Market Overview – Morning Express
– Do not miss our Top Things to Watch this Week, out every Sunday.
– Europe, Hong Kong, Australia, and more closed for Easter holiday.
– Stocks slip on open last night. Crude, Gold, rates, and Dollar surge. Stocks paring losses and Crude gains at onset of U.S. hours as rest hold firm.
– Safe-havens such as Gold and Dollar on demand as Russia surrounds Mariupol and strikes Lviv, a western Ukrainian city near Polish border.
– Deluge of data from China last night. Q1 GDP topped expectations at 4.8% versus 4.4%. March Industrial Production beat at 9.3% YoY versus 8.5% expected and 12.2% for February Fixed Asset Investment beat at 5.0% YoY versus 4.5% exp and 7.5% for February. Retail Sales whiffed at -3.5% versus -1.6%. Unemployment Rate jumped to 5.8% from 5.5%. Apparent low estimates relative to February due to lockdowns.
– On Friday, markets closed but data released. NY Empire State Manufacturing for April beat at 24.60 versus 0.5% exp and -11.8 for March. Industrial Production also topped estimates.
– Core CPI for March was released last week and soft at 6.5% versus 6.6% exp, but up from 6.4% in February. +0.3% MoM versus +0.5% exp and in February, this was the most notable item.
– Producer prices are a leading indicator to consumer prices and PPI was hot, hot, hot with a headline of 11.2% versus 10.6%, a 1.4% jump MoM versus 1.1%.
– U.K. inflation last week was also hot, both CPI and PPI topped estimates across the board.
– Back on April 1st, Eurozone CPI for March surged by the most on record at 7.5% versus 6.6^ expected.
– ECB met on Thursday and left policy on its current path, planning to end bond purchases in Q3.
– Yields in Germany surged on the ECB’s patience, but were still outpaced by yields in the U.S.
– U.S.-German 10-year spread broke out on April 5th, during this time the U.S. Dollar Index has rallied 1.6% to the highest since April 2020. (chart above)
– Yen bludgeoning is also a tailwind to the U.S. Dollar. Yen held June 2015 low on a closing basis last week but broke below it overnight to lowest since May 2002.
– Bank of America topped estimates, led by consumer lending, is +1.3% ahead of the bell.
– JB Hunt after the bell, J&J, Netflix, Lockheed Martin, IBM, and more tomorrow.
E-mini S&P (June) / NQ (June)
S&P, yesterday’s close: Settled at 4387.50, down 54.75 on Thursday and 96.00 on the week
NQ, yesterday’s close: Settled at 13,893.75, down 327.75 on Thursday and 433.25 on the week
– We are maintaining a cautiously Bearish Bias as the near-term trend holds negative and rally attempts failed multiple times last week to close on session lows.
– Outside bearish daily candle in the NQ on Thursday. S&P had a higher high but did missed closing on a new low by 3.50.
– S&P and NQ finished last week at lowest close since March 16th.
– We advise against chasing price action lower; we have reduced core shorts into weakness and find day-trade opportunities on rally attempts with tight risk.
– Sentiment indicators hitting at or near extreme bearishness, signaling market is near a contrarian bullish signal.
– Important to understand price action is now trading into the extreme strength of the March 15-16 reversal, a broad area of support. However, chewing through here would exude the magnitude of selling. (chart above)
– Two major levels of support were briefly exceeded, sellers will look to take tape lower with continued action below … lick here to get our (FULL) daily reports emailed to you!
Crude Oil (June)
Yesterday’s close: Settled at 106.38, up 2.59 on Friday and 8.65 on the week
– May options expired on Thursday, June futures now front month.
– Crude Oil surged ahead of the long weekend and to begin trading this week on mounting expectations the EU will issue a ban on Russian Oil.
– Outage in Libya due to protests helping underpin prices.
– There are fears of slowing China demand. Data showed refined 2% less in March YoY, lowest since October. We noted on Thursday that China refiners to cut throughput this month by 6%, weighing on Crude tape.
– Momentum indicator is rising and aligns with a floor of support this morning that helps define the immediacy of this rally at … lick here to get our (FULL) daily reports emailed to you!
Gold (June) / Silver (May)
Gold, yesterday’s close: Settled at 1974.9, down 9.8 on Friday and up 29.3 on the week
Silver, yesterday’s close: Settled at 25.70, down 0.330 on Friday and 0.877 on the week
– Gold and Silver rally after Russia surrounds Mariupol and strikes Lviv, western Ukranian city near Polish border.
– Eroding global growth and central banks tightening to battle inflation that will ultimately slow growth further remains the elephant in the room narrative underpinning this rally in Gold.
– Today’s strength across Gold and Silver exudes breakout capabilities.
– Silver has elongated cup and handle formation dating back to the early 2021 high. (chart above)
– With Thursday’s slip, Silver powered by miniature cup and handle formation within the larger one starting with the March high.
– Bulls are in the driver’s seat for higher prices across all timeframes with Gold holding out above … lick here to get our (FULL) daily reports emailed to you!
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