Equity markets are bit subdued this morning. Price action struggled to hold ground near major three-star resistance into yesterday afternoon and retreated 0.75% from the 2741.25 high. Overseas markets are very mixed this morning but not far from unchanged. The heavy slate of data has left much to be desired; German GDP and Sentiment missed, as did Chinese Fixed Asset Investment, British jobs and Eurozone Industrial Production.
Equity markets finished a strong week on firm footing Friday after President Trump’s speech on drug prices. There was some de-risking ahead of the speech as the S&P 500 retested the overnight low and traded about 0.5% from the session high on fears the speech would attack the biotech and healthcare industries.
The S&P 500 closed at the highest level since March 20. Yesterday was the sixth positive session in a row and the soft read on inflation spurred broad-based buying. Price action tested out above major three-star resistance but settled hugging the big level in which it failed at less than a month ago.
Yesterday, the S&P settled at the highest level since April 18th and the NQ at the highest since March 20th. While each is more than 4% and 6% from their all-time high, the Russell finished at the highest since March 13th and sits just more than 1% from its all-time high.
All major U.S. benchmarks are firmly higher this morning. Price action chopped around and consolidated through much of yesterday’s session ahead of President Trump’s decision on the Iran Nuclear Deal. His plan to not renew the deal was well-assumed prior to the official announcement.
The S&P 500 is lower this morning after yesterday’s momentum shift. Price action slipped from unchanged at 2:15 a.m. Central, right as Fed Chair Powell spoke at a forum in Switzerland. It is Decision Day. Yesterday, just as crude oil settled above $70 per barrel and at the highest level since November 2014, President Trump tweeted he will announce his decision on the Iran Nuclear Deal today at 1:00 p.m. Central.
U.S. equity benchmarks ripped higher on Friday after Average Hourly Earnings missed expectations and came in at +0.1%. Additionally, last month’s +0.3% was revised down to +0.2%. Job growth was solid at 164,000 and though below the 189,000 expected, last month was revised up to 135,000 from 103,000; making up the difference.