E-mini S&P 500 (December): Settled at 3287.25, up 49.25 on Friday and down 29.00 on the week
E-mini Nasdaq-100 (December): Settled at 11,136.50, up 244.75 on Friday and 209.50 on the week
We have another strong Sunday night session on our hands and U.S. benchmarks are picking up right where they left off Friday. We spoke of a buying opportunity Thursday and turned cautiously bullish in bias here Friday. The shift comes after we called a near-term top at the onset of September and went neutral last Monday when our S&P 500 index downside target was achieved. Ultimately, we have gone full circle and find the path of least resistance higher.
Equity markets surged higher around 5:00 a.m. CT. Although there doesn’t seem to be a single news event, a slew of upgrades and comments from Senator Ted Cruz supporting fiscal measures may have done the trick as the House looks to pass watered down measures this week. There’s still great divide in Washington, too much to detail here ahead of the bell, but fiscal measures in the $2 trillion ballpark are the wild card that could lift stocks steadily ahead of the election. Side note, among those upgrades was Chevron; our portfolio management company Blue Line Capital began allocating to energy late last week, with Chevron as a favorite, and finds good long-term value here.
The economic calendar is jam-packed this week, but today is quiet. Tomorrow evening we get the first of 3 presidential debates and the week culminates with Nonfarm Payrolls on Friday. European Central Bank (ECB) heads are talking today and there seems to be division developing on how to support the economy. ECB President Christine Lagarde spoke this morning. Tomorrow, we look to Fed speakers and Manufacturing data from China.
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