E-mini S&P Futures (September)
Yesterday’s close: Settled at 3017.25, up 1.75
Fundamentals: U.S benchmarks are holding ground at record levels ahead of a deluge of bank earnings, economic data and Fed speak.
Citigroup kicked things off yesterday beating top and bottom-line estimates but finished near unchanged. More broadly, the XLF lost 0.56%. JP Morgan, Goldman Sachs and Wells Fargo report this morning.
On the economic calendar, we look to June Retail Sales data at 7:30 am CT. This is a number that after revisions has done fairly well since February’s miss. Although a better number exudes consumer strength, too good of a read would dent rate-cut expectations for later this month. Today, there is a 32.8% probability the Fed cuts 50 basis points on July 31st, the highest yet. Industrial Production is due at 8:15 am CT and May Business Inventories are released at 9:00 am CT.
To help digest this data dump we have a list of Fed speakers on today’s docket. First up is Atlanta Fed President Bostic and San Francisco Fed President Bowman at 7:15 am CT; neither are 2019 voters. Dallas Fed President Kaplan who votes next year speaks at 11:20 am CT. Fed Chair Powell, largely the catalyst in mounting rate-cut expectations after his dovish Congressional testimony last week speaks at noon CT. Chicago Fed President Evans, a voter this year, wraps things up at 2:30 pm CT and this former dove should be watched closely. In a speech last week, he saw only two rate cuts this year while there is currently almost a 60% probability the Fed cuts 75 basis points this year.
Technicals: Price action in each the S&P and NQ tested our first waves of resistance. For the S&P this is a key level at 3023.75, yesterday’s high was 3023.50. After trading to a high of 7992 yesterday, the NQ has expanded its range trading to major three-star resistance at 7993-8000. For the NQ, we believe in the law of round numbers, and foresee 8000 being a bit of a barrier in the near-term. Furthermore, we have reduced our Bullish Bias to not stand in the way if Retail Sales comes in hot. Price action was as constructive as could be yesterday, pulling back to first key support levels that aligned with Friday’s settlement before finishing the session on an uptick. These remain first key support and pullbacks to here that hold are a buying opportunity while ultimately the bulls are in the immediate-term driver’s seat.
Resistance: 3023.75**, 3045-3057.75***
Support: 3012.50-3015.50**, 3004-3006***, 2997.50*, 2988.50-2990.50**
Resistance: 7993-8000***, 8012.75**, 8076.50***
Support: 7960**, 7910.75-7928.75***, 7879.50-7881**, 7803.50-7834.25***, 7743**, 7693.75***