Today is ES rollover day, the ES December 2019 contract is now the front month.  The ES September 2019 will continue to trade the most volume through sometime tomorrow morning.  A worksheet for each contract is provided today.

After China said they would exempt some US goods from tariffs, Trump tweeted late yesterday that the US would delay tariffs on some China-made goods as a gesture of good will as both sides prepare for the next rounds of trade talks which are pushed to October.

The ECB is expected to announce @ 7:45am ET and explain at a 8:30am ET press conference a major stimulus package with possibly deeper negative interest rates and a restart of quantitative easing.

Privately held Purdue Pharma and maker of OcyContin has reached a tentative settlement with 27 states for $10B to $12B.  The Sackler family will give up control, declare bankruptcy, and turn Purdue Pharma into a for-profit trust.  The proceeds will go to the plaintiffs.  An additional 16 state attorney generals have not agreed to the tentative settlement.

Oracle (ORCL) is up premarket after the database company missed expectations and co-CEO Mark Hurd announced a medical leave of absence.  Executive CEO Larry Ellison will step up to fill the void during Hurd’s absence.  Earnings include AVGO, KR, and DLTH.

The economic calendar focus is the PPI numbers and Unemployment Claims @ 8:30am ET.  Volatility continues to settle in around the 30 point ES 5-day ATR.  The ECB announcement could move the markets this morning.  Size bias is long into the ECB announcement.

ES Sep 2019 contract

ES Dec 2019 contract

A Fed rate course reversal???  St. Louis Fed President James Bullard said yesterday that a “darkened” global trade narrative could slow the growth of the US economy, followed by a “downward policy rate adjustment may be warranted soon.”  The bulls sent US stocks up into yesterday’s cash close.

Markets will be watching Fed speak closely this morning: John Williams @ 8:30am EST and Chair Jerome Powell @ 9:55am EST.  CME futures predict a 50% chance of a rate cut in July with 2 more before 2020.  That would be quite a reversal in Fed policy…

FAANG companies are in US lawmakers’ crosshairs.  A House Judiciary committee announced a top-to-bottom review of US tech companies and the DOJ and FTC announced they would tackle large monopolistic companies such as Alphabet, Apple, Amazon, and Facebook.

Dem David Cicilline of RI said “The growth of monopoly power across our economy is one of the most pressing economic and political challenges we face today…  market power in digital markets presents a whole new set of dangers.”

In the same vein, Apple announced they will be killing iTunes and instead split music, podcasts, and TV into separate apps.  Earnings today include CRM, AMBA, GWRE, CBRL, GME, TIF, LE, HQY, and NAV.

The economic calendar is light with Factory Orders and Constructions Spending @ 10:00am EST.  Volatility continues to tick up and if Powell hints at decreasing rates, the ES could move today.  Size bias is a divergent short into Bullard’s 8:30am talk.

US and global stock markets are a little rattled by Trump comments concerning a scheduled June 12 Singapore meeting with North Korea and US trade war progress with China.  The US and South Korea held a joint military exercise last week and now Trump is saying there’s a good chance the North Korean meeting will not take place on June 12, but still a good chance it will at some point in the future.  About the trade negotiations with China, Trump said it’s “a start” but he was “not pleased” with the progress.  US retailers Target and Lowes missed earnings estimates while jeweler Tiffany & Co. crushed their expectations.  The economic calendar focus is Oil @ 10:30am and Fed minutes @ 2:00pm EST.  Before the main events, we have PMI Composite Flash @ 9:45am EST and New Home Sales @ 10:00am EST.  The ES has pulled back enough where upside volatility should not be hindered as we’ve experienced over the last week.  Volatility continues to contract, but there’s more room to expand now.  Size bias is short on increased Globex volume into the US session open.