Looking to the Futures
Equities Off their Highs
Stocks closed lower yesterday following a volatile end to last week's trading. The Trump administration has proposed fees on the use of commercial ships made in China. The German Dax index traded higher yesterday after it was announced that Friedrich Merz of the Christian Democrats will be the next Chancellor of Germany. Markets are awaiting big earnings announcements this week on top of a busy US economic calendar.
Stock prices slipped into the close yesterday following carryover selling on major names like Meta, Tesla, and Microsoft. Last Friday's economic news led to a sharp selloff in the Nasdaq and S&P 500 Indexes. The University of Michigan's US Feb consumer sentiment index fell to a 15-month low of 64.7 and the University of Michigan's US Feb 5-10 year inflation expectations indicator rose to +3.5%, its highest level in 29 years.
President Trump is pursuing new measures against China with the administration proposing fees on the use of commercial ships made in China. President Trump also issued a memorandum to the US Committee on Foreign Investment in the US instructing the Committee to limit China's ability to invest in key US sectors. The memo suggests limitations on US sectors such as technology, food, farmland, minerals, natural resources, ports, and shipping terminals.
The German Dax index increased +0.62% yesterday after the conservative Christian Democrat party won a plurality in Sunday's election. Friedrich Merz, the leader of the CDU is likely to be the next Chancellor of Germany.
Markets are awaiting the Nvidia earnings announcement after the close on Wednesday. The S&P Global estimates show earnings per share of $0.85, which is well below the $5.16 EPS seen a year ago.
The US economic calendar will drive market sentiment this week. The Feb Conference Board US consumer confidence index is expected to decline -1.4 points to 102.7 on Tuesday. On Thursday the US Q4 GDP report is expected to show an increase of +2.3% q/q annualized with a +4.1% increase in personal consumption. The Jan PCE price index report on Friday is expected to soften to +2.5% y/y, down from December’s +2.6% y/y. The Core PCE Price Index m/m is expected to ease to +2.6% y/y from Decembers +2.8%.
Global bond yields were mixed to start the week. The 10-year T-note yield fell -3.3 bp to 4.398%. The 10-year UK gilt yield increased +2.3 bp to 4.594% and the 10-year German bund yield rose +2.2 bp to 2.492%.
Technicals
Looking at the daily chart for the E-Mini S&P 500 March 2025 Futures (/ESH25) contract we can see the heavy selling pressure on higher-than-average volume over the past 3-days. The contract was not able to close above the 50-day Simple Moving Average after slipping below the 20-Day SMA last Friday.
The Daily Technical Summary from Hightower Research shows support levels at 5974.25 and 5940.38 with resistance levels at 6092.25 and 6176.37.
According to the CFTC Commitment of Traders Report released February 18th asset managers have increased their long position by +17,796 contracts and increased their short position by +1,341 contracts. Asset managers were net long 951,019 contracts as of February 18th.
The 14-Day Relative Strength Index at 44.45% indicates there are slightly more sellers than buyers at this point.
Contract Specifications
Economic Calendar
Consumer Confidence 10:00 AM ET
FHFA Housing Price Index 9:00 AM ET
S&P Case-Shiller Home Price Index 9:00 AM ET