US STOCKS: Late Equity Roundup Holding Midrange Into Month End
Major stock indexes holding weaker but well off mid-morning session lows with month/half-yr end rebalancing on traders minds: SPX eminis trading -35 (-0.92%) at 3787 vs. 3741.75 low; DJIA -292.05 (-0.94%) at 30745.06; Nasdaq -145.5 (-1.3%) at 11034.86.
- SPX leading/lagging sectors: Utilities outperform (+1.16%) followed by a rebound in Real Estate (+0.35%) and Industrials (+0.04%). Laggers: After making strong gains Mon-Tue, Energy sector (-2.55%) continues to trade weaker w/ Crude (WTI -4.00 at 105.78), Exxon, Marathon, Hess, Phillips 66 all weaker; next up: Materials (-1.41%) followed by Consumer Discretionary (-1.38%) with retailing and autos lagging.
- Dow Industrials Leaders/Laggers: Travelers Insurance (TRV) +2.95 at 168.75, Proctor Gamble (PG) +1.47 at 143.67, Johnson & Johnson (JNJ) +0.74 at 177.73, while Home Depot (HD) pares earlier gains to to 274.74 (+0.87). Laggers: Salesforce (CRM) -6.26 at 164.35, Goldman Sachs (GS) -5.59 at 297.69, Caterpillar (CAT) -4.59 at 178.89.
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US: Generic Ballot Continues To Tighten Despite Poor Biden Approval
The Real Clear Politics Generic Congressional Ballot, which asks voters to make a binary choice between a generic Republican and Democrat candidate, has shown that Democrats continue to close the gap to the GOP.
- According to Real Clear Politics, the current spread is +1.9% to the GOP, the tightest margin since January.
- At the start of May the GOP held a +4.8 advantage.
- The Hill writes: 'Two huge cultural issues — guns and abortion — are suddenly dominating the national conversation just five months out from midterm elections that were expected to be defined by the economy.'
- It is likely that these two issues have stimulated a resurgence of Democrats in the generic ballot.
- The White House is currently engaging in a pivot to the economy with a focus on inflation and energy prices. If this drive is successful it could further energise a Democrat recovery ahead of November's midterms.
Figure 1: Generic Congressional Ballot (Real Clear Politics)
EURJPY TECHS: Approaching Key Resistance Zone
- RES 4: 141.06 High Jun 4 2015 and a key resistance
- RES 3: 140.87 0.50 proj of the Mar 7 - 28 - Apr 5 price swing
- RES 2: 138.32/140.00 High May 9 / High Apr 21 and the bull trigger
- RES 1: 137.98 High May 31
- PRICE: 137.87 @ 15:33 BST May 31
- SUP 1: 135.33/133.93 50-day EMA / Low May 19
- SUP 2: 132.93/66 100-dma / Low May 12 and the bear trigger
- SUP 3: 132.20 50% retracement of the Mar 7 - Apr 21 bull phase
- SUP 4: 131.59 Low Mar 22
EURJPY held close to recent highs on Tuesday, narrowing the gap with first resistance at 138.32 / 140.00 - High May 9 / High Apr 21. The latter is the bull trigger. Key support has been defined at 132.66, the May 12 low. The recovery from this low threatened a recent bearish theme. If the cross clears the 138.83-140.00 zone, this would strengthen bullish conditions and represent an important bullish price event. Initial support is at 135.33, the 50-day EMA.
OUTLOOK: Wednesday Data Calendar, Mfg PMI, ISM, JOLTS, Beige Book, Fed Speak
- US Data/Speaker Calendar (prior, estimate)
- Jun-1 0700 MBA Mortgage Applications (-1.2%, --)
- Jun-1 0945 S&P Global US Mfg PMI (57.5, 57.5)
- Jun-1 1000 Construction Spending MoM (0.1%, 0.6%)
- Jun-1 1000 ISM MFG (55.4, 54.5)
- Jun-1 1000 Prices Paid (84.6, 80.5)
- Jun-1 1000 ISM New Orders (53.5, --)
- Jun-1 1000 ISM Employment (50.9, --)
- Jun-1 1000 JOLTS (11.549M, 11.400M)
- Jun-1 1130 NY Fed Williams open remarks on mon-pol con, text, no Q&A
- Jun-1 1300 StL Fed Bullard on economy, mon-pol, text, Q&A
- Jun-1 1400 Beige Book
