Reason to Watch a Few Rounds of this Fight | Morning Express | 11/16/2022
Posted: Nov. 16, 2022, 9:21 a.m.
E-mini S&P (December) / NQ (December)
S&P, yesterday’s close: Settled at 3999.50, up 33.50
NQ, yesterday’s close: Settled at 11,904.25, up 169.50
Fundamentals: The S&P closed +0.84% on the session but finished 1.3% off a fresh swing high after a missile hit Polish territory, killing two. Immediate speculation led to the belief it came from Russia, and given Poland’s NATO membership, this would escalate the Russia-Ukraine war. As details were uncovered overnight, it was realized the missile came from Ukraine’s air defense system amid a barrage of attacks from Russia. Still, U.S. equity benchmarks are off sharply from their best levels post-soft-PPI. Added pressure has come after Target whiffed on earnings, eroding broad market confidence. Also, with Credit Usage at a record high, data this morning also showed it rising at the fastest pace since Q3 2008. All was not negative, though, as Retail Sales crushed expectations, with headline and Core both +1.3%. However, it is important to note that Retail Sales is a nominal number, as goods and services cost more, it will arbitrarily rise.
Do not miss our daily Midday Market Minute, from yesterday.
Elsewhere, Lowe’s topped earnings and revenue estimates. Also, Industrial and Manufacturing Production both came in below expectations. We now look to NY Fed President Williams to speak at 8:50 am CT and Fed Vice Chair of Supervision Barr at 9:00 am CT. ECB President Lagarde will also speak then. Business Inventories and NAHB Housing Market Index are each due at 9:00 am CT. NVIDIA and Cisco report earnings after the bell.
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NQ (December)
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Crude Oil (December)
Yesterday’s close: Settled at 86.92, up 1.05
Fundamentals: Crude Oil spiked above $88 briefly yesterday on speculation the missile that hit Poland came from Russia. Price action began reversing from this resistance level even as speculation went on. Added weakness hit the tape this morning after Hungary said shipments through the Druzhba pipeline have resumed. Initially, Ukraine had said shipments will not resume today. Shifting gears, EIA data is due at 9:30 am CT and expectations are for -0.44 mb Crude, +0.31 mb Gasoline, and -0.513 mb Distillates.
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Gold (December) / Silver (December)
Gold, yesterday’s close: Settled at 1776.8, down 0.1
Silver, yesterday’s close: Settled at 21.518, down 0.595
Fundamentals: Gold and Silver traded back to local highs last night on U.S. Dollar weakness, but the strength has dissipated on better-than-expected Retail Sales. Although Bonds are rallying, the precipitous drop in the 2s10s spread may be seen as a headwind in the near-term. At the end of the day, it has been a terrific rebound from the depths of the autumn for precious metals, and like we noted for the S&P/NQ, we find it attractive to watch a few rounds of this fight in the near-term.
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Silver (December)
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