E-mini S&P Futures (December)
Yesterday’s close: Settled at 3001.50, down 7.00
Fundamentals: After opening lower Sunday night, U.S benchmarks are holding at least 1% from their near record-setting swing highs last week. Geopolitical uncertainties and dissipating odds for a Fed rate cut tomorrow overshadow the recent run. Saudi Arabia is expected to hold a press conference at 8:15 am CT to discuss the damage and timeline to restore production. Early estimates say full production could be out for months. Although the attacks have lifted energy stocks, it is weighing on global sentiment as the world awaits retaliatory measures aimed at Iran, the suspected culprit. On the other side of the coin, Crude Oil is 15% higher from Friday’s close and this is lifting inflation expectations which in turn could handcuff the Fed’s path to easing. After stronger than expected CPI data last week coupled with ECB President Mario Draghi’s emphasis on the need for fiscal policy while tiering negative rates for banks, we have seen the Treasury complex quickly price in the odds the Fed won’t cut tomorrow. These odds have mounted to 35%.
German ZEW Economic Sentiment came in much less bad than expected this morning at -22.4 versus -37.4. U.S Industrial Production is due at 8:15 am CT.
Technicals: Price action is consolidating below Friday’s settlement in each the S&P and NQ. This level will continue to act as major three-star resistance in the December contract at 3008.50 in the S&P and 7908.25 in the NQ; a close above here will neutralize the near-term wave of weakness. Our pivot levels are our momentum indicators and come in at 3000 in the S&P and 7870 in the NQ; sustained price action above or below here through the bell will work to give an intraday edge. Some of the worst fundamental risks due to the Saudi attacks seem to be abated and have not triggered additional technical damage, however, a move below 2983.75 in the S&P and 7798.25-7805 in the NQ which align with yesterday’s low would encourage additional selling ahead of tomorrow’s Fed meeting.
Resistance: 3008.50***, 3013.75*, 3027.25-3032.50***, 3044-3057.75***
Support: 2993**, 2983.50**, 2975***, 2957.25-2958.75**, 2938.50-2943.75***
Resistance: 7908.25***, 7960.25-7963.25***, 8014.50-8037***, 8072***
Support: 7798.25-7805**, 7739-7761.50***, 7687**, 7580.75-7612.50***