Looking to the Futures

S&P 500 Closes at Record Highs

May 21, 2024 Chris Waterbury
S&P 500 futures looked to set another record high to start the week, closing marginally higher than Friday's session.

S&P 500 futures looked to set another record high to start the week, closing marginally higher than Friday's session. Stocks received support from positive mergers and acquisition activity. Cruise line companies rallied after Norwegian Cruise Line Holdings increased its adjusted earnings per share estimates. Markets are highly anticipating earnings from NVDA tomorrow to measure semiconductor chip demand. Fed comments made yesterday were mixed for equity markets. Global bond yields pushed higher yesterday capping optimism in stocks. 

Positive M&A activity helped fuel the early morning buying pressure in equity markets yesterday. Southstate acquired Independent Bank at a valuation of $2 billion in an all-stock transaction. In other M&A activity, CyberArk Software Ltd agreed to purchase Venafi for $1.54 billion. 

Cruise Line stocks traded higher to start the week on positive news from Norwegian Cruise Link Holdings. NCLH closed over +7.5% higher yesterday after increasing their full-year adjusted EPS estimate. Carnival Corporation also traded over +7% higher on the positive outlook for travel demand. Cruise line providers have seen positive results so far this year, with Royal Caribbean beating top and bottom lines on their late April earnings announcement.

Nvidia hopes to build on investor optimism with this Wednesday’s earnings announcement on the heels of a very strong performance throughout 2024. NVDA is up over +91% year to date based on last night’s closing price. Current analyst expectations show EPS at +$5.54 and revenue at +$24.17 billion.

Comments made by Fed President Bostic and Fed Vice Chair Jefferson were mixed during yesterday's session. Atlanta Fed President Bostic noted that he still feels the Fed is on track for only one rate cut during 2024. Fed Vice Chair Jefferson said that US April inflation data was encouraging but indicated it was too early to tell if inflation will continue to decrease. The CME Fedwatch tool indicates a 3.6% chance of a -25 bp rate cut in June and 22.8% chance of a -25 bp rate cut in July.

Global bond yields increased yesterday putting downside pressure on equities. The 10-year Treasury yield increased +2.7 bp to 4.447%. The 10-year German bund yield increased +2.5 bp to 2.540% and the 10-year UK Gilt rose +4.4 bp to 4.171%.

Technicals

Looking at the daily chart for the E Mini S&P 500 June 2024 (ESM24) contract we can see the market has continued to march higher despite volume starting to dwindle. The 20-Day Simple Moving Average is looking to cross the 50-Day SMA on the upside which could indicate a short-term bullish signal. ESM24 continues to trade well above the 200-Day SMA.

Trading Central’s Daily Technical Analysis has support levels found at 5290.0 and 5271.0 with resistance levels at 5333.0 and 5345.0.

According to the CFTC Commitment of Traders report released May 14th asset managers increased their long position by +33,041 contracts and decreased their short position by -23,631 contracts. Asset managers are net long 919,252 contracts. 

The 14-Day Relative Strength Index at 67.01% indicates that the contract is moving towards overbought territory.

E Mini S&P 500 June 2024 (ESM24) Chart

E Mini S&P 500 June 2024 (ESM24) Technicals

Contract Specifications

E Mini S&P 500 June 2024 (ESM24)

E Mini S&P 500 June 2024 (ESM24) Specifications

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