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E-Mini S&P 500 June 2013 (ESM13)

1,651.25+0.75 (+0.05%) 9:44P EDT (GBLX)
Commodity Price Quote as of Sunday, May 26th, 2013 View Help

Contract Specifications

Symbol ES
Name E-Mini S&P 500 Index (ES)
Exchange GBLX
Trading Months March, June, September, December (H, M, U, Z)
Trading Unit $50 times Index
Tick Size 0.25 points ($12.50 per contract)
Daily Limit 7.0%, 13.0% and 20.0% decline below the Settlement Price of the preceding session (limited to 5.0% outside of RTH)
Trading Hours 5:00p.m. - 4:15p.m. (Sun-Fri) CST
Last Trading Day Third Friday of the contract month
Value of one futures unit $50
Value of one options unit $50

CRB Yearbook Description

A stock index simply represents a basket of underlying stocks. Indices can be either price-weighted or capitalization-weighted. In a price-weighted index, such as the Dow Jones Industrials Average, the individual stock prices are simply added up and then divided by a divisor, meaning that stocks with higher prices have a higher weighting in the index value. In a capitalization-weighted index, such as the Standard and Poor's 500 index, the weighting of each stock corresponds to the size of the company as determined by its capitalization (i.e., the total dollar value of its stock). Stock indices cover a variety of different sectors. For example, the Dow Jones Industrials Average contains 30 blue-chip stocks that represent the industrial sector. The S&P 500 index includes 500 of the largest blue-chip U.S. companies. The NYSE index includes all the stocks that are traded at the New York Stock Exchange. The Nasdaq 100 includes the largest 100 companies that are traded on the Nasdaq Exchange. The most popular U.S. stock index futures contract is the S&P 500 at the Chicago Mercantile Exchange (CME).

Prices - The S&P 500 index showed weakness early in early 2011 on a confluence of negative events that included high gasoline prices, the European debt crisis, the massive Japanese earthquake in March, and the U.S. debt ceiling debacle that resulted in a downgrade of America's AAA rating from Standard & Poors.

However, the S&P 500 bottomed out in October 2011 and then rallied through the remainder of the year and into early 2012. The S&P 500 ended 2011 virtually unchanged. By early 2012, the S&P 500 was trading just below the 3-3/4 year high posted in May 2011 and was back down at the levels seen in June 2008 before the worst of the 2008/09 financial crisis came with the bankruptcy of Lehman Brothers in September 2008. The stock market was able to rally in late 2011 and early 2012 on a substantial improvement in the U.S. economy along with optimism that progress was being made on containing the European debt crisis.

The stock market in 2011 was also helped by Federal Reserve policy. The Fed's second quantitative easing program totaling $600 billion ended in June 2011. However, the Fed remained dissatisfied with the high unemployment and the slow pace of the economic recovery. The Fed in September 2011 therefore began its $400 billion "Operation Twist" program, which involved selling short-term securities in its portfolio and buying longer-term securities with the goal of keeping long-term Treasury yields low. The Fed was very successful in keeping Treasury yields near record lows through 2011 and early 2012, which was a highly bullish factor for the stock market.

The stock market in late 2011 was also able recover because of the continued impressive pace of U.S. corporate earnings growth. U.S. corporations were very successful in the aftermath of the 2008/09 financial crisis in cutting their expenses and managing to find ways to force a recovery in earnings growth. In fact, earnings growth for the S&P 500 companies was strong at about +10% in 2011, adding to the increase of +30% seen in 2010. The consensus is for earnings growth in 2012 to remain firm at about +8%.

The strength in earnings in turn allowed stock market valuations to remain at very reasonable levels even as stock prices rallied. As of early 2012, the S&P 500 was trading at a very reasonable price-to-earnings ratio based on forward-looking earnings of 13.1, which was below the 5-year average of 14.9 and the 10-year average of 16.7. The reasonable valuation level leaves room on the upside for further gains in stock prices as earnings and the economy gain traction.

Articles from the Commodity Research Bureau (CRB) Commodity Yearbook. The single most comprehensive source of commodity and futures market information available, the Yearbook is the book of record of the Commodity Research Bureau, which is, in turn, the organization of record for the commodity industry itself. Its sources - reports from governments, private industries, and trade and industrial associations - are authoritative, and its historical scope is second to none. Additional information can be found at www.crbyearbook.com.
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