Cautiously Bullish | Morning Express | 3/16/2023
Posted: March 16, 2023, 9:14 a.m.
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- A lifeline for Credit Suisse, as the troubled bank borrows up to $54 million from the Swiss National Bank. The stock rose as much as 25% before paring a bulk of the gains, currently +5% at the onset of U.S. hours.
- Reports of the CS lifeline helped lift sentiment and equity markets broadly through Asian hours.
- ECB policy announcement is due at 8:15 am CT, due to U.S. spring forward clock change.
- Markets are pricing in 40 bps, according to Bloomberg, while many predict a 25bps hike. As of Tuesday, a 50bps hike was believed to be a done deal.
- Weekly Initial Jobless Claims, fresh March Philly Fed Manufacturing, Feb Building Permits, and Housing Starts are all due at 7:30 am CT.
- Yesterday, PPI showed signs of deflation, with headline -0.1% m/m versus +0.1% expected and 4.6% y/y versus +5.4% expected, while January was revised from +6.0% to 5.7%. Core was flat m/m versus +0.4% expected, and +4.4% y/y versus +5.2% expected, while January was revised from +5.4% to +5.0%.
- Producer prices are a leading indicator of consumer prices, and this begins to shed light on the social evolution we have been talking about, enough growth and inflation to start the year just to confuse people, but the data is really slowing.
- Also yesterday, Retail Sales fell more than expected -0.4% m/m versus -0.3%, though January was revised from +3.0% to +3.2%. NY Empire State Manufacturing whiffed at -24.6 versus -8.00 expected.
- The CME FedWatch Tool squarely leans to a 25bps hike next week with a 72.3% probability.
- However, after odds favor rates at 475/500bps (post-March hike), the market is pricing in 75bps worth of cuts through September with a 65.3% probability and 100bps worth of cuts through December with a 56.7% probability.
In a quick finish to yesterday's Halftime Report, Bill gave AMD as his final trade. Check out our NQ charts below.
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Bill joined TD Ameritrade this morning to cover economic data and Crude Oil.
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E-mini S&P (June) / E-mini NQ (June)
S&P, yesterday’s close: Settled at 3925.00, down 29.25
NQ, yesterday’s close: Settled at 12,377.75, up 40.75
- Per the charts above, remain cautiously bullish and expect leadership from Tech.
- Very constructive bottoming action yesterday intraday in the S&P, intraday inverse head and shoulders, above major three-star support
- Yesterday, higher lows all morning in the NQ.
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NQ (March)
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Crude Oil (April)
Yesterday’s close: Settled at 67.61, down 3.72
- Big violation of $70 and ex-pandemic trendline from 2016. Previous vloor is now support.
- Keep an eye on OPEC+ chatter, but remember, the UAE wanted to bring more production online.
- April options expire today, futures fall off the board through Monday. A volatile expiry could bring a near-term floor early next week.
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Gold (April) / Silver (May)
Gold, yesterday’s close: Settled at 1931.3, up 20.4
Silver, yesterday’s close: Settled at 21.882, down 0.158
- The dead bodies from Gold’s February 2nd reversal, supply, are at major three-star resistance at 1930.8-1936.4, shown in the chart above, a close above here is very bullish.
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Silver (May)
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