The tech sector continues to struggle, and expectations of an interest rate cut in March have dropped slightly. Energies are outperforming due to growing tensions in the Middle East.
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Good afternoon, traders. It’s Chris Chavez with Blue Line Futures and it’s your daily midday market minute. Tech struggles and energy’s outperform here today. But before we get to it, if you’re watching this video like it, subscribe if you’re on our website, there’s also a link to direct you to YouTube and you can subscribe that way. We’d love for you to follow us.
We would love for you to help us build our following. So it’s the second day of the trading year and tech is continuing to struggle. We’re seeing energy’s utilities outperform here today. Health care also still relatively outperforming and it’s still looking like the market is shifting. You know, this this the sentiment a little bit from value or from growth, rather, to value.
So I think this is an important thing to pay attention to. You know, you probably seeing some tax conscious selling as well. You know, people really taking the big winners from 2023 and now putting some of that cash to work in some of the value areas in the market like health care, utilities. And we’re looking at energies here today, relatively outperforming really the big outperformer today.
Energy’s in positive territory, natural gas positive by about two and a half percent. Crude oil up over a two and a half percent as well, seeing some growing tensions in the Middle East, you know, some terrorist attacks in Iran. So definitely not something you want to see, but, you know, is lifting crude oil energy prices here today, building in a little bit of a risk premium into the energy complex.
Did get some data here this morning. US asymptomatic came in slightly higher than estimates, which is good. We got a print of 47 for ten versus 47 and 1/10 expected and jobs did come in lower than expectations. Got a print of 8.79 million for the month of November versus expectations of 8.85 million. So you’re continuing to see jobs contract a little bit, the lowest level since November of 2021, you know, of continuing claims or nonfarm starts to look a little bit weak.
That could really be the concern because, you know, continuing claims, initial claims coming in lower than expected with not enough jobs to replace that. That gap there is really what could start to show a little bit of weakness in the labor market and markets could get spooked by that. You know, it’s not necessarily that you want to see some of this data come in lower because interest rate cuts are already priced in at this point.
You don’t want to see tremendous amount of weakness. Now, to see me Fed watch tool pricing in about a 72% chance of a cut In the last week. Expectations were as high as 88%, and that’s for the month of March. So you’re seeing that what you’re seeing the markets walk that back a little bit, but there’s not a lot of data that’s really dictating that.
So I do think that it’s maybe just the markets saying, hey, maybe we are getting ahead of ourselves or pricing in a little bit of a premium if these jobs numbers do come in above estimates. So definitely something to pay attention to. We’ll get Atlanta Fed GDP now later today, 12 Central Standard Time, the Fed meeting minutes as well at 1 p.m., Central Standard Time.
Really important there. Now, we’re going to get more economic data tomorrow. ADP nonfarm will also get continuing in initial claims and S&P global PMI looking at some of these technical support for the S&P as we’re continuing to slide here a bit today. Three star level to pay attention to 4749 and half to 4755 and a half, a two star level for the Nasdaq, not as significant, 16 540 to a two star resistance level for crude, 7355 to 7364.
You want to see a breaking close above that level to see more momentum and then maybe try to retest 75 bucks and a gold for star support level 20, 29 and 2/10 to 2034 if you have any questions, reach out to our Trade Desk. Trade desk, We’re here for you. Remember, futures trading involves substantial risk of loss is not suitable for all investors.
Chris Chavez, Market Strategist