Forget what happened after the S&P 500 futures opened at 8:30 CT, because it’s not where the trade has been. It’s all being done at night. For the last few weeks, Globex has been where all the trade is going. A little early down tick, and then a 6 to 10 handle rally. This has had a bug effect on the S&P 500 futures (ESU17:CME) on the actual 8:30 futures open. The Globex session has seen the ES higher 6 out of the last 10 sessions, and up 3 in a row. In my view, it’s all about ‘thrust’, and when so much movement takes place at night, it takes a sharp rally or drop to rebuild the thrust to get things going again.
Yesterday, at 9:30am CT, the ES had basically been stuck in a 3 handle range for the first hour of trade. It’s an odd thing. Over the years, many traders moved over to the S&P 500 futures because they moved so much, so fast. You could get in and get out, and most trades didn’t take long to develop, but it seems like that’s not how it works anymore.
Trump’s Approval Rating Sinks To Lowest Point Yet
At 11:45 CT yesterday, the high in the ES was 2474.25, but that’s not where the action was. It was in the Nasdaq 100 futures that rallied all the way up to 5949.50. For the most part, it was another quiet day, until after 1:00 when Blackstone (NYSE:BX) Group Chief Executive Stephen A. Schwarzman, who was head of the Strategic and Policy Forum, called the president to inform him the group was being disbanded. After the call, the president took to twitter saying that it was his decision to disband that council, and that he also was disbanding the manufacturing-advisory council.
It was another big blow for the president and his pro-business agenda. The ES and NQ stutter stepped below their vwap’s, quickly sold off down to 2462.50 and 5902.00, then bounced a little as the news hit the wires.
In the end, it was another slow day, with the Nasdaq 100 futures (NQU17:CME) leading the way, and a great example of maybe one of the largest missteps of Trumps presidency. I started Tweeting about Trump’s controversial response to the violence in Charlottesville Tuesday night, but Wednesday’s blow up and loss of some of the largest backers and firms in the nation truly cast doubt about both his direction, and ability to run the nation.
Chairman and CEO of Dow Chemical (NYSE:DOW) Andrew Liveris said in a statement Wednesday, “Every member of the Manufacturing Jobs Initiative condemns racism and bigotry, and there cannot be moral ambiguity around the driving forces of the events in Charlottesville” J.P. Morgan Chase Chief Executive Jamie Dimon was quoted as saying, “It is a leader’s role, in business or in government, to bring people together, not tear them apart.”
After the sell off the S&P 500 futures (ESU17:CME) settled at 2467.50, up +3.75 handles, or +0.15%, the Dow Jones futures (YMU17:CBT) settled at 22011, up +34 points, or +0.15%, and the Nasdaq 100 futures (NQU17:CME) settled at 5923.50, up +11.50 points, or +0.19%.
While You Were Sleeping
Overnight, equity markets in Asia traded mixed, with a slight bias to the upside. Meanwhile, in Europe, with the dollar gaining strength on the dovish comments made by the fed yesterday, most markets are currently trading lower this morning.
In the U.S., the S&P 500 futures opened last night’s Globex session at 2466.75, and immediately began trading lower. At 2:00am CT, as Asian markets were closing, and European markets were opening, there was a small pop from 2464.50, up to the overnight high of 2468.50. From there, the ES followed suit with European markets, and began trading lower. As of 6:45am CT, the last print in the ES is 2462.00, down -5.50 handles, with 123k contracts traded.
In Asia, 7 out of 11 markets closed higher (Shanghai +0.68%), and in Europe 10 out of 12 markets are trading lower this morning (FTSE -0.42%).
Today’s economic calendar includes Jobless Claims (8:30 AM ET), Philadelphia Fed Business Outlook Survey (8:30 AM ET), Industrial Production (9:15 AM ET), E-Commerce Retail Sales (10:00 AM ET), Leading Indicators (10:00 AM ET), EIA Natural Gas Report (10:30 AM ET), Dallas Fed’s Robert Kaplan Speaks (1:00 PM ET), Minneapolis Fed’s Neel Kashkari Speaks (1:45 PM ET), Fed Balance Sheet (4:30 PM ET), and Money Supply (4:30 PM ET).
Our View
Wow… President Trump really messed up on this one. Losing all the backing from some of the largest companies in the U.S. is NOT a good thing. One has to wonder if he has bitten off more than he can chew. I am a backer for change, but not stepping up to the plate, and losing so much big support is very hard to understand.
That said, the markets will move on, but his inactions won’t. Trump is losing support from all angles. Our view is that there are sell stops building under 2472.50, and go down to 2466.00. I think they may go for them. Sell the early rallies and buy weakness.
