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Our daily research overs the S&P, NQ, Crude Oil, Gold, Silver, Currencies, Corn, Soybeans, Wheat, Livestock, and Softs markets. 

Went out to brokerage clients before the bell

 

• Friday’s Nonfarm Payroll report for May was strong, but we learned nothing new.
  • Job Growth remains robust, with 339k jobs added versus 180k expected, and April was revised higher by 41k.
  • Wage Growth acceleration continues to show signs of stalling at +0.3% m/m versus +0.4% expected, while April was revised from +0.5% to +0.4%, a lower base for May’s soft jump, and +4.3% y/y, in line with expectations, but down from 4.4% in April. On Thursday, Unit Labor Costs for Q1 were revised from +6.3% to +4.2%.
  • High-quality jobs are being added without Wage acceleration, 64,000 in Business and Professional Services and 97,000 in Private Education and Health Services. Also, 25,000 Construction Jobs were added, and we know the housing sector is humming.
  • The Unemployment Rate rose to 3.7%, the highest since October.
  • The Participation Rate was steady at 62.6, a cycle high.
• OPEC+ committed to supporting Oil prices through 2024
  • New production target of 40.46 mbpd from 2024, lower by 1.4 mbpd
  • Saudi Arabia will make a voluntary cut of 1 mpbd beginning in July, and through 2024.
  • Russia will extend voluntary cut of 500,000 bpd through the end of 2024.
  • Russia, Angola, and Nigeria to see significant production target cuts in 2024.
  • The next OPEC+ meeting will not be until November.
  • Although the action is bullish, the reason for the cuts is a fear of slowing global growth and thus Oil demand. What if China shows up in 2H? We think they will.
• ISM Non-Manufacturing for May is due at 9:00 am CT.
  • Headline number expected at 51.8.
  • Prices expected at 57.8, would be the slowest expansion since July 2020.
  • New Orders could be reaccelerating at 56.5, up from 56.1 in April and 52.2 in March.
  • SPGI Services PMI due first at 8:45 am CT and expected unchanged from preliminary read of 55.1.
• Factory Orders are also released at 9:00 am CT and the economic calendar will be quiet domestically through midweek.
• The Fed is in blackout period ahead of its June 14th meeting and the CME’s FedWatch Tool sees a 24.1% probability of a 25bps hike, down from 64.2% one week ago.

E-mini S&P (June) / E-mini NQ (June)

S&P, yesterday’s close: Settled at 4288.00, up 60.00 on Friday and 74.75 on the week

NQ, yesterday’s close: Settled at 15,575.25, up 103.00 on Friday and 242.75 on the week

 

E-mini S&P and E-mini NQ futures finished last week on a very strong note, and we began to see some rotation of leadership to the likes of Healthcare and Industrials. While E-mini NQ futures broke out above the critical 14,000 area, E-mini S&P futures must secure a close above our two waves of strong resistance beginning with 4303-4309 in order to secure its own breakout.

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Crude Oil (July)

Yesterday’s close: Settled at 71.74, up 1.64 on Friday and down 0.93 on the week

 

Crude Oil futures surged on the open last night, after Saudi Arabia led an effort to support prices, detailed in the bullet points above. However, we cannot ignore several thick waves of strong overhead resistance, highlighted in the levels below. Price action must remain constructive into tomorrow’s EIA Short-Term Energy Outlook and this week’s EIA data in order to avoid a “buy the rumor, sell the news” event, in which a break below rare major four-star support at 71.74-72.25 would confirm.

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Gold (August) / Silver (July)

Gold, yesterday’s close: Settled at 1969.6, down 29.5 on Friday and up 6.5 on the week

Silver, yesterday’s close: Settled at 23.747, down 0.24 on Friday and up 0.387 on the week

 

Indiscriminate selling of Gold and Silver futures resumed Friday and carried into the overnight. Price action must regain Friday’s settlement, aligning to create major three-star resistances detailed below, or sellers remain in the driver’s seat. ISM Services data will be critical in confirming the robust corners of Friday’s Nonfarm Payroll report and will set a tone to start this week. We must see a response against our first wave of major three-star support at 1949.6-1952.9 in Gold, while a close below here would open the door to heavy selling into midweek.

 

Bias: Neutral

Resistance: 1961.9-1963.1**, 1969.6-1970.1***, 1977.5**, 1983.4-1985.6***, 1999.5-2000.5***

Pivot: 1957.3-1958

Support: 1949.6-1952.9***, 1941.7-1943.7***

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Silver (July)

 

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