JOLTs Front and Center, What Does it Mean? | Morning Express| | 04-04-23 |
Posted: April 4, 2023, 9:56 a.m.
E-mini S&P (June) / E-mini NQ (June)
S&P, yesterday’s close: Settled at 4153.75, up 16.00
NQ, yesterday’s close: Settled at 13,270.00, down 31.75
Fundamentals: U.S. equity indices battled through a mixed environment to start the week but finished at some of the best levels of the day. Crude Oil surged by 6.3% on the back of OPEC’s surprise production cut announcement over the weekend and the XLE jumped 4.5% in its best day since October. Healthcare performed well gaining 1.1%, led by Plans and a 4.5% rip by UNH. Check out our Triple Play podcast, we covered UNH in mid-March. Also, Aerospace capitalized on the geopolitical environment, the ITA ETF added 1.5% to reach the highest level in a month. From the index perspective, the E-mini S&P turned positive in the final 90 minutes, whereas the E-mini NQ never traded above Friday’s closing price of 13,301. Given the aforementioned sector performance, one could imagine it was the Dow that led and that was certainly the case. In fact, since before the European open at 2:00 am CT, the E-mini Dow never traded below Friday’s settlement. Of course, higher energy costs reinvigorate some inflation fears that could erode excitement behind Tech, Crude Oil is at the highest level since January, but this move certainly needs to see a continuation in order to give true credence to those fears. For now, the Cleveland Fed Inflation Nowcast model has only shown a marginally faster m/m pace of headline CPI at +0.37% for April versus +0.30% for March. Inflation will be in the spotlight next week with March CPI due on the 12th, and yesterday’s slate of ISM Manufacturing supported the thesis of cooling prices, but it is jobs data this week that is front and center. Today, we look to February JOLTs Job Openings at 9:00 am CT, a data point that has held stubbornly high above 10 million since June 2021 and is the epitome of a tight job market. This leads into tomorrow’s first glance at payrolls via the private ADP survey, along with ISM Non-Manufacturing, before Friday’s Nonfarm Payrolls report.
Do not miss our daily Midday Market Minute, from yesterday.
Factory Orders are also due at 9:00 am CT, and traders must continue to keep an ear out for Fed speak. Fed Governor Cook and Boston Fed President Rosengren (not a 2023 voter) are both expected to speak at 12:30 pm CT.
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Crude Oil (May)
Yesterday’s close: Settled at 80.42, up 4.75
Fundamentals: We are a session removed from digesting OPEC’s surprise production cut and Crude Oil’s 6.28% surge to start the week. Price action in Crude has held up very well, extending its range this morning, although Gasoline and Heating Oil are less enthusiastic. OPEC+ and Saudi Arabia have taken the role of swing producer and aligned it with their agenda, throwing a jab at U.S. politics. This also increases the ante on U.S. Shale. Can and will U.S. production pick up? The focus now shifts to U.S. weekly inventory data, with the API report due at 3:30 pm CT. Early estimates are for -1.8 mb Crude, -1.4 mb Gasoline, and -0.06 mb Distillates.
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Gold (June) / Silver (May)
Gold, yesterday’s close: Settled at 2000.4, up 14.2
Silver, yesterday’s close: Settled at 24.021, down 0.135
Fundamentals: Gold and Silver were buoyant yesterday, given they shook off Sunday night weakness to post a decent session. Of course, the initial reaction to OPEC’s production cut announcement is a fear it reinvigorates inflation, but we must see continued higher prices (in Crude) in order to substantiate such just yet. We would add that price action in Gold and Silver was disappointing in reaction to the ISM Manufacturing miss. The headline read contracted more than expected at 46.3 versus 47.5 and Prices were a surprise contraction at 49.2 versus 51.2. Today, we look to February JOLTs Job Openings at 9:00 am CT, a data point that has held stubbornly high above 10 million since June 2021 and is the epitome of a tight job market. This leads into tomorrow’s first glance at payrolls via the private ADP survey, along with ISM Non-Manufacturing, before Friday’s Nonfarm Payrolls report.
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