Looking to the Futures

Equity Markets Mixed to Start the Week

March 26, 2024 Chris Waterbury
Stocks traded lower on Monday after hawkish Fed comments but have rebounded this morning.

Stocks traded lower on Monday after hawkish Fed comments but have rebounded this morning. Global Treasury yields ticked higher increasing downside pressure on markets. Negative corporate news heightened selling pressure on a variety of stocks. In the bull camp tech stocks SMCI and MU both traded significantly higher on positive news. Economic news came in mixed on Monday.

Atlanta Fed President Bostic commented yesterday that the Fed could take a more hawkish approach to interest rate cuts this year. President Bostic supported just one 25 bp rate cut this year despite the dot plot projecting up to three 25 bp rate cuts throughout 2024. Fed Governor Cook also took a hawkish approach indicating that cutting interest rates prematurely could risk inflation becoming entrenched. 

Global bond yields increased yesterday in part due to the comments made by FOMC members. The 10-year US T-note yield increased +4.59 bp to 4.212247%. The treasury note is also seeing prices being undercut by the $66 billion of 2-year T-notes that were auctioned off yesterday as part of this weeks $161 billion auction package of T-notes and floating rate notes. The 10-year German bund yield increased +5.2 bp to 2.375% and the 10-year UK gilt yield increased +6.8 bp to 3.922996%.

Corporate news was mixed to start the week. On the bearish side Take-Two Interactive Software closed -4% lower after Kotaku reported that the company's production of Grand Theft Auto VI has slowed with growing potential that the game could miss its 2025 release window. United Airlines closed -3.4% lower after reports that the Federal Aviation Administration may put temporary sanctions due to safety incident concerns. 

In the bull camp, Super Micro Computer shares closed over +7% higher after JP Morgan Chase released an overweight recommendation on the stock with a price target of $1,150. Micron Technologies closed more than 6% higher on reports that the CEO of MU told China's commerce minister that Micron plans to expand investment in China. 

U.S. economic news was mixed yesterday with the U.S. Feb Chicago nation index increasing +0.59 to 0.05, better than the expected -0.34 figure. U.S. Feb new homes sales fell -0.3% m/m to 662,000 lower than the expected increase to 677,000.

Technicals

Looking at the daily chart for the E Mini S&P 500 June 2024 (ESM24) contract we can see buying pressure has slowed after all-time highs last Thursday. The contract has traded lower on lower volume potentially looking to test the 20-Day Simple Moving Average. ESM24 is still trading well above the 50-Day and 200-Day SMA levels.

Trading Centrals Daily Technical Analysis has support levels found at 5265.0 and 5247.0 with resistance levels at 5300.0 and 5323.0.

According to the CFTC Commitment of Traders report released March 19th asset managers have increased their long position by 20,015 contracts and decreased their short position by -13,016 contracts. Asset managers are net long 946,828 contracts. 

The 14-Day Relative Strength Index at 63.48% indicates that ESM24 is moving into overbought territory. 

 E Mini S&P 500 June 2024 (ESM24) Chart

 E Mini S&P 500 June 2024 (ESM24) Technicals

Contract Specifications

E Mini S&P 500 June 2024 (ESM24)

 E Mini S&P 500 June 2024 (ESM24) Specifications

Trading Calendar

Consumer Confidence                        10:00 AM ET

Durable Goods -ex transportation      8:30 AM ET

Durable Orders                                   8:30 AM ET

FHFA Housing Price Index                  9:00 AM ET

S&P Case-Shiller Home Price Index   9:00 AM ET