Nasdaq 100 Futures Churn After Micron Earnings, U.S. Durable Goods
Nasdaq 100 Futures Churn After Micron Earnings, U.S. Durable Goods
Also 30-year T-Bond, Silver, Crude Oil, and Japanese Yen Futures
Nasdaq 100 E-mini futures (/NQ): -0.02%
30-year T-note futures (/ZB): +0.16%
Silver futures (/SI): +0.57%
Crude oil futures (/CL): +1.17%
Japanese yen futures (/6J): +0.13%
U.S. markets are shaking off weakness today after a bout of softer than expected U.S. economic data revived Federal Reserve interest rate cut odds, which had taken a step backward yesterday. Weekly U.S. jobless claims remain elevated, while May U.S. durable goods orders suggested weakness in consumption. To the latter point, the final 1Q’ 24 U.S. gross domestic produce (GDP) report confirmed a slowdown by the U.S. consumer. U.S. equity futures are climbing back, while bond yields have turned lower on the day. Elsewhere, all eyes remain on foreign exchange (FX) markets as the Japanese yen challenges its weakest level since October 1986.
Symbol: Equities | Daily Change |
/ESU4 | -0.02% |
/NQU4 | -0.05% |
/RTYU4 | +0.4% |
/YMU4 | -0.19% |
Nasdaq futures (/NQU4) rallied back this morning as mixed economic data and a series of earnings left traders more confident about the Fed interest rate cut cycle. Walgreens Boots Alliance (WBA) fell more than 20% in pre-market trading after the company cut its profit outlook. Micron (MU) fell 6% ahead of the bell after reporting in-line guidance.
Strategy: (50DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 18750 p Short 19000 p Short 21250 c Long 21500 c | 63% | +1270 | -3730 |
Short Strangle | Short 19000 p Short 21250 c | 69% | +4615 | x |
Short Put Vertical | Long 18750 p Short 19000 p | 83% | +695 | -4305 |
Symbol: Bonds | Daily Change |
/ZTU4 | +0.04% |
/ZFU4 | +0.07% |
/ZNU4 | +0.09% |
/ZBU4 | +0.16% |
/UBU4 | +0.22% |
Bond prices rose amid sustained elevation in jobless claims for the U.S. and an overall weaker durable goods orders report. Fed interest rate cut odds for September increased, retracing some of yesterday's losses on the heels of Fed Gov. Michelle Bowman's commentary. The 30-year T-bond futures (/ZBU4) rose 0.26% at the New York open, pushing down the underlying yield from a one-week high. The Treasury will auction off four- and eight-week bills today. Tomorrow’s inflation data will be key to the direction of the bond markets.
Strategy (57DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 113 p Short 114 p Short 124 c Long 125 c | 62% | +296.88 | -703.13 |
Short Strangle | Short 114 p Short 124 c | 70% | +1156.25 | x |
Short Put Vertical | Long 113 p Short 114 p | 86% | +140.63 | -859.63 |
Symbol: Metals | Daily Change |
/GCQ4 | +0.84% |
/SIU4 | +0.57% |
/HGU4 | -0.5% |
Silver (/SIU4) found some upside after hitting a six-week low yesterday. A softer dollar and lower Treasury yields are helping to support the precious metal, but its technical structure continues to weaken. A break below 29 could threaten further losses for the metal. Metals traders are focused on tomorrow’s inflation data, which could help silver extend its gains if the numbers support a softer outlook on interest rates.
Strategy (61DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 25.5 p Short 26 p Short 32.5 c Long 33 c | 67% | +570 | -1930 |
Short Strangle | Short 26 p Short 32.5 c | 73% | +2915 | x |
Short Put Vertical | Long 25.5 p Short 26 p | 86% | +245 | -2255 |
Symbol: Energy | Daily Change |
/CLQ4 | +1.17% |
/HOQ4 | +1.54% |
/NGQ4 | -4.64% |
/RBQ4 | +1.09% |
Crude oil prices (/CLQ4) rose today despite yesterday’s inventory report that was mostly bearish for the commodity. The risk of geopolitical uncertainties in the Middle East is helping to underpin the commodity as Israel prepares for an operation in southern Lebanon. A broadening conflict there could disrupt oil supplies from the region.
Strategy (49DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 73 p Short 74 p Short 88 c Long 89 c | 63% | +250 | -750 |
Short Strangle | Short 74 p Short 88 c | 70% | +1430 | x |
Short Put Vertical | Long 73 p Short 74 p | 82% | +140 | -860 |
Symbol: FX | Daily Change |
/6AU4 | +0.23% |
/6BU4 | +0.27% |
/6CU4 | +0.14% |
/6EU4 | +0.38% |
/6JU4 | +0.13% |
Japanese Yen futures (/6JU4) are slightly stronger following yesterday’s losses. Japanese Finance Minster Shunichi Suzuki commented that officials will act when needed and are watching the currency. Despite threats of intervention, the path of least resistance for the yen remains lower as the U.S. yield premium vs. Japanese counterparts remains elevated.
Strategy (43DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 0.00605 p Short 0.0061 p Short 0.0065 c Long 0.00655 c | 64% | +162.50 | -462.50 |
Short Strangle | Short 0.0061 p Short 0.0065 c | 71% | +562.50 | x |
Short Put Vertical | Long 0.00605 p Short 0.0061 p | 87% | +75 | -550 |
Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx
Thomas Westwater, a tastylive financial writer
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