E-Minis Firmer, Geopolitics, Apple China Sales & Chinese Headwinds Eyed

A lack of meaningful weekend escalation in the Israeli-Hamas conflict and U.S. efforts to contain the spill over through the wider Middle East region has provided some background support for e-minis in pre-cash trade.

• That leaves the major contracts running 0.4-0.7% firmer ahead of the NY cash equity open, with the DJIA outperforming and the NASDAQ 100 lagging.
• Pre-markets headwinds for Apple (off worst levels, indicated 0.5% lower, on the back of reports re: soft Chinese demand for the new iPhone), coupled with the move higher in Tsy yields, have combined to promote underperformance for the NASDAQ contract.
• Elsewhere, Microsoft was named Piper Sandler’s highest conviction large cap name for the remainder of ’23 (indicated +0.8% higher pre-market).
• Also note that Chinese equities struggled on Monday, given adjustments to Friday’s geopolitical angst and worry re: fresh U.S. restrictions for the Chinese semiconductor space, but e-minis have managed to shrug that off.
• Technically, S&P 500 e-minis found resistance last week at 4,430.50. The pullback means that - for now - resistance at the 50-day EMA, remains intact. A clear breach of this average is required to strengthen bullish conditions. Such a move would open 4,496.25, trendline resistance drawn from the Jul 27 high. A deeper pullback would refocus attention on 4,235.50, the Oct 4 low and bear trigger.