Another Round Number Breached In S&P 500 E-Minis

The latest leg higher in the rally in S&P 500 e-minis saw the contract breach the 4,600 mark, with continued short covering & capital redeployment talk doing the rounds, while “earnings optimism” is also cited by many, despite disappointing figures from Goldman Sachs. The largest sell program of the day (752 names) has just knocked the space off best levels, allowing the S&P 500 e-mini to move back below 4,600.

• The latest global fund manager survey from Bank of America (released late yesterday) noted that most expect a mild U.S. recession to begin in Q422/Q123, although a rising 19% see no recession before 2025, while the % of those with a "soft landing" (68%) forecast far outweighs those looking for a "hard landing" (21%);
• More granularly, EPS expectations within the survey are the least pessimistic since Feb '22, along with a notable mark down in those that are underweight U.S. equities (with the survey now indicating that 10% are underweight vs. the 25% seen last month, the most modest level of underweighting observed this year).
• Technically, the breach of 4,600 allows bullish focus to move to the 29 Mar ’22 high (4,631.00).