U.S. Stocks Lower On Open

November 2, 2017 10:25AM CDT

S&P futures are looking at a weak opening Thursday as investors wait for more earnings, and any news on the U.S. central bank. The market is showing a fresh downside extension to the lowest level in four sessions. It would appear that investors are banking some profits ahead of the tax reform plan, which has generally been altered to be less favorable to growth. This is because of short-term benefits combined with what appears to be a longer term tax hike. Other issues negatively impacting the equity market this week are possible price-fixing threats against drug companies, intense scrutiny of social media platform companies, and noted weakness in bellwether Tesla shares.

As previously mentioned, the December S&P has displayed negative overnight chart action from Wednesday to Thursday, but it also seems as if the index rejected that four day downside breakout. It is possible that the e-mini S&P will attempt to buy the rumor ahead of the tax reform release, and it is also possible that the index will receive a minimal benefit if the appointment to the Fed is Jerome Powell. However, we would suggest that the rally of the last seven sessions has factored in a dovish Fed chairman and something pro-growth from tax reform. 


Dec '17 Emini S&P Daily Chart

Dec '17 Emini S&P Daily Chart

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