Directional Bias for the Day:

• S&P Futures are higher at 9:00 AM. They have been drifting sideways to higher since 4:00 PM on Wednesday and are up more than 80 points from the lows.
• Odds are for an up day with a good chance of sideways to a down move from the pre-open level around 5980.00. Watch for a break below 5936.50 and 5906.50 for clarity.
• The notable economic data due during the day:
  • Final GDP (3.1% vs. 2.8% est.; prev. 2.8%) at 8:30 AM.
  • Unemployment Claims (220K vs. 229k est.; prev. 242K) at 8:30 AM.
  • Final GDP Price Index (1.9 vs. 1.9% est.; prev. 1.9%) at 8:30 AM.
  • Philly Fed Manufacturing Index (-16.4 vs. 2.9 est.; prev. -5.5) at 8:30 AM.
  • Existing Home Sales (4.09M est.; prev. 3.96M) at 10:00 AM.
  • CB Leading Index (-0.1% est.; prev. -0.4%) at 10:00 AM.

Key Levels:

• Critical support levels for the S&P 500 are 5867.79, 5811.69, and 5799.98.
• Critical resistance levels for the S&P 500 are 5911.79, 5932.06, and 5964.02.
• The key levels for E-mini futures are 5992.50, the high at 8:00 AM and 5936.50, the low at 1:00 AM.

Pre-Open

• On Wednesday at 4:00 PM, S&P futures (March 2025) closed at 5935.25, and the index closed at 5872.16 – a spread of about +63.00 points; the futures closed at 5940.25; the fair value is -1.50.
• Pre-NYSE session open, futures were higher – at 8:45 AM, the S&P 500 futures were up by +46.75, Dow by +341, and NASDAQ by +157.00.

Markets Around the World

• Markets in the East closed lower.
• European markets are lower.
• Currencies (Compared to two weeks ago):

• Commodities (Compared to two weeks ago):
  • Energy futures are higher.
  • Precious metals are lower.
  • Industrial metals are lower.
  • Soft commodities are mostly lower.
• Treasuries (Compared to two weeks ago)
  • The 10-year yield closed at 4.519, up +33.8 basis points from two weeks ago.
  • The 30-year is at 4.690%, up +34.4 basis points.
  • The 2-year yield is at 4.363%, up +17.5 basis points.
  • The 10-Year-&-2-Year spread is at 0.156, up from -0.007.
  • The 30-Year-&-10-Year spread is at 0.171, down from 0.165.
• VIX
  • At 20.65 @ 8:45 AM; down from the last close; above the 5-day SMA
  • Recent high = 28.32 on December 18; low = 12.89 on December 4; Sentiment: Risk-Off-Neutral

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

Previous Session

Major U.S. indices closed lower on Wednesday, December 18 in higher volume. Major indices opened flat-to-higher and then drifted higher in the early trading before moving sideways until the FOMC Statement when they nose-dived.

The dollar index and energy futures closed up; precious metals were down; most industrial metals and soft commodities closed down. The US Treasury yields jumped, and the bonds tanked. All S&P sectors closed down.

From Briefing.com

The S&P 500 slid 178 points, the Nasdaq Composite was 3.5% lower, and the Dow Jones Industrial Average closed more than 1,100 points lower, logging its tenth consecutive decline.

followed the FOMC’s decision to cut rates 25 basis points to 4.25-4.50%, as expected. It was not a unanimous vote. Cleveland Fed President Hammack dissented in favor of leaving the target range for the fed funds rate unchanged at 4.50-4.75%.

The Summary of Economic Projections showed that the median estimate for PCE inflation and core PCE inflation was increased for 2024 and 2025, but the estimate for unemployment was decreased for 2024 and 2025.

Additionally, the median estimate for the 2025 fed funds rate was bumped up to 3.9% from 3.4%, signaling an outlook for only 50-basis points of easing in 2025 versus 100-basis points when the September projection was released.

The 10-yr yield, which is most sensitive to changes in inflation, jumped 11 basis points to 4.49%. The 2-yr yield, which is most sensitive to changes in the fed funds rate, surged 11 basis points to 4.35%. 

• Nasdaq Composite: +29.2% YTD
• S&P 500: +23.1% YTD
• S&P Midcap 400: +11.9% YTD
• Russell 2000: +10.1% YTD
• Dow Jones Industrial Average: +12.3% YTD

Reviewing today’s economic data:

• Weekly MBA Mortgage Applications Index -0.7%; Prior 5.4%
• November Housing Starts 1.289 mln (Briefing.com consensus 1.347 mln); Prior was revised to 1.312 mln from 1.311 mln, November Building Permits 1.505 mln (Briefing.com consensus 1.430 mln); Prior was revised to 1.419 mln from 1.416 mln
  • The key takeaway from the report is that single-unit starts were up 6.4%, led by a bounce back in the South (+18.3%) following the hurricanes; however, single-unit permits, a leading indicator, were up just 0.1%.
• Q3 Current Account Balance -$310.9 bln (Briefing.com consensus -$283.0 bln); Prior was revised to -$275.0 bln from -$266.8 bln