U.S. Benchmarks Are Reaching For Records After Monday's Whipsaw

January 26, 2021 10:30 AM
Equity Index futures

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Monday's Close

E-mini S&P 500 Futures (March): Settled at 3848.50, up 14.25

E-mini Nasdaq-100 Futures (March): Settled at 13,475.50, up 114.00

U.S. benchmarks are reaching for fresh records after yesterday’s whipsaw held a strong level of technical support in the S&P, which we’ve been pointing to, at 3790.50. Frothy conditions can create air pockets driven by news, technical selling, or both, and yesterday was exactly that. After the S&P stalled at its intraday record high, Senator Chuck Schumer commented that a new Covid-19 relief package isn’t likely until mid-March when the current unemployment benefits run out and Congress is forced to agree on legislation. 

Remember, they’re busy impeaching former President Trump, who’s already long gone. We’ve been hearing of mounting opposition to the $1.9 trillion price tag and the exorbitant measures within it, but the market, amid a clear path of resistance higher, only focuses on what it wants. Yesterday’s comments from Schumer came as a surprise during a technical retreat and, therefore, such an air pocket was born.

We’re diving into the heart of earnings season and GE is the big mover this morning, gaining as much as 10%. Although it missed estimates, an upbeat outlook and strong cash flow has found tailwinds from an already positive sentiment. Johnson & Johnson is up about 2% ahead of the bell after an earnings beat is coupled with anticipated vaccine news. 3M, Raytheon, and D.R. Horton are also among a deluge of reports and all were trading in the green ahead of the bell. Later on, after the close, we look to Microsoft, AMD, and Starbucks.

On the economic calendar, we saw Case Shiller Home Price Index for November at 8:00 a.m. CT. This read has handedly topped expectations for 4 months running. Inflation anyone? January Consumer Confidence was due at 9:00 a.m. CT, along with Richmond Fed Manufacturing. There’s also a 5-year Note auction at noon CT. Tomorrow is Fed Day.

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