Global markets are mostly a bit lower overnight and were able to maintain a mostly positive tone yesterday. A better than expected reading on pending home sales reflected strength in the US housing market, but the main event for global markets occurred when the UK’s Article 50 letter officially started the Brexit process/ US equity markets ended up with mixed results as the financials-weighed the Dow Jones behind the S&P and Nasdaq. Treasuries remained well supported as the market comes to terms with “only” two more Fed rate hikes over the rest of this year, although the Fed’s Rosengren and Williams hinted that three more hikes were not totally off the table. The Dollar extended this week’s recovery move with a moderate gain while the Euro was pressured from indications that ECB officials are reluctant to make policy changes at their upcoming meeting.

S&P 500: The US and global economies are doing better than expected, and consumer sentiment readings are off the charts! Outside of economic policy, the Trump administration is struggling with other issues which could bleed into trade policy but with the tax policy outlook and plans for further active deregulation and infrastructure spending, the stock market outlook remains positive as shown below. However, throw in a positive tilt to Asia and Europe and the market looks like we could continue to climb a wall of worry – In other words, how much longer can the Bulls drive this market up? This is the key question for the stock market right now.

Market Ideas: Close-in support for June E-Mini S&P is at 2348.20 and 2340.50. Traders should consider buying into support with 2366.90 and 2388.70 as next resistance. The market’s short-term trend is positive on the close above the 9-day moving average. Cheaper commodity prices, soaring consumer confidence and the outlook for stimulus from taxes, infrastructure and regulation reform are all seen as supportive forces. Consider buying breaks into support. 


June Emini Daily Chart

Manon Lasserre