Morning Notes – Monday, November 18, 2024

Directional Bias for the Day:

• S&P Futures are a little higher at 9:00 AM. Drifting lower since 1:30 AM.
• Odds are for a sideways to a down day. Watch for a break above 5915.75 for a change of sentiments.
• No notable economic data is due during the day:

Key Levels:

• Critical support levels for the S&P 500 are 5853.01, 5811.69, and 5783.44.
• Critical resistance levels for the S&P 500 are 5886.14, 5915.32, and 5936.14.
• The key levels for E-mini futures are 5902.25, the high at 3:15 AM and 5886.50, the low at 8:15 AM.

Pre-Open

• On Friday at 4:00 PM, S&P futures (December 2024) closed at 5897.00, and the index closed at 5870.62 – a spread of about +26.25 points; the futures closed at 5896.50; the fair value is +0.50.
• Pre-NYSE session open, futures were mixed – at 8:45AM, the S&P 500 futures were up by +4.25, Dow down by -64, and NASDAQ up by +53.75.

Markets Around the World

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

• Commodities (Compared to two weeks ago):
  • Energy futures are mixed.
  • Precious metals are lower.
  • Industrial metals are lower.
  • Soft commodities are mixed.
• Treasuries (Compared to two weeks ago)
  • The 10-year yield closed at 4.444, up +4.7 basis points from two weeks ago.
  • The 30-year is at 4.619%, up +3.4 basis points.
  • The 2-year yield is at 4.331%, up +10.7 basis points.
  • The 10-Year-&-2-Year spread is at 0.113, down from 0.173.
  • The 30-Year-&-10-Year spread is at 0.175, down from 0.188.
• VIX
  • At 16.65 @ 8:45 AM; up from the last close; above the 5-day SMA
  • Recent high = 23.42 on October 31; low = 13.59 on November 14; Sentiment: Risk-Off

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

Previous Session

Most major U.S. indices closed lower Friday, November 15 in mostly higher volume. Dow Jones Transportation Average traded in lower volume.

All but three S&P sectors – Financials, Utilities, and Real Estate – closed lower.  Dollar index was up, crude oil, precious metals, and copper were down, and most other commodities were up. The US Treasury yield closed higher.

For the week, major US indexes closed lower in mixed volume. All but three S&P sectors – Energy, Financials, and Utilities – were down, Dollar was up, Nat Gas was up but most other commodities were down. US Treasury yields were up.

From Briefing.com

The stock market closed with solid losses. The S&P 500 fell nearly 80 points, or 1.3%. This decline left the index 1.5% higher since the election. 

Many stocks contributed to index losses, sinking on concerns over interest rates and speculation that the Fed may be more cautious with rate cuts than the market previously hoped. The 10-yr note yield jumped to 4.50% in response to the October Retail Sales report, which was stronger than headline numbers suggest due to upward revisions in the September data. 

• Nasdaq Composite: +24.4%
• S&P 500: +23.1%
• S&P Midcap 400: +15.3%
• Dow Jones Industrial Average: +15.3%
• Russell 2000: +13.7%

Reviewing today’s economic data:

• The New York Fed Empire State Manufacturing Survey for November checked in at 31.2 (Briefing.com consensus 3.3) following a -11.9 reading for October. A number above 0.0 is indicative of expansion. The New Orders Index surged to 28.0 from -10.2.
• Total retail sales increased 0.4% month-over-month in October (Briefing.com consensus 0.3%) following an upwardly revised 0.8% increase (from 0.4%) in September. Excluding autos, retail sales increased 0.1% month-over-month (Briefing.com consensus 0.2%) following an upwardly revised 1.0% increase (from 0.5%) in September.
• Import prices increased 0.3% month-over-month in October and were up 0.8% year-over-year. Excluding fuel, import prices were up 0.2% month-over-month and up 2.3% year-over-year. Export prices increased 0.8% month-over-month and were down 0.1% year-over-year. Excluding agricultural products, export prices jumped 0.6% month-over-month and were flat year-over-year.
• Total industrial production decreased 0.3% month-over-month in October (Briefing.com consensus -0.3%) following a downwardly revised 0.5% decline (from -0.3%) in September. The capacity utilization rate fell to 77.1% (Briefing.com consensus 77.3%) from a downwardly revised 77.4% (from 77.5%) in September. Total industrial production declined 0.3% yr/yr while the capacity utilization rate was 2.6 percentage points below its long-run average.
• September Business Inventories increased 0.1% month-over-month (Briefing.com consensus 0.2%) following a 0.3% increase in August.