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E-mini S&P (June)
Last weeks close:Settled at 2875, up 29.25
Fundamentals:U.S benchmarks surged Friday following an underwhelming jobs report and extended gains on the open last night after President Trump announced he wont impose a 5% tariff on Mexico. Sentiment turned sharply positive as the week unfolded given ballooning expectations for the Fed to cut rates as early as July and news that Mexico deployed troops at their southern border with Guatemala to stop migrants signaling a potential deal. Nonfarm Payroll provided the final tailwind to cap off a 5.5% rally in the S&P from last Mondays low. Average Hourly Earnings, the most important component of the jobs report, came in at +0.2% versus +0.3%. Without inflation, the Fed has a clear path to cut rates and the probability for a cut at or by their July meeting has risen to 84%.
Heading into this new week, there are two foreseeable headwinds aside from slowing growth which is being offset by a dovish Federal Reserve. The first is the U.S and China trade war. All that now matters here is the meeting between President Trump and President Xi at the G-20 Summit later this month. Expectations are building for good news; we would expect a wave of selling if markets are left disappointed. Trade Balance data from China last night was overall upbeat. Antitrust worries provide the other headwind. Google and Facebook both finished the week off their worst levels but did not join the party losing 3.4% and 2.3% respectively. Although government intervention is extremely unlikely, headline risk is now ever-present.
The Federal Reserve has entered their quiet period ahead of next weeks policy meeting. Today, we look to JOLTs Job Opening at 9:00 am CT. CPI data on Wednesday is likely the highlight of the week. If inflation strengthens, it could keep the Fed from cutting rates.
Technicals:If the bull case was not solidified by Wednesdays close out above 2817, it was certainly confirmed through Fridays session and on a weekly close out above major three-star resistance at 2871.50-2872.50. Major three-star support in the S&P now comes in at ...Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Crude Oil (July)
Last weeks close:Settled at 53.99, up 1.40 on Friday and up 0.49 on the week
Fundamentals:Crude Oil surged higher on the open last night with a broadly positive risk environment and after Saudi Arabia and Russia had seemingly agreed to extend output cuts at the OPEC+ meeting a month out. However, Saudi Energy Minister Al-Falih poured cold water over those hopes early this morning saying that Russia is the only exporter to remain undecided on extending the cuts. Despite the fundamental knee-jerk higher, we find this market very technically driven today.
Technicals:We have been upbeat Crude Oil from oversold territory, however, last nights spike was rejected by major three-star resistance at ...Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Last weeks close:Settled at 1346.1, up 3.4 on Friday and up 35.0 on the week
Fundamentals:Todays price action is a stark reminder that Gold has no memory from week to week. Safe-haven assets are taking a blow to the gut this morning, but Gold is down the most compared to U.S Treasuries and the Yen. Risk-sentiment was boosted coming out of the weekend after President Trump said he will not impose tariffs on Mexico and the Dollar is gaining ground. Overall, our Bias never got too Bulled up in the near-term, waiting for such a pull-back as a buying opportunity. JOLTs Job Opening came in worse than expected this morning and this may help solidify a bottom given the poor job growth in last weeks jobs report.
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