– The number everyone is waiting for. CPI is due at 7:30 am CT
– Core inflation, excluding food and energy, really matters the most; expectations are for 4.9% YoY, highest since 1991, and +0.5% MoM.
– Headline inflation will garner attention; expected at 6.8% YoY, highest since July 1982.
– Inflation is hot, but is it hotter than market expectations? If so, speed the Fed’s timeline on tapering asset purchases to completing as soon as March.
– A number that is inline or under expectations likely brings a risk-on tailwind and buys the Fed more time, awaiting answers on Omicron.
– Federal Reserve begins two-day meeting next Tuesday, concludes Wednesday at 1:00 pm CT with a policy decision.
– Fed Chair Powell’s hawkish turn in front of Congress last Tuesday surprised markets, and they began discounting these expectations. A hawkish bar has been set.
– Fresh December Michigan Consumer data due at 9:00 pm CT, very politically infused.
– Evergrande default so far a soft landing. China reining in Yuan strength. Keep an eye on these headlines over the weekend.
Bill Baruch joined the TD Ameritrade Network yesterday morning to discuss CPI and markets.
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E-mini S&P (December) / NQ (December)
S&P, yesterday’s close: Settled at 4667, down 32.00
NQ, yesterday’s close: Settled at 16,148.75, down 243.50
– S&P consolidation remains healthy, building a bull-flag pattern into major three-star support with slightly lower highs and slightly lower lows.
– Close above major three-star resistance at 4699-4702, or decisive move intraday, is very bullish.
– NQ slipped into major three-star support at 16.120-16,153; Tesla, chips, software, and Netflix all weighing on the index yesterday.
– Dow Jones outperformed yesterday, Apple, healthcare and staples helping to lift.
– Break below major three-star support at 4645.50-4651 will negate immediacy of construction, bull-flag, and encourage a test into … Click here to get our (FULL) daily reports emailed to you!
Crude Oil (January)
Yesterday’s close: Settled at 70.94, down 1.42
– Bit of broad risk-off and consolidation lower yesterday but rebounding so far ahead of the weekend. Undertone of geopolitics may not be priced in enough.
– Kuwait followed Saudi Arabia in raising prices to Asia
– Russia in support of continued OPEC+ pact.
– Held first key support into settlement but traded down to second key support post-settlement; still constructive.
– Trading back above our momentum indicator at … Click here to get our (FULL) daily reports emailed to you!
Gold (February) / Silver (March)
Gold, yesterday’s close: Settled at 1784.7, up 5.2
Silver, yesterday’s close: Settled at 22.432, down 0.091
– Gold and Silver are waiting on this morning’s CPI data. A hot number will pressure prices and support the U.S. Dollar, whereas an in-line to soft number is seen as buoying the metals complex.
– Momentum indicator in Gold is now 1776, continued action above here is seen as supportive.
– Seasonally bullish time of year is right around the corner, December 20th.
– Close below rare major four-star support at … Click here to get our (FULL) daily reports emailed to you!
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