The futures for the major indices are mixed as market participants wait for the June jobs report. The S&P 500 futures are down 9 points and are trading 0.2% below fair value. The Nasdaq 100 futures are down 51 points and are trading 0.4% below fair value. The Dow Jones Industrial Average futures are up 12 points and are trading roughly in line with fair value.
In overseas news, Japan’s former Prime Minister Shinzo Abe was assassinated while giving a speech at a campaign event. Beijing walked back its earlier announcement indicating mainland China’s first vaccine mandate.
On a related note, President Biden is set to meet with advisors today to discuss cutting Chinese tariffs.
The 2s10s spread remains inverted heading into the open. The 2-yr note yield is down two basis points to 3.00% while the 10-yr note yield is down three basis points to 2.98%.
Energy futures have pulled back some. WTI crude oil futures are down 0.4% to $102.35/bbl. Natural gas futures are down 1.9% to $6.14/mmbtu. Unleaded gasoline futures are down 1.3% to $3.37/gal
(Michael Gibbs, Director of Equity Portfolio & Technical Strategy)
The SP&P 500 rallied past resistance at 3900.86 and closed higher at 3902.62. The index has closed higher four days in a row, and Thursday’s upside volume was at 89.7%. The RSI index did finally close above 50 in support of the recent uptrend closing at 50.76.
If the buyers come in, the next resistance could come in at the 50-day moving average at 3978.17. However, we feel another up day may be too much to ask today.
The June US non-farm employment number came in better than expected, showing inflation could possibly be rising, and so far, the S&P 500 futures suggest an open of 3885.00. That would make the 3810.32 level the next possible support level.
We are currently Intermediate-term bearish and short-term bearish.
John N. Lilly III CPFA
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJFS
Windsor Wealth Planners & Strategist
Futures trading is speculative, leveraged, and involves substantial risks. Investing always involves risk, including the loss of principal, and futures trading could present additional risk based on underlying commodities investments.
The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum oscillator that measures the speed and changes of price movements.
The advance/decline line (A/D) is a technical indicator that plots the difference between the number of advancing and declining stocks on a daily basis. The indicator is cumulative, with a positive number being added to the prior number, or if the number is negative it is subtracted from the prior number.
The A/D line is used to show market sentiment, as it tells traders whether there are more stocks rising or falling. It is used to confirm price trends in major indexes, and can also warn of reversals when divergence occurs.
The percentage of stocks trading above a specific moving average is a breadth indicator that measures internal strength or weakness in the underlying index. The 50-day moving average is used for short-to-medium-term timeframes, while the 150-day and 200-day moving averages are used for medium-to-long-term timeframes. Signals can be derived from overbought/oversold levels, crosses above/below 50% and bullish/bearish divergences.
The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stock of companies maintained and reviewed by the editors of the Wall Street Journal. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represent approximately 8% of the total market capitalization of the Russell 3000 Index.
The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S stock market. Past performance may not be indicative of future results. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investors’ results will vary. Opinions expressed are those of the author John N. Lilly III, and not necessarily those of Raymond James. “There is no guarantee that these statements, opinions, or forecast provided herein will prove to be correct. “The information contained was received from sources believed to be reliable, but accuracy is not guaranteed. Investing always involves risk, and you may incur a profit or loss. No investment strategy can guarantee success. The charts and/or tables presented herein are for illustrative purposes only and should not be considered as the sole basis for your investment decision. International investing involves special risks, including currency fluctuations, different financial accounting standards, and possible political and economic volatility. Investing in emerging markets can be riskier than investing in well-established foreign markets.
This is not a recommendation to buy or sell any company’s stock mentioned above.
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