Morning Express | Technicals & Fundamentals | Nonfarm Payrolls Friday | Stocks, Oil, and Gold
E-mini S&P (September)
Yesterday’s close: Settled at 3344.25, up 28.25
NQ, yesterday’s close: Settled at 11,261.25, up 169.50
Fundamentals: Bellwethers Apple, Facebook, Alphabet, Microsoft, and Amazon led the way yesterday with help from Adobe, Salesforce, and Disney. The NQ closed at a fresh record high, and these tech stocks accounted for the S&P’s resilience against one of the most famous technical levels in history; the scene of the crime gap close from February 21st. The S&P closed yesterday 1.5% from its February 20th record high.
Nonfarm Payroll is due today at 7:30 am CT and expectations are for a 1.6 million jobs added in July with the Unemployment Rate dropping to 10.5% from a peak of 14.7% in April. Since March 14 million jobs have been lost. The Private ADP survey for July released Wednesday showed vastly less jobs added at 167,000. ADP’s loss rate since March is in line with the official Nonfarm data. The recovery is overshadowed by expectations for mounting jobs cuts whether it be from airlines, struggling industries or small businesses once loans were exhausted. Average Hourly Earnings on a yearly basis is expected to increase by 4.1%. Wage data is skewed due to many low paying jobs disappearing and many individuals choosing to not go back to work because they are earning more from Unemployment.
This pins Washington’s deadlock in the spotlight. There remains a great divide between Senate Republicans and House Democrats as today’s deadline to pass a fifth stimulus package looms. Each side is holding ground and pandering to their constituency ahead of November elections. President Trump has said he could step in with executive action to extend jobless benefits, a moratorium on evictions and potentially suspend payroll taxes.
Also, hanging in the balance are U.S.-China relations. President Trump signed an executive order prohibiting U.S residents from doing business with TikTok and WeChat, giving them 45 days to comply. Overnight, we got Trade Balance data with China. The trade surplus soared to the second highest monthly total on record as exports surged by 7.2% versus -0.2% expected.
Technicals: Price action knows no bounds. Yesterday, the S&P moved directionally through the gap from February 21st with not a care in the world. In our eyes, this is a massive level of resistance, the scene of the crime from the onset of the pandemic. Price action is respecting such a critical level a bit more ahead of Nonfarm Payroll and U.S. hours this morning. Our momentum indicator in the S&P brings our ... Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias, and proprietary levels emailed each morning.
Crude Oil (September)
Yesterday’s close: Settled at 41.95, down 0.24
Fundamentals: Crude Oil is edging lower this morning and risk-assets are broadly doing the same. Chinese Trade Balance data overnight posted a surge of Crude Oil Imports by 25% YoY, but the data has done very little to buoy a tape that’s struggled to hold a breakout on the week. Regardless of the Crude centric component, Exports from China jumped by 7.2% YoY, much stronger than the -0.2% expected and German Exports came in at a healthy +14.9% MoM. The data alludes to a recovering global economy, however, with China’s total Imports falling by 1.4% coupled with friction between the U.S., it does dampen the broad demand coming from the world power. Overall, expectations of added OPEC+ supply have also clearly weighed on the potential of higher prices this week, outlasting fears of an active hurricane season in the U.S. Nonfarm Payroll is due at 7:30 am CT and will certainly drive market sentiment.
Technicals: Price action is chewing through strong support at 41.65-41.78, this level now aligns to create our Pivot at 41.65-41.98 and price action below there encourages a continued consolidation lower. Remember, the surge higher Tuesday was met by the 200-day moving average and failed to settle above the March 6th gap. First key support comes in at ... Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias, and proprietary levels emailed each morning.
Yesterday’s close: Settled at 2069.4, up 20.1
Fundamentals: Gold stretched to a new high early last night hitting 2089.4, again led by Silver’s continued surge which nearly hit $30 at 29.915. We have been unequivocally Bullish in Bias Gold since the autumn of 2018 and this has played out even better than we could have ever anticipated. We do not believe the precious metals rally to be in the late innings, in fact, it may only be midway through. However, straight-shot exuberance is becoming a bit overdone. We will be patient for lower prices to reposition and see an opportunity to expect Platinum to lead the way within a healthy pullback. Nonfarm Payroll is due at 7:30 am CT. The U.S. Dollar has had a difficult time capitalizing on better U.S. economic data, but a strong jobs report today should boost the Dollar and weigh on the metals, whereas poor job gains should continue to buoy the sector. Washington’s fifth fiscal stimulus bill or the lack thereof is also in the spotlight upon today’s self-imposed deadline and this will certainly sway market sentiment.
Technicals: Gold did not settle out above major three-star resistance at 2072.5 yesterday, but the stretch higher late in the session has allowed our momentum indicator to rise and align with this level. We will maintain this as major three-star resistance and continued price action below here will encourage ... Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias, and proprietary levels emailed each morning.
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