S&P 500 Losses Mount Ahead of FOMC
S&P 500 Losses Mount Ahead of FOMC
Also, 30-year T-note, copper, crude oil and Australian dollar futures
- S&P 500 e-cote futures (/ZB): -0.35%
- Copper futures (/HG): -0.58%
- Crude oil futures (/CL): +2.84%
- Australian dollar futures (/6A): -0.35%
U.S. equity markets opened lower for the second day in a row to add to a lackluster start of the 2024 trading year.
Bond yields and the dollar rose ahead of key data points on the U.S. labor market that could interest rate bets. Today will bring the Federal Open Market Committee’s (FOMC) most recent minutes across the wires.
Symbol: Equities | Daily Change |
/ESH4 | -0.51% |
/NQH4 | -0.53% |
/RTYH4 | -1.58% |
/YMH4 | -0.44% |
The S&P 500 (/ESH4) opened about 0.5% lower following weak performances overnight in European and Asian equity markets. Traders are reassessing Federal Reserve interest rate bets and today’s FOMC minutes due this afternoon may nudge those bets ahead of Friday’s non-farm payrolls report, which may prove even more influential to markets. However, with the market already expecting a more dovish outcome than the Fed’s forecast, there isn’t much room for improvement, and that may see bearish sentiment continue.
Strategy: (45DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 4,710 p Short 4,720 p Short 4,810 c Long 4,820 c | 18% | +387.50 | -112.50 |
Long Strangle | Long 4,710 p Long 4,820 c | 47% | x | -5,500 |
Short Put Vertical | Long 4,710 p Short 4,720 p | 62%% | +162.50 | -337.50 |
Symbol: Bonds | Daily Change |
/ZTH4 | -0.07% |
/ZFH4 | -0.19% |
/ZNH4 | -0.29% |
/ZBH4 | -0.35% |
/UBH4 | -0.80% |
Treasury yields rise
Treasuries are falling and yields are rising for a second day, pressuring other asset classes. Today will see the first Treasury auction of the year, with 17-week bills leading the schedule. However, the long end of the curve is under the most pressure, with 30-year Treasury futures (/ZBH4) down about 0.5% this morning, putting its yield at 4.123%. The FOMC minutes may move the needle but it's likely to have a greater effect on the policy-sensitive short end of the curve.
Strategy (52DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 120 p Short 121 p Short 125 c Long 126 c | 30% | +671.88 | -328.13 |
Long Strangle | Long 120 p Long 126 c | 41% | x | -2,687 |
Short Put Vertical | Long 120 p Short 121 p | 69% | +328.13 | -671.88 |
Symbol: Metals | Daily Change |
/GCG4 | -1.31% |
/SIH4 | -2.98% |
/HGH4 | -0.58% |
Copper futures fall
Copper futures (/HGH4) are down nearly 1% in the metal’s fourth consecutive down day. That has nearly wiped out December’s gains. Mounting economic concerns out of metal-hungry China are weighing on the industrial metal, which experts often see as a barometer of global economic health. U.S. and Chinese purchasing managers’ indexes are due today and tonight and may change the metal’s direction if the data impresses.
Strategy (54DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 3.78 p Short 3.79 p Short 3.92 c Long 3.93 c | 19% | +200 | -50 |
Long Strangle | Long 3.78 p Long 3.93 c | 47% | x | -3,750 |
Short Put Vertical | Long 3.78 p Short 3.79 p | 60% | +112.50 | -137.50 |
Symbol: Energy | Daily Change |
/CLG4 | +2.84% |
/HOG4 | +2.19% |
/NGG4 | +4.83% |
/RBG4 | +1.61% |
Crude oil rises
Crude oil future (/CLG4) rose more than 2% Wednesday morning as supply concerns moved back into the fold ahead of several data points that will inform the demand side.
For now, oil prices are up on a supply disruption in Libya’s oil fields, which might impact up to a quarter of a million barrels per day of oil out of the El Sharara field. Elsewhere, energy prices are climbing, with natural gas futures (/NGH4) up about 5%.
Strategy (48DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 70 p Short 70.5 p Short 75 c Long 75.5 c | 23% | +390 | -110 |
Long Strangle | Long 70 p Long 75.5 c | 41% | x | -4,640 |
Short Put Vertical | Long 70 p Short 70.5 p | 59% | +190 | -290 |
Symbol: FX | Daily Change |
/6AH4 | -0.35% |
/6BH4 | +0.26% |
/6CH4 | -0.11% |
/6EH4 | -0.10% |
/6JH4 | -0.67% |
Australian dollar falls
The risk-sensitive Australian dollar (/6AH4) fell overnight with the losses continuing into the Wall Street trading session.
Economic concerns for Chinese growth are diminishing the currency’s appeal and with several more data points expected this week, those concerns may deepen if data points to further slowdowns.
Strategy (65DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 0.66 p Short 0.665 p Short 0.685 c Long 0.69 c | 31% | +320 | -180 |
Long Strangle | Long 0.66 p Long 0.69 c | 44% | x | -1,080 |
Short Put Vertical | Long 0.66 p Short 0.665 p | 71% | +160 | -340 |
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro.
Trade with a better broker, open a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies.
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on tastytrade.com/disclosures.
tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.
tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.
tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.
© copyright 2013 - 2024 tastylive, Inc. All Rights Reserved. Applicable portions of the Terms of Use on tastylive.com apply. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastylive’s podcasts as necessary to view for personal use. tastylive was previously known as tastytrade, Inc. tastylive is a trademark/servicemark owned by tastylive, Inc.