.2 in March. That is the eighth straight reading in negative territory for this manufacturing survey and the lowest reading since May 2020. The dividing line between expansion and contraction for this report is 0.0. […] Existing home sales declined 2.4% month-over-month in March to a seasonally adjusted annual rate of 4.44 million (Briefing.com consensus 4.50 million) versus a downwardly revised 4.55 million (from 4.58 million) in February. Sales were down 22.0% from the same period a year ago. […] The Leading Index was down 1.2% in March (Briefing.com consensus -0.4%) after falling a revised 0.5% (from -0.3%) in February. Weekly natural gas inventories increased by 75 bcf after increasing by 25 bcf a week ago. […] Overseas:  Europe: DAX -0.6%, FTSE +0.1%, CAC -0.1% Asia: Nikkei +0.1%, Hang Seng +0.1%, Shanghai -0.1% Commodities:  Crude Oil -2.26 @ 77.08 Nat Gas +0.02 @ 2.25 Gold +11.30 @ 2019.50 Silver -0.02 @ 25.37 Copper -0.05 @ 4.03