Market Overview – Morning Express
E-mini S&P (June) / NQ (June)
S&P, yesterday’s close: Settled at 4001.50, down 5.75
NQ, yesterday’s close: Settled at 12,732.50, down 56.00
Fundamentals: U.S. equity indices are enjoying a broad boost ahead of the U.S. open, but there is certainly heavy lifting still to be done. The E-mini S&P and E-mini NQ have rebounded to critical levels of technical resistance, garnering tailwinds from, Micron’s earnings, UBS news, and a buoyant risk-environment out of China.
Despite double misses on top-and bottom-line estimates, Micron raised guidance, gave positive comments on the end-of-year inventory cycle, and trimmed costs from capex to hiring. On the one hand, the company missed low expectations for the current quarter, but on the other, the focus has shifted to 2024, and the company’s future is very bright. The CEO highlighted the current challenges but noted “an improving supply-demand balance in the months ahead.” This truly highlights our theme of ‘haves and have nots’, those that have significantly lowered expectations, and those that have not. Micron is up by more than 2% ahead of the bell and lifting the sector, NVDA and AMD are each up 1% or more. For more details, we covered Micron in our weekly Triple Play podcast, check it out here.
Banking stocks are enjoying a firm start to the morning, with UBS +3.5% and the XLF up nearly 1%. UBS brought back veteran Sergio Ermotti as CEO, who has intricate knowledge of the company and brings leadership through this difficult time. The market is receiving this as a breath of fresh air. Alibaba surged by 14.3% yesterday on news of restructuring into six units. This lifted the Hang Seng by 2% overnight. Crude Oil and Copper are also enjoying a healthy run this week as economic pessimism fades, discussed more in their respective sections.
Pending Home Sales are due at 9:00 am CT and the U.S. Treasury will auction $35 billion 7-year Notes at noon CT.
Technicals: Price action in the E-mini S&P and E-mini NQ struggled to find footing yesterday but firmed into close and immediately began extending gains overnight. Although yesterday’s weakness violated technical support, neither index settled below their key marks, which are unchanged and detailed in our technical section below. Each finds themselves back to a critical area of technical resistance. For the E-mini S&P, this is essentially the high on the week at major three-star resistance at 4031.50-4035.75 and key resistance just above at 4040.75-4042. For the E-mini NQ, this is the critical 12,884 mark and unchanged on the week at 12,890. With those resistance levels in mind, we continue to remain upbeat with a cautiously Bullish Bias and see the bulls clearly in the driver’s seat with price action above our Pivot and point of balance in the S&P and NQ at … Click here to get our (FULL) daily reports emailed to you!
Crude Oil (May)
Yesterday’s close: Settled at 73.20, up 0.39
Fundamentals: Crude is up for the third straight day, and this comes ahead of the weekly EIA inventory report at 9:30 am CT. Expectations are for +0.092 mb Crude, -1.617 mb Gasoline, and -1.455 mb Distillates. Underpinning the overnight strength was a larger draw then expected from the private API survey yesterday at -6.076 mb Crude, -5.891 mb Gasoline, +0.584 mb Distillates, and -2.388 mb at Cushing. The data fuels a tailwind from the standoff between Iraq, its Kurdish region and Turkey, halting some 450,000 bpd in production. This morning, the Norwegian producer DNO said it has begun shutting down Iraqi fields in Kurdistan.
Technicals: Price action met strong resistance in the 73.40 region yesterday, our major three-star resistance, and pulled back from a 73.90 high to settle at 73.20. The bulls are squarely in the driver’s seat, and we will look to construction against our range of supports upon any pullback. While staying out above our first key support, now 73.20-73.40, the we are targeting a move to … Click here to get our (FULL) daily reports emailed to you!
Gold (June) / Silver (May)
Gold, yesterday’s close: Settled at 1990.4, up 18.9
Silver, yesterday’s close: Settled at 23.42, up 0.275
Fundamentals: Gold and Silver are enjoying a nice wave of strength but have struggled to extend those gains overnight. The U.S. Dollar is firm due to weakness in the Japanese Yen and Aussie Dollar, while rates are a little higher, and this can all hold back the precious metals complex after a nice rebound. Yesterday’s options expiration and the ensuing roll off of the April contract in Gold will help relieve some overhead pressure, forcing a cleansing of sorts after Gold gained 7% month-to-date.
Technicals: June Gold is now front-month. As we noted here yesterday, there are three waves of strong overhead resistance in Gold. While it has cleared the first, it faces another just above at 1987.7-1993.3. However, the rebound from Monday’s selling has been extremely constructive and defines a new floor at … Click here to get our (FULL) daily reports emailed to you!
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