Morning Notes – Wednesday, December 11, 2024

Directional Bias for the Day:

• S&P Futures are higher at 8:30 AM following the release of CPI data. They have broken above a trading range between 6052.00 and 6039.75.
• Odds are for a sideways to an up day. Watch for a break below 6039.75 for clarity.
• The notable economic data due during the day:
  • CPI m/m (0.3% vs. 0.3% est.; prev. 0.2%) at 8:30 AM.
  • Core CPI (0.3% vs. 0.3% est.; prev. 0.3%) at 8:30 AM.
  • CPI y/y (2.7% vs. 2.7% est.; prev. 2.6%) at 8:30 AM.

Key Levels:

• Critical support levels for the S&P 500 are 6029.89, 6003.98, and 5984.87.
• Critical resistance levels for the S&P 500 are 6048.63, 6065.40, and 6072.58.
• The key levels for E-mini futures are 6052.00, the high at 4:45 PM on Tuesday and 6039.75, the low at 3:30 PM on Tuesday.

Pre-Open

• On Tuesday at 4:00 PM, S&P futures (December 2024) closed at 6047.50, and the index closed at 6034.91 – a spread of about +12.50 points; the futures closed at 6046.25; the fair value is +1.25
• Pre-NYSE session open, futures were mixed – at 8:15AM, the S&P 500 futures were up by +5.75, Dow down by -15, and NASDAQ up by +42.75.

Markets Around the World

• Markets in the East closed mixed – Shanghai, Tokyo, Mumbai, and Seoul closed up; Hong Kong, Sydney, and Singapore closed down.
• European markets are mostly higher – Spain is 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 higher.
  • Soft commodities are mostly higher.
• Treasuries (Compared to two weeks ago)
  • The 10-year yield closed at 4.225, down -8.5 basis points from two weeks ago.
  • The 30-year is at 4.414%, down -6.9 basis points.
  • The 2-year yield is at 4.147%, down -11.1 basis points.
  • The 10-Year-&-2-Year spread is at 0.078, up from 0.052.
  • The 30-Year-&-10-Year spread is at 0.189, down from 0.173.
• VIX
  • At 14.34 @ 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-Off

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

Previous Session

Most major U.S. indices closed lower on Tuesday, December 10 in mostly higher volume. Dow Jones Transportation Average closed higher. Dow Jones Industrial Average traded in lower volume.

The dollar index, crude oil, and precious metals closed higher. Industrial metals closed lower, so did most of the soft commodities. The US Treasury yields were up and bonds down. All but three S&P sectors – Discretionary, Staples, and Communications – closed down.

From Briefing.com

The stock market extended this week’s losses, reflecting ongoing profit-taking after last week’s record highs and a huge run since the start of the year. The three major indices spent most of the morning near their prior closing levels before selling picked up in the afternoon.

The S&P 500 (-0.3%), Nasdaq Composite (-0.3%), and Dow Jones Industrial Average (-0.4%) settled near their worst levels of the day. Downside moves in the major indices coincided with some mega caps reversing early gains.

The 10-yr yield settled two basis points higher at 4.22% and the 2-yr yield settled two basis points higher at 4.15%.

• Nasdaq Composite: +31.2% YTD
• S&P 500: +26.5% YTD
• S&P Midcap 400: +18.4% YTD
• Russell 2000: +17.6% YTD
• Dow Jones Industrial Average: +17.4% YTD

Reviewing today’s economic data:

• November NFIB Small Business Optimism 101.7; Prior 93.7
• Q3 Productivity-Rev. 2.2% (Briefing.com consensus 2.2%); Prior 2.2%, Q3 Unit Labor Costs-Rev. 0.8% (Briefing.com consensus 1.9%); Prior 1.9%
  • The key takeaway from the report is the inflation-friendly indicator of unit labor costs rising in more modest proportions in the third quarter.