S&P 500 Futures; Greece Makes It Go up, Greece Makes It Go Down

Yesterday the S&P futures failed to gain traction as divisions over the Greek bailout remain. As the negotiations enter into the 11th hour, the markets are starting to get nervous. Crude oil fell -1.2% as oil supplies shrank, and gold fell -0.30%. While this happened, U.S bonds were rallying for the first time this week.

For the most part it was a quiet day of failed rallies in the S&P 500 futures as they struggled to stay above the 2100 mark.

At the end of the day the Dow Jones futures (YMU15:CBT) fell -178.00 points, or -0.98%, to 17,966.07. The S&P 500 futures (ESU15:CME) closed down 15.62 points, or -0.70%, to 2,108.58, and the Nasdaq futures (NQU15:CME) closed down 37.68 points, or down -0.70%, to 5122.41

Greece talks fell apart after creditors rejected economic procedures proposed by Prime Minister Tsipras in exchange for monetary aid (causing European stocks to slip). This weakness showed up early in the European markets where 11 of 12 markets traded lower in the morning.

The day ended with a large sale imbalance bringing the S&P futures just below 2100.00. The MiM started showing -$200 mill to sell, then $-300mil to sell, and continued to drop down to $-500mil, with the actual 2:45 CT cash imbalance showing MOC Sell $1.1 billion.

The index markets were under selling pressure all day, but the over $1bil for sale on the close was the icing on the cake, with ESM15 dropping from the 2106 level down to 2099.00 on the 2:45 CT futures close.

LACK OF GREEK DEAL WEIGHS ON GLOBAL STOCKS

In Asia 9 out of 11 markets closed lower, and in Europe 10 out of 12 markets are trading higher this morning. Today’s economic calendar includes: Daniel Tarullo speaking, jobless claims, personal income and outlays, Jerome Powell speaks, PMI services flash, EIA natural gas report, Kansas City Fed manufacturing index, 3-Month Bill announcement, 6-Month Bill announcement, 7-Yr Note auction, Fed balance sheet, and money supply.

DEAL OR NO DEAL

Our View: The ES is being held captive by the Greek headlines. Chop higher, chop lower. It’s fade or trade time for the Greeks, and if it’s fade, the spoos will go down. Even if they trade they may still go down, but the question is, for how long and far will they go? It’s all part of the PitBull’s water in the bathtub trade theory where they push the water one way then push it the other way. Our view? Is there more downside potential? Could be, but after a sell off like yesterday, coupled with it being hump day, we would not be surprised the ES “bottoms” early and then sells back off. Remember traders, the S&P is not going up or down sharply. Overall we still think higher, but there are a few things that could hold the ES back. The first is T+3, the second part is the current situation over the Greek bailout agreement, the third part is the end of the 2Q S&P rebalance at the end of the month, and the fourth part is the beginning of the 2Q earnings season.

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• In Asia 9 of 11 markets closed lower: Shanghai Comp. -3.46%, Hang Seng -0.95%, Nikkei -0.46%
• In Europe 10 out of 12 markets are trading higher: DAX 1.02%, FTSE 0.31%, MICEX -0.21% , GD.AT 1.39% at 7:00 am CT
• Fair Value: S&P -8.19, Dow -93.01, Nasdaq -8.31
• Total Volume: 1.15mill ESU and 4001 SPU traded
• Economic calendar: Daniel Tarullo from the Fed speaking, Jobless Claims, Personal Income and Outlays, Jerome from the Fed Powell speaks, PMI Services Flash, EIA Natural Gas report, Kansas City Fed Manufacturing Index, 3-Month Bill Announcement, 6-Month Bill Announcement, 7-Yr Note Auction, Fed Balance sheet, and Money Supply.

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