Last Week's Close
E-mini S&P 500 (June): Settled at 4111.50, down 11.50
E-mini Nasdaq-100 (June): Settled at 13,233.50, up 21.50
Despite a highly volatile session yesterday, U.S. benchmarks finished little changed. The bulls have, once again, so far, proven to be resilient, this time through a pre-FOMC Minute’s air pocket. The committee noted the economy was still far from their goals, but has become open to discussing a taper of bond purchases as early as their next meeting.
This narrative is well within the range of expectations and, although the U.S. Dollar and yields strengthened, the S&P finished 1.3% from its session low, a higher low than that from last week. In fact, all 4 major U.S. benchmarks set a higher low than last week. We’ve been steadfast in our caution of late, and there’s certainly still unfinished business at 4010-4020, but our bias has turned a corner per our discussion in yesterday’s Midday Market Minute.
Today’s economic calendar brought weekly Jobless Claims and Philly Fed Manufacturing at 7:30 a.m. CT, 2 economic indicators that have steadily improved in recent weeks and months. Both Initial and Continuous Claims are expected to hit fresh pandemic lows and Philly Fed Manufacturing is expected to recede slightly from 2 of the hottest reads since 1973. We also look to a 10-year TIPS auction at noon CT.
Equities aren’t the only asset class experiencing wild swings. Extreme volatility in crypto and energy are in the spotlight today, after Bitcoin lost as much as 30% before rebounding and crude oil is still down more than 4% this week. Each provides a tail risk, and if not for the asset itself, for what such price action is telling us.
For crypto, is this the beginning of less risk taking broadly? For energy, would this be the early signs of a stalling global economic rebound and mounting Covid-19 fears in India and Southeast Asia? For now, we don’t share such concerns— we bought both Bitcoin and crude oil yesterday— but we must stay vigilant.
Of course, there are idiosyncratic risks that pose the same rippling effect; China’s clampdown on crypto sparked the selling and officials inching towards a Nuclear Deal with Iran has weighed on crude oil.
Chief Market Strategist Phillip Streible joined BNN Bloomberg yesterday to discuss energy, crypto, and the Fed.
Interested in our technical perspective? Please sign up to have Blue Line Futures technical outlook, actionable bias, and proprietary levels emailed to you each day.