Market Overview – Morning Express
Market Overview – Morning Express
E-mini S&P (September) / NQ (September)
S&P, yesterday’s close: Settled at 4298.25, up 17.25
NQ, yesterday’s close: Settled at 13,681.25, up 103.50
Fundamentals: U.S. equity benchmarks secured another strong intraday session yesterday but again consolidated lower overnight. This type of price action certainly exudes less investor enthusiasm globally than domestically. Who can blame them, between a war-driven energy crisis in Europe and broadening draconian conditions in Asia thanks to China’s communist party? This morning, German ZEW Sentiment came in below expectations and hit the lowest level since December 2011. The Eurozone read eked out a beat but came in at the lowest level since November 2011. In Asia, the Hang Seng slipped by 1.05%. This comes after the PBoC staved off selling Monday with a 10 basis points rate cut on the heels of an awful slate of economic data for July. The focus now shifts domestically with sentiment zeroing in on retail earnings. Walmart, the world’s largest retailer, crushed estimates and reaffirmed their second half guidance. The stock is +2.40% ahead of the bell. Home Depot also beat top-and bottom-line estimates, but the stock is lower by nearly 1% due to weaker ‘do-it-yourself’ demand, a miss on margins, and higher inventories. Building Permits and Housing Starts are due at 7:30 am CT and Industrial Production follows at 8:15 am CT. This leads into Retail Sales data tomorrow along with earnings from Target and Lowe’s, capped off with by the Minutes from the Fed’s July meeting later that afternoon.
Do not miss our daily Midday Market Minute, from yesterday.
Technicals: The summer melt-up continued through yesterday with the S&P pinging above 4300, the highest level since May 4th, and the NQ trading the highest since April 22nd. After the S&P settled +15% from just its July low and closes in on the 200-day moving average for the first time since April 21st, at 4317-4322 today, and just ahead of Week 3 Option Expiration this Friday, we can certainly make the argument that a small pullback is not only necessary but extremely healthy. Make no mistake, we are not turning bearish in any manner, however, using this moment to reassess the landscape and where value can be found. With that said, continued price action above our Pivot and point of balance at … Click here to get our (FULL) daily reports emailed to you!
Crude Oil (September)
Yesterday’s close: Settled at 89.41, down 2.68
Fundamentals: Crude Oil is still roiling through Sunday night’s slate of China data, but has shown signs of stability, trading as high as 90.65 this morning. Jolts of strength are coming after Iran officially responded to the EU overnight, reiterating their demand for “U.S. flexibility”. Although this was not surprising and some are calling the Nuclear Deal closer than ever, it pins the need for a U.S. response, encouraging a price consolidation from lower levels. Also in the news, Barclays lowered their forecast for Brent by $8, to average $103 for both 2022 and 2023. They also called for WTI to average $99 for both 2022 and 2023. Regardless, yesterday’s selling brought immense technical damage as the focus also shifts to inventory data and tomorrow’s September Option Expiration. Early estimates for U.S. inventories are -0.117 mb Crude, -1.494 mb Gasoline, and +10.67 mb Distillates.
Technicals: Price action has rebounded off the lows nicely, but as we noted above, there is immense technical damage from yesterday and it will require some rotating to chew through reaffirmed overhead resistance. The strength, that began at 6:00 am CT, has so far failed in front of major three-star resistance at 90.76-91.16. Our momentum indicators plummeted yesterday, but price action is now out above, therefore the bulls are trying to regain momentum as long as the tape holds above first key support at … Click here to get our (FULL) daily reports emailed to you!
Gold (December) / Silver (September)
Gold, yesterday’s close: Settled at 1798.1, down 17.4
Silver, yesterday’s close: Settled at 20.272, down 0.426
Fundamentals: Gold and Silver were whacked to start the week due to currency dynamics and the idea of less demand in a deflationary environment. Most importantly, the U.S. Dollar gained 1.17% against the Chinese Yuan yesterday, reaching the highest level since May 16th, when the USDCNH was peaking after a 7.2% four-week rip through a May 13th high. Furthermore, yesterday’s 1.17% topped any gain during that four-week surge and appears to match the best gain since March 19, 2020. With the U.S. Dollar broadly buoyant and Treasuries turning lower on the session, Gold and Silver traded to session lows on the traditional intraday open at 7:20 am CT and after mixed but better than feared housing data. Retail Sales and FOMC Minutes are due tomorrow. Also, traders should keep an ear to the ground for fresh Fed speak.
Technicals: Both Gold and Silver are taking out yesterday’s low ahead of the U.S. opening bell. On the positive side, there is strong support just below the market and helping keep the tape together. Still, the damage from yesterday’s session kept any sign of overnight strength in check. In order to stave off fresh selling, price action in Gold must hold at or above our Pivot and point of balance at … Click here to get our (FULL) daily reports emailed to you!
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