RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

US stocks are showing initial weakness and would seem to remain injured into the last session of this holidays shortened trading week, however we are surprised that the trade wasn’t able to benefit from a series of favorable Chinese economic developments overnight. We acknowledge the potential for lack of positive US data this morning and that might justify some of the weakness but traders need to be alert to the prospect of a major trend decision this morning off impending earnings news, especially since the markets came under initial pressure off JP Morgan results. There will be a big day for earnings announcements in the US financial sector with J.P. Morgan, Wells Fargo, Citigroup and PNC Financial reporting before the Wall Street opening.

S&P 500: Residual weakness in the markets to start today is clearly the result of the after effects of this week’s political and economic turmoil. However, one can’t discount the prospect that investors will remain disappointed in the prospect of pro-growth efforts in Washington. In fact, the odds of ongoing pro-growth policies seem to have been reduced with the best case scenario now calling for August or later timing. Some in the market are probably concerned that pro-growth policies might not see the light of data at all because of the Trump administration squandering of its political capital from just after the election. With the June E-Mini S&P this morning sitting right on this week’s low and a flurry of potentially critical financial sector earnings, traders should be poised to go with the earnings reaction. The failure to get positive earnings could set the stage for a big range down trade today. On the other hand, a recovery back above 2337.50 could elicit a week ending short covering balancing.

Today’s Market Idea: The overnight slide lower by June Mini S&P has started the expected downturn for the day, therefore voiding the recommendation.


Jun '17 Emini Daily Chart

Manon Lasserre