Stock Index futures break out to new 4-week highs, even as consumer sentiment sinks and natural gas retreats.
comments from the trading desk at Stipelis: 5-16-2025
The Stipelis Equity Index Indicator breaks out to new 4-week high, even as consumer sentiment sinks and natural gas retreats.
Major U.S. equity indexes broke to new four-week highs in Friday’s trading session.
Commodities are being led by a 5.68% rally in cocoa, a 5.2% move in lumber and a 4.8% surge in heating oil for the week.
The S&P 500 E-mini and Nasdaq 100 both edged higher today, with the S&P on track for a five-day win streak.
While the advance lacked conviction—volume and trading ranges have been below average—it underscores the market’s resilience. Gains were broad but muted, with the Dow, Russell 2000, and even lumber inching into positive territory.
Despite risk appetite showing up in price, broader macro indicators aren’t painting a bullish picture.
The University of Michigan’s consumer sentiment index unexpectedly fell to 50.8 in May, marking the second lowest reading on record.
Nearly 75% of respondents cited tariffs as a top concern, raising fears of price increases and weakening purchasing power. Expectations were for an improvement, but sentiment has now dropped five straight months and is down 30% since December.
The disconnect between markets and consumers is growing, especially with softer economic indicators, including weak housing starts and falling natural gas prices.
In energy, natural gas futures declined as weak seasonal demand and strong inventory builds continue to weigh on prices.
Meanwhile, crude oil held steady, buoyed early in the week by easing trade tensions and mixed headlines on U.S.-Iran relations.
The fixed income markets remain defensive, with yields drifting lower and two Fed cuts still priced in for 2025.
The U.S. dollar slipped again on Thursday as its traditional safe-haven role comes into question. Risk assets may be rallying, but headwinds are gathering just below the surface.
Stephen coleman 5-16-2025