Market Overview – Morning Express
E-mini S&P (June) / NQ (June)
S&P, yesterday’s close: Settled at 4459.25, up 72.50
NQ, yesterday’s close: Settled at 14,217.25, up 309.50
Fundamentals: U.S. equity benchmarks finished strongly yesterday, and the S&P rebounded to one-week highs. That was until Netflix released another slasher. The stock’s value was cut by more than a quarter after the company said it lost 200,000 subscribers and expects to lose another 2 million in the current quarter. The NQ was down by as much as 1.2% overnight with the S&P slipping by 0.6%, but a reprieve in Treasury yields has helped reinvigorate yesterday’s strength. As for Netflix, the former leader and now only 20th largest stock by market cap in the NQ, has been left in the dust.
After trading to a high of 2.981% overnight, the U.S. 10-year yield has backed off by 10 basis points. Traders must keep an eye on the Treasury complex and continued strength will help underpin today’s stock rebound. Data this morning showed mortgage application in the U.S. fell by another 5.0% WoW. This was the fifth straight weekly drop and ninth out of the last ten. Rising rates are becoming a larger and larger headwind within the home market.
PPI data from Germany this morning surged to a new record of 30.9% YoY. Although 28.2% was expected, the last three months averaged 25% YoY, and it has been in double digits since July, it is an ever-present reminder of the mounting damage. Further exuding the stress was the MoM read at +4.9%, versus +2.6%. Next to December’s 5.0%, it was the second highest on record.
Traders do want to keep an ear to the ground on comments from China. Yesterday, the commented on strengthening their strategic coordination with Russia. Today, on a call with the U.S. an official said, “Taiwan is part of China, and it is a fact no one can change”.
Technicals: Price action across indices has strengthened ahead of the bell with the S&P trading out above the 200-day moving average at 4476.50 and nearly pinging the bottom end of major three-star resistance aligning with the April 8th settlement. As for the NQ, it has traded through resistance at 14,246-14,266, but as the intraday session opens, we will look to this as a point of balance on the session. Will this be a trend day, or will significant resistance overhead hold? It is typical to see some back and fill and such a test to resistance will be paramount. First key support comes in at 4466.75 in the S&P and 14,196-14,217 in the NQ. However, it is major three-star support below that could prove to be most crucial at … Click here to get our (FULL) daily reports emailed to you!
Crude Oil (June)
Yesterday’s close: Settled at 102.05, down 5.56
Fundamentals: Crude Oil is showing signs of stabilizing this morning and holding firmly out above $102 as we look to today’s EIA data. Buoying yesterday’s weakness was a massive headline draw from API after the bell of 4.496 mb of Crude when 2.533 was expected. However, Gasoline rose by 2.9 mb while Distillates fell by 1.7 mb. Today’s official EIA expectations are for +2.417 mb Crude, -0.976 mb Gasoline, and -0.829 mb Distillates.
Technicals: Price action firmed at first key support at 101.69-101.98, now 101.51-101.98. Although this will help create a near-term floor, we still view major three-star support at below (noted below). Previous major three-star support at 102.86 will now help create our Pivot and point of balance along with our momentum indicator at 103.15. Given yesterday’s damage, only a close back above major three-star resistance at … Click here to get our (FULL) daily reports emailed to you!
Gold (June) / Silver (May)
Gold, yesterday’s close: Settled at 1986.4, up 11.5
Silver, yesterday’s close: Settled at 26.15, up 0.45
Fundamentals: Gold and Silver are lower so far on the session but have not really extended losses from yesterday and this is encouraging given the damage. As noted above, traders do want to keep an ear to the ground for continued comments from China in regard to Taiwan as this would signal a deepening geopolitical confrontation and provide further near-term support to Gold. Also, the weekly mortgage data exudes a negative pulse on the economy, something that should help buoy the precious metals complex.
Technicals: Price action in Gold breached a critical area of support at 1948.-1953 and this will now serve as our Pivot and point of balance. Similarly, Silver took out 25.35-25.46, but has found footing out above 24.99-25.07 major three-star support. Gold and Silver do not have to rebound dramatically higher today in order to stave off the sellers, but a meager gain finishing above resistance at … Click here to get our (FULL) daily reports emailed to you!