Wednesday Morning's Market Briefing

Wednesday Morning's Market Briefing

Since trading at a five-month high last Thursday, the S&P 500 has pulled back this week and the bulls are struggling to rally.

Wednesday Morning's Market Briefing
Wednesday Morning's Market Briefing RawPixel.com via StockSnap

Headlines that affect the markets remain similar this week as in previous weeks. In Europe continuing deliberations over the Brexit plan accompanied by other bad economic data out of EU. Meanwhile, reports regarding China show seriously declining economic as industrial profits fell at the worse rate since 2011. In the U.S., the 10 Year Treasury Note yield became inverted with the 3 Year Treasury Note last week for the first time since 2007, often a leading indicator of recession.

The S&P 500 futures, which had hit the highest levels since October 10th last Thursday, sold off on Friday and then found a low on Monday when it completed a 76.50-handle pullback. However, since then, the index has only been able to manage a 45.50-handle rally and is back in the red this morning.

In Asia, 7 of 12 markets closed lower, but the Shanghai finished higher by .85%, and in Europe 11 out of 13 equity markets are currently trading modestly lower while in the U.S. the S&P 500 futures are down .25% at 7:00 a.m. EST.

Today’s calendar has several items scheduled, but nothing is expected to be market-moving. In addition, 41 corporate earnings will be reported today, but these are mostly for smaller companies as the first quarter winds down. Already this morning, the MBA mortgage applications were reported and are higher by 9%, which does help relieve some concerns of a possible bearish housing market on the horizon.

Our charts show a simple trendline at the 2820 area that was broken this morning. The downside levels to watch on the ESM19 are yesterday’s 2805.50 low and then the 2789 - 2791 support level from Monday. Should that area fail, we will be looking for 2778.

On the upside, if the ES can get back above 2825, then we would look for 2831.75 which is the overnight high, followed by Tuesday’s 2835.00 high and then Friday’s 9:30 open of 2845.75. In the very short term, it looks like bears have the advantage, but they would need to follow through today. Otherwise, the bulls, which hold the bias on the longer time frames, are ready and waiting for buying opportunities.

 

Today’s Economic Calendar:

  • MBA Mortgage Applications 7:00 AM ET
  • International Trade 8:30 AM ET
  • International Trade in Goods 8:30 AM ET
  • Current Account 8:30 AM ET
  • Retail Inventories [Advance] 8:30 AM ET
  • Wholesale Inventories [Advance] 8:30 AM ET
  • State Street Investor Confidence Index 10:00 AM ET
  • EIA Petroleum Status Report 10:30 AM ET
  • 2-Yr FRN Note Auction 11:30 AM ET
  • 5-Yr Note Auction 1:00 PM ET
  • Esther George Speaks 7:00 PM ET

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