Directional Bias for the Day:

• S&P Futures are lower at 9:00 AM. The futures have been moving sideways between 6105.50 and 6088.50.
• Odds are for a sideways to a down day. Watch for a break above 6105.50 for clarity.
• The notable economic data due during the day:
  • Final Wholesale Inventories (0.2% est.; prev. 0.2%) at 10:00 AM.

Key Levels:

• Critical support levels for the S&P 500 are 6072.90, 6061.06, and 6045.48.
• Critical resistance levels for the S&P 500 are 6100.17, 6110.06, and 6120.16.
• The key levels for E-mini futures are 6105.75, the high at 3:00 AM and 6088.50, the low at 6:30 AM.

Pre-Open

• On Friday at 4:00 PM, S&P futures (December 2024) closed at 6098.50, and the index closed at 6090.27 – a spread of about +7.25 points; the futures closed at 6099.00; the fair value is -0.50.
• Pre-NYSE session open, futures were mixed – at 9:00AM, the S&P 500 futures were down by -2.50, Dow up by +46, and NASDAQ down by -39.25.

Markets Around the World

• Markets in the East closed mixed – Shanghai, Mumbai, Seoul, and Singapore closed lower; Hong Kong, Tokyo, and Sydney closed up.
• European markets are mostly higher – Italy and Switzerland are lower.
• Currencies (Compared to two weeks ago):

• Commodities (Compared to two weeks ago):
  • Energy futures are lower.
  • Precious metals are mixed.
  • Industrial metals are mostly higher.
  • Soft commodities are mostly higher.
• Treasuries (Compared to two weeks ago)
  • The 10-year yield closed at 4.170, down -24.1 basis points from two weeks ago.
  • The 30-year is at 4.340%, down -24.4 basis points.
  • The 2-year yield is at 4.112%, down -27.2 basis points.
  • The 10-Year-&-2-Year spread is at 0.058, down from 0.027.
  • The 30-Year-&-10-Year spread is at 0.170, down from 0.173.
• VIX
  • At 13.41 @ 9:00 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-Off

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

Previous Session

Most major U.S. indices closed mixed on Friday, December 6 in mostly higher volume. Dow Jones Industrial Average, Dow Jones Transportation Average, and NYSE Composite closed lower. Transports traded in lower volume. S&P 500, NASDAQ Composite, and FT Wilshire 5000 Index made all-time intraday and closing highs.

For the week, the US indices closed mixed. Dow Jones Industrial Average, Dow Jones Transportation Average, NYSE Composite, and Russell 200 closed lower. All but three S&P sectors – Discretionary, Technology, and Communications – Energy closed lower for the week. The dollar index up, crude oil closed down, and metals closed mixed. The US Treasury yields closed down and the bonds up.

From Briefing.com

Today’s trading was a tough slog. The major indices held to tight trading ranges, unable to achieve escape velocity in either direction as both buyers and sellers lacked conviction following today’s open. Still, there was enough interest in the mega-cap stocks and enough relief surrounding the November employment report to keep the stock market in relatively good form.

The 2-yr note yield settled the day down five basis points at 4.10% and the 10-yr note yield dropped three basis points to 4.15%.

[…]

• Nasdaq Composite: +32.3% YTD
• S&P 500: +27.7% YTD
• S&P Midcap 400: +19.8% YTD
• Russell 2000: +18.9% YTD

Reviewing today’s economic data:

• November nonfarm payrolls increased by 227,000 (Briefing.com consensus 200,000). November private sector payrolls increased by 194,000 (Briefing.com consensus 200,000). November unemployment rate was 4.2% (Briefing.com consensus 4.2%), versus 4.1% in October. November average hourly earnings were up 0.4% (Briefing.com consensus 0.3%) versus 0.4% in October.
  • The key takeaway from the report is that it has satisfied the market’s December rate cut curiosity in the sense that it gives the Fed cover, absent what we may see in next week’s CPI and PPI reports, to cut the target range for the fed funds rate by another 25 basis points at the December FOMC meeting.
• The preliminary University of Michigan Index of Consumer Sentiment for December increased to 74.0 (Briefing.com consensus 73.5) from the final reading of 71.8 for November. In the same period a year ago, the index stood at 69.7.
  • The key takeaway from the report is the understanding that consumers were targeting the purchase of durables now to avoid what they think will be higher prices in the future.
• Consumer credit increased by $19.2 billion in October (Briefing.com consensus $10.5 billion) after increasing a downwardly revised $3.2 billion (from $6.0 billion) in September.
  • The key takeaway from the report is that the expansion of consumer credit was driven by revolving credit, showing a propensity by consumers to use credit for their spending activity.