Tech Slips Ahead of Fed Decision: E-mini S&P & NQ Outlook Amid Rate Cut Projections

Bill Baruch is back at the NYSE for the last time this year for the CNBC Halftime Report to preview today’s Fed meeting and more. Tune in!

 

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

S&P, yesterday’s close: Settled at 6127.25, down 26.75

NQ, yesterday’s close: Settled at 22,314.50, down 93.50

E-mini S&P and E-mini NQ futures slipped yesterday in a very healthy manner. On one hand, the poor breadth in Tech caught up to the tape, on the other hand, this was also profit-taking ahead of today’s Federal Reserve policy decision. According to the CME’s FedWatch Tool there is now a 95.4% probability that the Fed will cut by 25bps at 1:00 pm CT. However, it is more about the committee’s Summary of Economic Projections which is released quarterly and includes the Dot Plot as well as GDP forecasts, and Fed Chair Powell’s press conference beginning at 1:30 pm CT. The market is pricing in one additional 25bps cut through the January and March meeting with a 56.3% probability and three cuts through the end of 2025 with a 58.2% probability (one additional cut after March), sticking the Fed Funds rate where we believe it rightfully should be, at 3.75-4.00%. The question is whether the Fed’s Dot Plot projects a more dovish or hawkish approach. 

We noted yesterday that our more Bullish Bias has been Neutralized slightly, with the Federal Reserve’s policy meeting in focus. Price action in the E-mini S&P slipped below 6136-6146 decisively in early trading yesterday and this opened the door to a ping of major three-star support at 6110.25, aligning with the intraday high in November. The bulls responded by taking price action to the midpoint of the range back to Friday’s high at 6138.25. While there is clear resistance aligning with the gap from Friday’s settlement in the E-mini S&P, we see the bulls regaining the near-term upper hand with continued price action above our Pivot and point of balance at….

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