Tech Rebound and Strong Earnings Propel E-mini S&P to New Highs: Can the Momentum Hold?

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

S&P, yesterday’s close: Settled at 5887.00, up 24.25

NQ, yesterday’s close: Settled at 20,349.50, up 7.50

Stocks are snapping back from Tuesday’s wiggle. Although chips were the culprit, some helped lead the charge yesterday. In fact, NVDA finished yesterday’s session back in the positive on the week and MU traded to a fresh high although the SMH finished -4.3% on the week. Additional tailwinds came overnight after Taiwan Semiconductor blew away earnings expectations and was able to increase margins by 4.6%. The company noted ‘demand far exceeds its ability to supply,’ and the CEO added this is just the “beginning”. The stock has gained as much as 10% ahead of the U.S. opening bell. While NVDA is up 3% premarket, the TSM move has done much more for the space broadly, helping SMH rebound by 3.5%.

Retail Sales for September also came in much stronger than expected with Core at +0.5% m/m versus +0.1% expected, despite August being revised from +0.1% to +0.2% and creating a higher base comparison for that +0.5%. Initial Jobless Claims were right in line with expectations at 241k, but last week was revised from 258k to 260k. Also, fresh Philly Fed Manufacturing for October was strong at 10.3 versus 4.2 and comes on the heels of a dismal NY Empire Manufacturing read Tuesday.

The ECB cut rates by 25bps unanimously, as expected and President Lagarde is due to speak.

The E-mini S&P has set a fresh record high ahead of the opening bell. We have seen many higher opens have a failed reception intraday, so traders want to keep a pulse on the first hour of trade. Tech is the leader, and the E-mini NQ is trading into Tuesday’s opening bell range which brings key support at…

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