A Blowout ADP Rocks Markets!
Posted: July 6, 2023, 9:11 a.m.
E-mini S&P (September) / E-mini NQ (September)
S&P, yesterday’s close: Settled at 4483.75, down 8.50
NQ, last week’s close: Settled at 15,360.75, down 4.00
Jobs are in focus this morning, and the private ADP survey reported blowout growth at 497k versus 228k expected. This is the largest job growth via ADP since January 2022. This was coupled with a slowing of Initial and Continuing Jobless Claims. Although Initial Claims did come in a touch higher at 248k versus 245k, the last two weeks have improved from the 260k+. Furthermore, Challenger Job Cuts in June showed half as much as May. This is all combined with surging Treasury yields as prices melted to new cycle lows yesterday and are seeing fresh selling on the heels of the strong jobs data. We now look to the ISM Non-Manufacturing report at 9:00 am CT, where the headline read will be watched closely along with Prices, Employment, and New Orders. Final SPGI Services PMI is due just before at 8:45 am CT, and we also look to JOLTs Job Openings at 9:00 am CT. Tomorrow, Nonfarm Payrolls are due at 7:30 am CT.
Rising yields and much stronger-than-expected jobs dented an already soft tape. E-mini S&P and E-mini NQ futures are trading to fresh lows on the week on the heels of the data and this sets the table for a critical test of rare major four-star support in the E-mini S&P at 4430.75-4435.75. Ultimately, some buoyancy at this support and a close back above 4465 in the E-mini S&P and 15,238-15,268 in the E-mini NQ will go a long way in neutralizing this weakness ahead of tomorrow’s data.
Bias: Neutral/Bullish
Resistance: 4465**, 4471.25-4474.25**, 4483.75***, 4488.25-4493.75***, 4498-4500***, 4509**, 4536.50-4439.25***
Pivot: 4453.25-4455.50
Support: 4441.50-4444.75*, 4430.75-4435.75****, 4417.50-4418.75***, 4407.25-4409.75***
NQ (Sept)
Resistance: 15,337-15,374***, 15,475-15,500***
Pivot: 15,238-15,268***
Support: 15,139**, 15,078-15,095**, 15,025-15,037***, 14,963-14,986**, 14,856-14,898****
Crude Oil (August)
Yesterday’s close: Settled at 71.79, up 2.00
The weekly EIA inventory report is front and center at 10:00 am CT. Analysts expect -0.983 mb Crude, -1.417 mb Gasoline, and +0.296 mb Distillates. As the strong slate of jobs data this morning has created a wave of risk off, Crude Oil futures are retreating from a direct test of our major three-star resistance at 72.43-72.65. A constructive consolidation at our Pivot and point of balance at 71.77 and/or a response to first key support at 70.98 will help favor the bull camp.
Bias: Neutral/Bullish
Resistance: 72.43-72.65***, 73.29-73.37**
Pivot: 71.77
Support: 70.98**, 69.93-70.33***, 69.35-69.53**, 68.93-69.03***, 66.96-67.29***
Gold (August) / Silver (September)
Gold, yesterday’s close: Settled at 1927.1, down 2.4
Silver, yesterday’s close: Settled 23.402, up 0.29
Gold and Silver futures were swiftly bludgeoned after the strong jobs ADP report. A complete meltdown in the Treasury complex yesterday was certainly holding back a rally attempt in Gold and Silver, while fresh selling in the Treasury complex upon the data brings added headwinds. Where are all these jobs coming from? One would think this should correlate to lower wages in tomorrow’s Nonfarm Payroll report. Additionally, ISM Services may have turned a corner in May, and this could be highlighted to show a continued slowdown in the June read at 9:00 am CT. All of this means patience and risk management for Gold and Silver bulls to see this through.
Price action is sharply lower and attempting to stabilize off critical areas of support; 1906.2-1911.6 in Gold and 22.89-22.97 in Silver. Look for a response here that can settle above our Pivot and point of balance to help neutralize this heavy selling ahead of tomorrow’s Nonfarm Payroll report.
Bias: Neutral/Bullish
Resistance: 1927.1-1931.5***, 1936.1**, 1940.3-1943.4**, 1949-1949.6***
Pivot: 1915.4-1917.7
Support: 1906.2-1911.6***, 1900.6-1902.3**
Silver (September)
Resistance: 23.29-23.34***, 23.43-23.49***, 23.98***
Pivot: 23.11-23.15
Support: 22.89-22.97***, 22.48-22.54***, 22.05-22.40****
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