Morning Notes – Thursday, December 5, 2024

Directional Bias for the Day:

• S&P Futures are lower at 8:45 AM. The futures have been moving within a narrow range between 6099.25 and 6091.25.
• Odds are for a sideways to a down day. Watch for a break above 6099.25 for clarity.
• The notable economic data due during the day:
  • Challenger Job Cuts (26.8%; prev. 50.9%) at 7:30 AM.
  • Unemployment Claims (224K vs. 215K est.; prev. 215K) at 8:30 AM
  • Trade Balance (-73.8B vs. -75.2B est.; prev. -83.8B) at 8:30 AM.

Key Levels:

• Critical support levels for the S&P 500 are 6075.40, 6053.58, and 6045.48.
• Critical resistance levels for the S&P 500 are 6089.84, 6097.20, and 6107.91.
• The key levels for E-mini futures are 6099.25, the high at 3:45 PM and 6091.25, the low at 7:45 PM.

Pre-Open

• On Wednesday at 4:00 PM, S&P futures (December 2024) closed at 6099.00, and the index closed at 6086.49 – a spread of about +12.50 points; the futures closed at 6097.00; the fair value is +2.00.
• Pre-NYSE session open, futures were lower – at 8:30AM, the S&P 500 futures were down by -1.50, Dow by -25, and NASDAQ by -8.50.

Markets Around the World

• Markets in the East closed mostly higher – Hong Kong and Seoul closed down.
• European markets are mostly higher – the U.K. and Switzerland are lower.
• Currencies (Compared to two weeks ago):

• Commodities (Compared to two weeks ago):
  • Energy futures are lower.
  • Precious metals are higher.
  • Industrial metals are mostly lower.
  • Soft commodities are mixed.
• Treasuries (Compared to two weeks ago)
  • The 10-year yield closed at 4.181, down -22.8 basis points from two weeks ago.
  • The 30-year is at 4.346%, down -26.1 basis points.
  • The 2-year yield is at 4.138%, down -19.3 basis points.
  • The 10-Year-&-2-Year spread is at 0.043, down from 0.078.
  • The 30-Year-&-10-Year spread is at 0.165, down from 0.198.
• VIX
  • At 13.50 @ 8:15 AM; up from the last close; above the 5-day SMA
  • Recent high = 18.79 on November 20; low = 12.89 on December 4; Sentiment: Risk-Neutral

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

Previous Session

Most major U.S. indices closed mostly higher on Wednesday, December 4 in mostly higher volume. Dow Jones Transportation Average closed lower and Russell 2000 traded in lower volume. S&P 500, NASDAQ Composite, Dow Jones Industrial Average, and FT Wilshire 5000 Index made all-time intraday and closing highs.

All but four S&P sectors – Discretionary, Industrials, Technology, and Communications – closed lower. Dollar index and crude oil closed lower, precious metals were up, and Industrial metals and the soft commodities were mixed. The US Treasury yields closed down and the bonds up.

From Briefing.com

The S&P 500 advanced 36 points to a fresh record high, the Nasdaq Composite jumped 1.3% to a new all-time high, and the Dow Jones Industrial Average closed above 45,000 for the first time. 

The 10-yr yield dropped four basis points to 4.18% and the 2-yr yield dropped five basis points to 4.12%.

[…]

• Nasdaq Composite: +31.5%
• S&P 500: +27.6%
• S&P Midcap 400: +20.7%
• Russell 2000: +19.7%
• Dow Jones Industrial Average: +19.4%

Reviewing today’s economic data:

• Weekly MBA Mortgage Applications Index 2.8% vs Briefing.com consensus of ; Prior was revised to 6.3% from
• November ADP Employment Change 146K (Briefing.com consensus 170K); Prior was revised to 184K from 233K
• November S&P Global US Services PMI – Final 56.1; Prior 55.0
• November ISM Non-Manufacturing Index 52.1% (Briefing.com consensus 55.5%); Prior 56.0%
  • The key takeaway from the report is that tariff concerns were mentioned often among respondents considering their outlooks.
• October Factory Orders 0.2%; Prior was revised to -0.2% from -0.5%
  • The key takeaway from the report is that factory orders picked up following declines in the previous two months.