Disappointed Bulls in Equity Markets

July 11, 2017 11:20AM CDT

Global equity markets were mixed overnight with Asian markets generally positive and European markets generally weaker.  In a slightly disappointing development for the bull camp, the market remains lower this morning in the face of better than expected quarterly profits/revenues from PepsiCo.  News that Seattle passed an income tax on high earners is potentially a major negative as that signals a fresh revenue angle for other cities and that news adds to the threat of higher Illinois income tax rates from last week.  In short, instead of seeing the realization of federal tax cuts/reform and infrastructure spending, US stock markets continue to see regional tax drags on growth.  With Pepsi beating revenue estimates, the market starts the Tuesday trade with a specific positive fundamental news item.  Unfortunately, initial US price action in the E mini S&P failed to follow Asian stocks higher and the E-Mini appears to have critical pivot point just under the market at 2419.  An issue that might favor the bear camp early today is the fact that defensive shares pulled down European markets and there also appears to be some weakness in oil sector shares early today.  A more significant consolidation support zone is seen at 2415.

Sep ’17 E-mini S&P 500 Daily Chart

Sep ’17 E-mini S&P 500 Daily Chart

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgement at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.