Market Overview – Morning Express
E-mini S&P (September) / NQ (September)
S&P, yesterday’s close: Settled at 4601.25, down 13.25
NQ, yesterday’s close: Settled at 15,817.25, down 40.25
After the close yesterday, Fitch announced a U.S. credit downgrade, slashing it from AAA to AA+ and sending equity markets lower overnight. The useless private ADP jobs survey was released this morning and came in hotter than expected at 324k versus 189k. They also revised June’s blowout of 497k down 10% to 455k. Remember, Nonfarm Payroll for June came in at 209k versus 225k expected. To make this survey even worse, there is no wage growth context.
E-mini S&P and E-mini NQ futures finished strongly yesterday, paring losses, before being slammed on the credit news after-hours. The weakness has violated what became a floor of support at 4560.50-4565.75 in the S&P. Although there are several significant levels of support just below, we must be on the lookout for such a move rattling an exhausted tape over the intermediate-term.
Resistance: 4587.25-4589.75***, 4593.50-4595.25*, 4598.25-4601.25***, 4606-4609.25***, 4614.50**, 4619.25-4625.50***, 4631-4634.50***
Support: 4560.50-4565.75***, 4541.75-4545.25***, 4531-4536.75**, 4493.75-4507.50***
Resistance: 15,789-15,818***, 15,847-15,858**, 15,895-15,905***, 15,959-16,009****
Support: 15,571-15,610***, 15,511-15,519***, 15,444-15,475****
Crude Oil (September)
Yesterday’s close: Settled at 81.37, down 0.43
Crude Oil futures are likely finding Fitch’s credit downgrade unsupportive as they also downgraded U.S. GDP for 2023 to 1.2%. At the same time, Bank of America raised U.S. GDP for 2023 to 2.0% from 1.5%. You can’t make this up. The API private survey printed a massive surprise draw in inventories last night, who would have thought, at -15.4 mb Crude, -1.68 mb Gasoline, -0.512 mb Distillates. Also, another -1.76 mb a Cushing, in what would be the fourth straight weekly drop at the hub, though less than the -2.49 mb forecast for the official EIA report. Those estimates for the official 9:30 am CT release are -1.367 mb Crude, -1.3 mb Gasoline, and +0.112 mb Distillates. Anything within earshot of the private API survey will likely be supportive of the tape, especially from major three-star support at 80.39-80.70.
Remember, our upside target of 82.52-82.71 has been achieved, and we have therefore reduced our Bias to cautiously Bullish.
Support: 80.39-80.70***, 79.90-80.13**, 79.03-79.46***
Gold (December) / Silver (September)
Gold, yesterday’s close: Settled at 1978.8, down 30.4
Silver, yesterday’s close: Settled at 24.326, down 0.646
Gold and Silver futures did lift from yesterday’s weakness on the Fitch credit downgrade but were slammed due to the forcibly relevant private ADP payrolls survey coming in at 324k versus 189k. They also revised June’s blowout of 497k, down 10% to 455k. Remember, Nonfarm Payroll for June came in at 209k versus 225k expected. To make this survey even worse, there is no wage growth context. U.S. 30-year Bond futures are now at the lowest level since March 3rd, days before the regional banking crisis. Bonds weakness and U.S. Dollar strength is a direct headwind to the precious metals complex.
Major three-star supports in each, 1975.8-1978.8 in Gold and 24.27-24.39 in Silver, will be a critical battleground for the bulls.
Resistance: 1992.1***, 1999.9-2002.8***, 2009.2-2012***
Support: 1975.8-1978.8***, 1969.7**
Resistance: 24.59-24.63**, 24.82*, 24.97-25.11***, 25.32**
Support: 24.27-24.39***, 23.28-23.59***
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