E-mini S&P (December)
Yesterday’s close: Settled at 3143.75, up 11.00
Fundamentals: Bullish momentum from the U.S-China trade narrative, stronger than expected earnings and looser Federal Reserve policy has powered the S&P and NQ to a fresh record each day this week. This certainly is not momentum that traders want to step in front of and the low volume during this holiday week is adding a tailwind. President Trump said late yesterday that the interim “Phase One” trade deal is in the “final throes”. As we discussed here yesterday, China seems to be eager to get an interim deal done ahead of the December 15th tariffs and data continues to show deteriorating growth. Just last night, China’s Industrial Profit declined by 9.9% YoY. What matters most to this market is the White House not implementing those December 15th tariffs.
Today’s economic calendar is jam-packed. Deere & Company is down 5% this morning after reporting earnings in line with estimates but lowered guidance due to the trade war. At 7:30 am CT, we get the Federal Reserve’s preferred inflation indicator the Core PCE Index, the second look at Q3 GDP, Durable Goods and Initial Jobless Claims. Chicago PMI is due at 8:45 am CT after last month was the worst since 2015. Pending Home Sales and Personal Spending/Income data are due at 9:00 am CT. Weekly Crude inventories are out at 9:30, a 7-year Note Auction follows at noon and the Fed’s Beige Book is released at 1:00 pm CT.
Technicals: Price action continues to grind higher in the S&P and NQ futures. First key support in the S&P aligns yesterday’s settlement with our momentum indicator and the bulls will remain clearly in the driver’s seat above here. The NQ finally chewed through major three-star resistance at 8375.50-8384.25 and this level now comes in as strong support. If the tape can hold out above here and furthermore out above our pivot that consists of yesterday’s settlement aligned with our momentum indicator this morning, the bulls will have their sights set on 8453 at minimum before close. Only a close back below 3126-3132.50 in the S&P will begin to neutralize the latest breakout and the market more broadly.