Market Overview – Morning Express
– December Retail Sales whiffed, Core -2.3% MoM versus +0.2% expected. Headline -1.9% MoM versus -0.1%.
– Industrial and Manufacturing Production at 8:15 am CT.
– Fresh January Michigan Consumer data and Business Inventories for November due at 9:00 am CT.
– We are eager to see inventories through January, especially after Retail Sales miss. However, today’s is only November. Did manufacturers, wholesalers, and retailers buy everything in fear of supply bottlenecks and end up with excess supply? A drag on GDP.
– China Trade Balance released overnight. Surplus grew by $94.5 B on the month and $676 B on the year.
– Exports surged by 20.9% versus 20.0% expected, signaling a healthy global economy.
– Imports missed at 19.5% versus 26.3% expected.
– December virus scare in China and dialing back imports to subdue smog was a known known. It is the anticipated reflation driving commodities like Copper this week and the room for PBOC to now ease after soft inflation data earlier in the week.
– NY Fed President Williams speaks at 9:00 am CT.
– Most hawkish among Fed member are pushing to begin balance sheet runoff after rate liftoff.
– Less hawkish members are pushing after 100 bps of hikes before beginning balance sheet runoff.
– Still 77.4% probability of second hike in June.
– JPM -4.4% premarket after earnings, Citigroup -4%, and WFC unchanged.
E-mini S&P (March) / NQ (March)
S&P, yesterday’s close: Settled at 4652.00, down 64.25
NQ, yesterday’s close: Settled at 15,490.25, down 397.00
– S&P closed below support at 4667.75-4673.75, neutralizing the rebound and opening door for sellers
– NQ surrendered December lows and major three-star support at 15,475-15,495; sellers are back in driver’s seat
– Heavy selling early, look for continued weakness through the first hour of trade. Must form a bottom into 10:00 am CT in order to stage a rebound.
– S&P trend line support via December lows aligns with Monday’s low as major three-star support at 4572.75-4577.
– Roadmap to rebound is … Click here to get our (FULL) daily reports emailed to you!
Crude Oil (February)
Yesterday’s close: Settled at 78.23, down 0.67
– China Crude Imports about 10.87 mbpd according to Reuters, highest daily amount since March. Explains the overnight spike to 83.35. Refiners raced to meet quotas.
– Headlines are pointing to annual imports dropping for first time in 20 years.
– Risk-off undertow is dragging Crude at these elevated levels.
– We highlighted yesterday that we will maintain a more Bullish Bias, but Crude must digest gains at this level.
– Good key support at 81.59 and again at 80.95-81.24, will work to buoy waves of selling.
– If continued risk-off, inevitable test of major three-star support at … Click here to get our (FULL) daily reports emailed to you!
Gold (February) / Silver (March)
Gold, yesterday’s close: Settled at 1827.3, up 8.8
Silver, yesterday’s close: Settled at 23.207, up 0.395
– Gold is firm on the heels of Retail Sales whiff. Will battle risk-off undertow if U.S. Dollar strengthens as a safe have.
– Rare major-four star resistance is keeping a lid on rally attempts, overnight highs of 1829.3 in Gold and 23.345 in Silver.
– Although we maintain a more Bullish Bias, traders should be nimble against strong resistance.
– First supports at 1814-1815 in Gold and 22.90 in Silver buoying tape amid waves of selling
– Look for Gold to hold above our momentum indicator at … Click here to get our (FULL) daily reports emailed to you!
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