Where we are: The Dow Jones cash index is currently trading at 51033, up 259 points, or 0.51%, having already probed as high as 51094. Futures are printing 51233, up 184 points. The overnight range saw a low of 50999 and a high of 51382. The Dow continues to build on Friday’s gains, poised to test fresh all-time highs.
What’s driving it: The underlying bid in US equities continues, supported by positive sentiment from the tech sector detailed in analyst calls, even as broader macro headwinds persist. The 2s10s spread is widening, currently at 0.47%, suggesting some steepening of the curve. With no domestic data prints yet this morning, the tape is likely to continue tracking risk until this morning’s ISM data release. Powell’s planned speech tonight is unlikely to move the dial.
- The ISM Manufacturing PMI at 10:00 ET is expected to show continued expansion, printing at 53.3 vs a prior of 52.7.
- ISM Manufacturing Prices, also at 10:00 ET, is expected to edge higher to 85.3 from 84.6, likely adding to inflation concerns.
- Net non-commercial positioning is moderately short the Dow at -9,324 contracts. A strong bid today could prompt a squeeze.
NY session focus: All eyes will be on the 10:00 ET release of the ISM Manufacturing PMI and ISM Manufacturing Prices. A stronger-than-expected print on the prices paid component could weigh on risk assets and see the Dow pare gains. Key levels to watch are resistance at the intraday high of 51382 and support at 50999. Long Dow remains the working trade, but is vulnerable to an inflation surprise. Powell speaks again at 20:30 ET. The pain trade here is a sharp risk-off move sparked by unexpected macro tightening, forcing shorts to cover.