Daily Update - 02/14/2019
The anticipated weakness from down cycles continued today. S&P futures tried to rally past 2762 but failed and in the morning dropped to 2730 by 9:45 am, a 32 point decline. From there S&P tried to make another uptrend with futures reaching 2757 which was sold off by 16 points to close at 2741. Daily charts show a clear RSI negative divergence. With cycles still down, S&P should show weakness again tomorrow. On economic news front, tomorrow is a busy day with empire state mfg survey and import/export prices at 8:30 am, industrial production at 9:15 am, and consumer sentiment at 10:00 am.
US Dollar closed slightly lower today at 96.86.
What surprised markets today was a -1.2% decline (-1.8% without autos) in retail sales and a higher than expected jobless claims at 239K. Both of these didn't surprise cycles which were expecting deterioration.
While most of the economic stress indicators that we follow have come down significantly from Dec' 2018 highs, the 2T10T yield difference is still at 18 basis points. Bond pricess are continuing to show strength amid weak global economic data.