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The S&P 500 finished the day lower by roughly 25 bps, leading to a slight increase in volume for S&P 500 futures. However, there’s little to glean from this drop yet; a more decisive move is needed to establish conviction, as the index remains above its 10-day exponential moving average and still within the rising wedge pattern.
Interestingly, the BTIC S&P 500 Total Return futures traded lower again today, with second-quarter generic contracts declining by 3 points to 37.5, effectively returning to the lows observed in early May. It’s notable—and somewhat puzzling—that these futures continue trending lower even as the S&P 500 cash market has moved sharply in the opposite direction. It is sending a deafening message of complacency in the cash markets.
Tomorrow’s PPI report may be more revealing than today’s CPI data, especially considering that the prices paid indices in the manufacturing sector started rising several months ago. So far, the year-over-year increase in the PPI hasn’t fully reflected the recent upticks seen in various Fed surveys and even the ISM data.
Speaking of which, oil prices surged today to close above $68, which is particularly noteworthy given the previous struggles around the $66 level. At this stage, a move back into the mid-$70s can’t be ruled out.
As I write this, news is emerging that President Trump plans to send a letter within the next two weeks detailing the unilateral tariff rates for each country. This development has EURUSD trading above 1.15, breaking through resistance and the ascending triangle pattern. From a technical perspective, I don’t see any reason EURUSD can’t move toward 1.19, which appears to be the next logical target.
Anyway, I’m running behind schedule tonight, so we’ll end it here.
Mike
Terms by ChatGPT
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BTIC (Basis Trade at Index Close): Futures contracts that settle based on the closing price of an underlying index rather than intraday prices.
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Total Return Futures: Futures contracts reflecting not only the price appreciation of the underlying index but also dividends and interest payments.
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bps (basis points): A measurement used to describe percentage changes in financial markets, equal to 0.01%.
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Ascending Triangle: A bullish technical chart pattern indicating potential upward price breakout, formed by a horizontal resistance line and an ascending trend line.
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Unilateral Tariff Rate: A tariff imposed independently by one country on imports from another, rather than negotiated bilaterally or multilaterally.
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ISM (Institute for Supply Management): An organization providing monthly surveys on economic conditions, including manufacturing and services sectors.
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Prices Paid Index: Part of economic surveys (such as ISM), tracking changes in the prices companies pay for inputs and raw materials.
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PPI (Producer Price Index): A monthly economic measure tracking the average change in selling prices received by domestic producers for their goods and services.
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CPI (Consumer Price Index): A measure of average price changes paid by consumers for a market basket of consumer goods and services.
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Exponential Moving Average (EMA): A moving average placing greater emphasis on recent data points, commonly used by traders to identify short-term trends and support or resistance levels.
This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
Subscribe to receive this FREE daily commentary directly in your email
This report contains independent commentary to be used for informational and educational purposes only. Michael Kramer is a member and investment adviser representative with Mott Capital Management. Mr. Kramer is not affiliated with this company and does not serve on the board of any related company that issued this stock. All opinions and analyses presented by Michael Kramer in this analysis or market report are solely Michael Kramer’s views. Readers should not treat any opinion, viewpoint, or prediction expressed by Michael Kramer as a specific solicitation or recommendation to buy or sell a particular security or follow a particular strategy. Michael Kramer’s analyses are based upon information and independent research that he considers reliable, but neither Michael Kramer nor Mott Capital Management guarantees its completeness or accuracy, and it should not be relied upon as such. Michael Kramer is not under any obligation to update or correct any information presented in his analyses. Mr. Kramer’s statements, guidance, and opinions are subject to change without notice. Past performance is not indicative of future results. Neither Michael Kramer nor Mott Capital Management guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment commentary presented in this analysis. Strategies or investments discussed may fluctuate in price or value. Investments or strategies mentioned in this analysis may not be suitable for you. This material does not consider your particular investment objectives, financial situation, or needs and is not intended as a recommendation appropriate for you. You must make an independent decision regarding investments or strategies in this analysis. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Before acting on information in this analysis, you should consider whether it is suitable for your circumstances and strongly consider seeking advice from your own financial or investment adviser to determine the suitability of any investment.
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