S&P 500 Aims to Close Week at Record Highs After Investors Digest Fed Move
S&P 500 Aims to Close Week at Record Highs After Investors Digest Fed Move
Also 10-year T-Note, Gold, Crude Oil, and Euro Futures
- S&P 500 E-mini futures: +0.34%
- 10-year T-Note futures (/ZN): -0.11%
- Gold futures (/GC): +0.52%
- Crude Oil futures (/CL): -0.79%
- Euro futures (/6E): -0.27%
It was a risk-on tone on Wall Street Friday morning, with equity indexes tracking weekly gains following the Fed’s interest rate decision this week. The Wall Street Journal reported that the Trump administration is weighing a move to increase factory production by using funds from an investment fund that was part of the trade deal with Japan. So far, stocks are bucking a seasonal trend that usually sees prices fall in September. Traders see a looser monetary environment as supportive for corporate earnings, which should keep the rally going barring a notable decline in the labor market or a significant increase in inflation.
| Symbol: Equities | Daily Change |
| /ESZ5 | +0.34% |
| /NQZ5 | +0.39% |
| /RTYZ5 | -0.25% |
| /YMZ5 | +0.09% |
Yesterday’s move higher in S&P 500 futures (/ESZ5) failed to hold intraday gains above Tuesday’s swing high, but prices are trading above the level this morning as bulls advance for another positive week of trading. FedEx (FDX) rose 3% in early trading after the shipping company reported positive earnings results. Apple (AAPL) rose over 1% as preliminary reports showed strong demand for iPhone 17s. Darden Restaurants (DRI), the owner of Olive Garden, fell over 3% after reporting disappointing quarterly figures. Tesla (TSLA) rose over 2% to put the stock on track for its third weekly gain to trade at the highest level since January.
| Strategy: (42DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
| Iron Condor | Long 6600 p Short 6625 p Short 6775 c Long 6800 c | 20% | +900 | -350 |
| Short Strangle | Short 6625 p Short 6775 c | 48% | +8300 | x |
| Short Put Vertical | Long 6600 p Short 6625 p | 62% | +337.50 | -912.50 |
| Symbol: Bonds | Daily Change |
| /ZTZ5 | +0.00% |
| /ZFZ5 | -0.04% |
| /ZNZ5 | -0.11% |
| /ZBZ5 | -0.24% |
| /UBZ5 | -0.26% |
Despite the Fed’s cut earlier this week, Treasuries have cooled off after rising into the meeting. Traders likely priced in much of the move ahead of the Fed, with profit-taking likely weighing down sentiment for the time being. Treasury Department data showed that foreign holdings of Treasuries rose to a record high in July despite selling by China. Foreign demand for Treasuries has been in doubt all year amid fiscal concerns, but the data shows that it is likely an overblown concern. Overall, it could help bolster Treasury markets if the buying continues.
| Strategy (35DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
| Iron Condor | Long 112 p Short 112.5 p Short 113.5 c Long 114 c | 33% | +312.50 | -187.50 |
| Short Strangle | Short 112.5 p Short 113.5 c | 54% | +921.88 | x |
| Short Put Vertical | Long 112 p Short 112.5 p | 71% | +187.50 | -312.50 |
| Symbol: Metals | Daily Change |
| /GCZ5 | +0.52% |
| /SIZ5 | +1.33% |
| /HGZ5 | +0.29% |
Gold prices (/GCZ5) were looking at a fifth weekly gains after prices rose 0.52% Friday morning. Dollar strength earlier this week posed a headwind to prices, but bullion managed to move higher against a stronger dollar into the end of the week. Traders are holding prices above the 9-day exponential moving average, which has supported prices since late August.
| Strategy (39DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
| Iron Condor | Long 3650 p Short 3655 p Short 3745 c Long 3750 c | 20% | +390 | -110 |
| Short Strangle | Short 3655 p Short 3745 c | 56% | +10080 | x |
| Short Put Vertical | Long 3650 p Short 3655 p | 62% | +220 | -280 |
| Symbol: Energy | Daily Change |
| /CLX5 | -0.79% |
| /HOV5 | -1.05% |
| /NGV5 | -1.05% |
| /RBV5 | -1.27% |
Crude oil prices (/CLX5) fell on Friday as traders weighed marked demand following this week’s interest rate cut from the Federal Reserve. For the week, prices remained in positive territory at about +0.4%, putting the commodity on track for a second weekly gain. U.S. government data showed that distillate inventories rose more than expected last week, further pressuring demand side expectations as OPEC looks set to raise production again. Still, oil prices remain rangebound from their recent swing highs and lows.
| Strategy (59DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
| Iron Condor | Long 60.5 p Short 61 p Short 65 c Long 65.5 c | 21% | +370 | -130 |
| Short Strangle | Short 61 p Short 65 c | 51% | +3980 | x |
| Short Put Vertical | Long 60.5 p Short 61 p | 57% | +210 | -290 |
| Symbol: FX | Daily Change |
| /6AZ5 | -0.37% |
| /6BZ5 | -0.52% |
| /6CZ5 | +0.01% |
| /6EZ5 | -0.27% |
| /6JZ5 | -0.01% |
Euro futures (/6EZ5) fell 0.27% Friday morning, which kept the currency in positive territory for the week. However, prices failed to maintain momentum this week after dropping before reaching 1.20. The European Central Bank (ECB) left interest rates unchanged last week. Traders remain uncertain if the ECB will continue to cut rates later this year. The eurozone has seen economic growth slow after a strong start to the year, but so far, it looks like recession will be avoided.
| Strategy (49DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
| Iron Condor | Long 1.17 p Short 1.19 c Long 1.195 c | 27% | +437.50 | -187.50 |
| Short Strangle | Short 1.175 p Short 1.19 c | 54% | +2025 | x |
| Short Put Vertical | Long 1.17 p Short 1.175 p | 69% | +237.50 | -387.50 |
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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