Looking to the Futures

Equity markets continued their slide yesterday as bond yields push higher. Chip stocks contributed to the sell off on Thursday with earnings disappointing investors. President Trump attempted to ease concerns on the effects of tariffs on the US economy with his comments yesterday afternoon, but equities responded with a sharp sell off. US economic data came in mixed this week. 

Interest rates rallied on Thursday putting downside pressure on equity markets. The 10-year Treasury note yield rose +5.8 bp to 4.336%. The German bund yield increased +9.0 bp to 2.883%, its highest level in nearly a year and a half. On Wednesday the German government announced plans to amend its constitution to exempt defense and security outlays from limits on fiscal spending, leading to the increase in yields. The 10-year UK gilt yield increased +3.6 bp to 4.718%

Chip stocks were major contributors to the sell off yesterday with Marvel Technology dropping -18% after disappointing revenue forecasts following Wednesday's earnings. MRVL beat on the top line announcing EPS of $0.60 against estimates of $0.59 but issued Q1 revenue forecast of $1.88 billion, below the estimates of up to $2 billion. Mongo DB closed nearly -25% lower after they forecasted 2026 adjusted EPS of $2.44 to $2.62, well below the consensus estimates of $3.37. The Magnificent Seven stocks weighed on markets yesterday with TLSA down -5%, NVDA -6% lower, AMZN and META dropping -4%. 

President Trump's administration imposed 25% tariffs on Canada and Mexico and doubled the tariff on Chinese goods from 10% to 20% on Tuesday leading to an influx of selling pressure in equity markets. US Commerce Secretary Lutnick spoke this week and indicated President Trump is likely to defer tariffs on Canada and Mexico for all goods and services compliant with the United States-Mexico-Canada Agreement. Secretary Lutnick’s comments provided a brief reprieve from selling but was not able to squelch additional downside pressure throughout the day. 

Philadelphia Fed President Harker commented on his concerns with the decline in price growth and indicated the Fed may not be able to reach the 2% target. He cautioned of the downside risk as business and consumer confidence is starting to wane. The CME FedWatch tool shows a 93% chance of rates going unchanged at the March 19^th meeting. 

US economic data came in mixed on Thursday with weekly initial unemployment claims falling -21,000 to 221,000. This showed a stronger labor market than the expected unemployment claims of 233,000. US Q4 nonfarm productivity was revies upward to 1.5% from 1.2% and Q4 unit labor costs were revised down from 3.0% to 2.2%. The US trade deficit came in at a record -$131.4 billion, greater than the expected -$128.8 billion.

Looking at the daily chart for the E Mini S&P 500 March 2025 (/ESH25) contract we can see the selling pressure has continued as the contract closed below the 200-Day Simple Moving Average for the first time in over a year-and-a half. We have seen significantly higher volume over the past two weeks as the as the contract traded below short-term and long-term moving averages. 

The Daily Technical Analysis from Hightower Research has support levels at 5787.13 and 5709.57 with resistance levels at 5905.87 and 5947.06.

According to the CFTC Commitment of Traders Report released February 25^th  asset managers decreased their long position by -6,721 contracts and increased their short position by +23,158 contracts. Managed money traders are net long 921,140 contracts.

The 14-Day Relative Strength Index at 32.82% indicates the contract has moved into oversold territory.

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Avg. Hourly Earnings 8:30 AM ET

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Nonfarm Payrolls 8:30 AM ET

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