Market Overview – Morning Express
E-mini S&P (June) / NQ (June)
S&P, yesterday’s close: Settled at 4126.00, down 32.75
NQ, yesterday’s close: Settled at 13,650.25, down 78.25
Fundamentals: A rising tide lifts all boats. NVDA reported earnings after the bell yesterday and smashed expectations. The stock is up more than 25%, adding more than $180 billion in market cap, and lifting E-mini NQ futures by 2%, all ahead of the open. If it holds, the move ranks second domestically behind Amazon’s $191 billion gain on February 4, 2022, and 3rd globally, with PetroChina adding $597 billion on November 5, 2007, credit @MikeZiccardi. On the earnings call last night, NVDA CEO Jensen Huang said this is the beginning of a 10-year cycle. NVDA’s peers are responding, AMD has added 10%, MU +5%, AVGO +2% (all four are owned in Blue Line Capital portfolios, for questions, please email us at firstname.lastname@example.org). However, INTC remains the outcast and is -1.75%.
E-mini S&P futures are +0.6%, and of course, trailing the tech-heavy E-mini NQ. The divergence certainly does not come as a surprise to us amid debt ceiling and recession fears. For instance, the SPDR Industrial ETF is -2.5% on the week. On Tuesday, we penned a note highlighting the potential one-two punch of a blowout report for NVDA coupled with positive debt ceiling news ahead of the weekend and how it could set E-mini S&P futures on a path to 4300: Are Tailwinds for the E-mini S&P to 4300 Brewing?
As we gear up for today’s evolving door of debt ceiling rhetoric, the economic calendar brings the second look at Q1 GDP at 7:30 am CT, along with weekly Jobless Claims. Pending Home Sales follow at 9:00 am CT, Fed Governor Collins speaks at 9:30 am CT, and KC Manufacturing data is due at 10:00 am CT. The U.S. Treasury will auction $35 billion in 7-year Notes, after a strong 5-year auction yesterday. The Federal Reserve releases Balance Sheet data at 3:30 pm CT.
Technicals: Yesterday’s settlement prices for each the E-mini S&P and E-mini NQ will align to bring a line in the sand, rare major four-star supports, highlighted in the levels below. We believe that while above here, the bulls are back in the driver’s seat after a healthy, yet swift, consolidation. Still, each index has some overhead supply to work through. In fact, the E-mini S&P has major three-star resistance aligning with a gap from Tuesday’s settlement at 4158.65-4161.25. The E-mini NQ is probing major three-star resistance now at 13,939-13,946, and a close above would be viewed as a breakout. As the day unfolds, our Pivot and point of balance will be crucial to help define this bull move at … Click here to get our (FULL) daily reports emailed to you!
Crude Oil (July)
Yesterday’s close: Settled at 74.34, up 1.43
Crude Oil futures have surrendered yesterday’s breakout settlement. This came on the heels of a massive surprise draw in Crude Oil inventories; -12.456 mb Crude, despite 1.631 mb released from SPR, Gasoline inventories -2.053 mb, and though -0.3% w/w Refinery Utilization explains some along with Net Imports -8.743 mb w/w, this only accounts for a portion of this massive drawdown. However, price action is slipping back to the $73 mark and this could be attributed to the market pricing in all the bullish news between the Saudi Energy Minister on Tuesday and the EIA report, in the face of a global slowdown and strong resistance all the way up to 75.64-75.73, leading to profit taking and a repositioning by bears. For now, what matters most is that any pullback continues to trade out above our newly established rare major four-star support at … Click here to get our (FULL) daily reports emailed to you!
Gold (June) / Silver (July)
Gold, yesterday’s close: Settled at 1964.6, down 9.9
Silver, yesterday’s close: Settled at 23.24, down 0.384
Gold and Silver futures plunged to new cycle lows after U.S. Q1 GDP (first revision) came in stronger than expected at 1.3% versus 1.1%, Core PCE for Q1 ticked up to 5.0% from 4.4% last and 4.9% expected, and Initial Jobless Claims fell to 229k, while last week was revised from 242k to 225k. This lifted the Dollar Index to a high of 104.14 and the Yuan futures (USDCNH) to 7.08, along with higher yields, all of which are pressuring the precious metals complex. At what point will all of the sellers of this wave lower, due to a divergence in economic data from previous anticipations, have sold? The continuous 100-day moving average on Gold futures comes in at 1940, and the spike low so far was 1939.2. The bull camp must now regain first resistances at … Click here to get our (FULL) daily reports emailed to you!
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