Stock Futures Rebound After Friday’s Inflation Shock

E-mini S&P (March) / E-mini NQ (March)

S&P, last week’s close: Settled at 6049.50, down 56.50 on Friday and 17.75 on the week

NQ, last week’s close: Settled at 21,590.5, down 281 on Friday and up 1.50 on the week

E-mini S&P and E-mini NQ futures were spooked on Friday, not after Nonfarm Payrolls, but after the one-two punch of the hot Michigan survey 1-year Inflation Expectations and threat of tariffs. However, nothing screams politically motivated like the survey’s 1-year inflation expectations from Democrats at 5.1% and from Republicans at 0.0%. On Nonfarm Payroll, January job growth came in below expectations at 143k versus 169k. Although December was revised higher to 307k versus 256k, the baseline for job growth in 2024 was set lower. Despite a surge in Wage Growth at +0.5% m/m versus +0.3% m/m expected, price action remained buoyant through the first 30 minutes of trade. The inflation expectations were a bit of a shock, but maybe E-mini S&P and E-mini NQ futures were looking for an excuse to dip.

E-mini S&P and E-mini NQ futures failed in front of a critical area of resistance. The E-mini NQ tested rare major four-star resistance head on and the E-mini S&P was just shy, as detailed in our levels below. The Sunday night open made sure to clear out all stops, slipping 40 handles in the S&P and right back to unchanged. This often sets the stage for a rally, as we have seen into the U.S. opening bell. We will use our Pivot and point of balance to guide the session, continued price action above…