Jobs and Tariff Day Rip

Index Futures Net Changes and Settlements:

Foreign Markets, Fair Value and Volume:

• In Asia 10 out of 11 markets closed higher: Shanghai Comp +2.49%, Hang Seng +1.32%, Nikkei +1.21%
• In Europe 12 out of 13 markets are trading higher: CAC +0.25%, DAX -0.02%, FTSE +0.28%
• Fair Value: S&P +2.25, NASDAQ +17.72, Dow -10.40
• Total Volume: 1.27mil ESU & 451 SPU traded in the pit

Today’s Economic Calendar:

Today’s economic calendar includes Neel Kashkari Speaks 9:10 AM ET, TD Ameritrade IMX 12:30 PM ET, and Consumer Credit 3:00 PM ET.

S&P 500 Futures: Fridays Face Ripping Rally

Friday, the Shanghai Composite closed up 0.49%, and the Stoxx 600 was down 0.2% at midday. The S&P 500 futures had an overnight Globex trading range of 2731.25 to 2747.50. The Globex low was made 15 minutes before the jobs report, and at 7:43 CT the ES had traded up to 2744.50. The first print on the 8:30 CT futures open was 2738.50, followed by a down tick to 2734.50 at 8:34, and by 10:30 had traded all the way up to 2758.50, up +20 handles on the day and up +27 handles from the Globex low.

After a small pullback the ES traded up to 2764.00 at 11:09. It was one buy program after another with no let up. After another a few more 3 to 4 handle pullbacks the futures traded up to 2765.00 and pulled back to 2760.00, the largest down move since the early drop after the open.

The final 90 minutes saw the MiM build strongly to the sell side, but the ES continued the day’s rally, pushing up to a new high of day 2766.25 just before 2:30. But then the MiM, which was close to 2 billion to sell, began to drag down the S&P’s, pulling them down to 2756.75, a 9.50 handle pullback, before rallying back into the cash close. The 3:00 print was 2761.75 before the index settled the day at 2762.50, up +24.00 handles, or +0.88%.

In the end the China tariff news was played out. The ES was so oversold that when it finally was released it ended up a big buy. The jobs number played a large part, but the final announcement of the tariffs and jobs data showed the number of job seekers rising in June and U.S. employers adding to payrolls for the 93rd consecutive month—extending what has been the  longest continuous jobs expansion on record set off a short squeeze.

The amazing part about the trade was the total lack of any pullbacks, other than the 7 handles sell off after the open, the largest pullback until late in the day was 4 to 5 handles. In terms of the days overall volume, 1.27million ES traded, but like we said, it really felt like a short squeeze over new buying.

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