S&P 500 Hits Record High as Markets Digest Fed and Election Outcomes
S&P 500 Hits Record High as Markets Digest Fed and Election Outcomes
Also, 30-year T-bond, copper, crude oil and Australian dollar futures
- S&P 500 E-mini futures (/ES): +0.18%
- 30-year T-bond futures (/ZB): +0.72%
- Copper futures (/HG): -2.3%
- Crude oil futures (/CL): -2.25%
- Australian dollar futures (/6A): -0.9%
The busiest, most consequential stretch of the calendar is now in the rearview mirror. From earnings season to macro data to the U.S. presidential election to the Federal Open Market Committee (FOMC) meeting, the past two weeks have constituted a significant turning point for financial markets. Today, volatility continues to retreat in equity markets, allowing the S&P 500 to discover a new all-time high. Bonds are showing further signs of relief now that the Federal Reserve has indicated its willingness to curtail the rate cut cycle if needed. The U.S. dollar is mostly lower, with the Japanese yen among the leaders.
Symbol: Equities | Daily Change |
/ESZ4 | +0.18% |
/NQZ4 | -0.08% |
/RTYZ4 | +0.12% |
/YMZ4 | +0.25% |
U.S. equity futures moderated this morning as a week of strong gains moves to a close. Traders priced in a Trump administration that will likely bring a looser regulatory environment. S&P 500 futures (/ESZ4) were on pace for the best weekly gain since October 2023. Nvidia (NVDA) joins the Dow Jones Industrial Average today, along with Sherwin Williams (SHW).
Strategy: (41DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 5950 p Short 5960 p Short 6075 c Long 6080 c | 60% | +275 | -225 |
Short Strangle | Long 5950 p Short 5960 p | 44% | +7025 | x |
Short Put Vertical | Long 5950 p Short 5960 p | 60% | +162.50 | -337.50 |
Symbol: Bonds | Daily Change |
/ZTZ4 | 0% |
/ZFZ4 | +0.07% |
/ZNZ4 | +0.2% |
/ZBZ4 | +0.72% |
/UBZ4 | +1.03% |
Treasuries are looking at small gains for the week after seeing some upside for a second day today. The 30-year T-bond futures (/ZBZ4) bounced after hitting the lowest level traded since July. Earlier this week, the Treasury’s 30-year bond auction saw slightly stronger-than-average demand, especially from direct bidders.
Strategy (49DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 116 p Short 117 p Short 120 c Long 121 c | 29% | +671.88 | -328.13 |
Short Strangle | Short 117 p Short 120 c | 54% | +2765.63 | x |
Short Put Vertical | Long 116 p Short 117 p | 66% | +328.13 | -671.88 |
Symbol: Metals | Daily Change |
/GCZ4 | -0.28% |
/SIZ4 | -0.66% |
/HGZ4 | -2.3% |
China unveiled new stimulus measures following the National People’s Congress, but copper futures (/HGZ4)—which are usually seen as a proxy for China’s economy—is telling markets that it may not be enough. Growth in China has been weak, with third-quarter GDP coming in at 4.6%—the slowest since last March. The dollar’s gains this week are likely also posing a headwind for the commodity.
Strategy (48DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 4.29 p Short 4.3 p Short 4.48 c Long 4.49 c | 19% | +212.50 | -37.50 |
Short Strangle | Short 4.3 p Short 4.48 c | 53% | +5325 | x |
Short Put Vertical | Long 4.29 p Short 4.3 p | 58% | +125 | -125 |
Symbol: Energy | Daily Change |
/CLZ4 | -2.25% |
/HOZ4 | -1.79% |
/NGZ4 | +1.41% |
/RBZ4 | -1.99% |
Crude oil futures (/CLZ4) fell nearly 3% this morning, but prices remain higher for the week as Monday’s and Tuesday’s price action keep the commodity afloat. Traders started the week on a solid footing, with news that OPEC+ would push back production cut rollbacks. Meanwhile, Hurricane Rafael is causing shut-ins for production across the Gulf of Mexico. As of yesterday, about 22% of oil production is offline, according to the Bureau of Safety and Environmental Enforcement (BSEE).
Strategy (38DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 68 p Short 68.5 p Short 72.5 c Long 73 c | 19% | +380 | -120 |
Short Strangle | Short 68.5 p Short 72.5 c | 51% | +4740 | x |
Short Put Vertical | Long 68 p Short 68.5 p | 56% | +220 | -280 |
Symbol: FX | Daily Change |
/6AZ4 | -0.9% |
/6BZ4 | -0.25% |
/6CZ4 | -0.28% |
/6EZ4 | -0.34% |
/6JZ4 | +0.21% |
Australian dollar futures (/6AZ4) reversed most of yesterday’s gains, falling nearly 1% this morning. Traders remain concerned about a Trump administration increasing tariffs on China, which would likely result in a trade war that resembles what happened during the first Trump administration. Stimulus efforts in China failed to invigorate any buying from traders, as concerns about the future weigh on sentiment.
Strategy (56DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 0.65 p Short 0.655 p Short 0.67 c Long 0.675 c | 31% | +320 | -180 |
Short Strangle | Short 0.655 p Short 0.67 c | 52% | +1190 | x |
Short Put Vertical | Long 0.65 p Short 0.655 p | 68% | +160 | -340 |
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx
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