US Indices on Wednesday's close: SPX: (+0.41%), NDX: (+0.75%), Dow: (+0.39%) and RUT: (+0.86%)
Energy and Technology led the tape while defensive sectors Consumer Staples and Utilities were sold.
Breaking news: the president says his meeting with congressional leaders over the wall was "a waste of time". He walked out of the meeting. He will be at it again soon. ES futures dropped off a bit from the highs. Guess the market was high enough to allow for a small tantrum.
ES profile looks similar to yesterday's pattern - the difference being that we are finishing up in the center of the profile. The heaviest SPX support for this week is at 2500. The stiffest weekly resistance is SPX 2600 and next 2620. Any run above 2620 would leave the upper hedging area sort of unattended and give the bulls some license to play.
FOMC minutes for December reveal more accommodative stance than markets had previously expected. The emphasis is on patience. We have a bevy of members speaking tomorrow including the Fed chair. The USD (-0.81%) fell below the 200 EMA since that release. It is dropping further now on reports to do with differences between US and China per trade issues. CLG19 light crude settled higher at 52.20/barrel or (+5.1%) and is trading at 52.25 or (+4.94%). GCG19 February gold settled at $1292.30 or (+0.50%) and is trading just above the 61.8% retrace of the April to August trend at 1294.70 or (+0.68%) in electronic trade.
Internals on the Close
NYSE A-D Lines: +1042. NYSE breadth: +2.89:1 and NASD breadth: +2.17:1. NYSE cumulative TICK: trended up but muted relative to yesterday . TRIN: 73 . NYSE MOC: +56M to buy . SPX volume: 2.455 B. NYSE total volume: -7.11%.
Debt
The yield curve steepened a bit because the shorter end was bought while the longer end was sold. A $24B 10-year note reopening was well received. High yield: 2.738% (vs 2.930% 12 auction average), Bid-to cover: 2.51 (vs 2.51), Indirect bid: 56.9% (vs 64.1%), Direct bid: 20.8% (vs 8.7%).
The 2-year (-4 bps to 2.55%) to 10-year (+1 bps to 2.73%) spread expanded to 18 bps while the 2-year to 30-year (+3 bps to 3.02%) grew to 47 bps.
Volatility
VIX now at 19.98 or (-2.39%). VXF19: 20.12 or (-2.45%) and VXG19: 20.26 or (-1.77%).
Incoming
No high impact data tomorrow but there are many fed speakers. Fed's Barkin at 08:35, Fed Chair Powell and Fed's Bullard at 12:30. There is a $16B 30-year bond auction at 13:00. Fed's Evans at 13:00 and Fed's Quarles at 17:30. Weekly unemployment claims are out before the bell at 08:30. EIA Natural Gas Inventories at 10:30. ES futures paired losses a bit and are now treading near the intraday point of control. A joint statement from US and Chinese authorities will take place overnight.
(20min delay)
