Morning Express 04/05
Posted: April 5, 2022, 8:19 p.m.
E-mini S&P (June) / NQ (June)
S&P, yesterday’s close: Settled at 4577.75, up 38.50
NQ, yesterday’s close: Settled at 15,164.25, up 300.50
Fundamentals: U.S. equity benchmarks rebounded from last week’s late pullback, pinning both the S&P and NQ at crucial technical levels. News of Elon Musk’s 9.2% stake in Twitter lit a fire under the beleaguered stock, gaining 27%. It paved the way for a strong showing from the heavyweights within Communication Services +2.28% and Information Technology +1.91%. However, Consumer Discretionary was the best performer, kicking off the week with a gain of 2.33%. From there, Energy nudged out a +0.07% as the only other sector to finish positive amid unenthusiastic NYSE breadth. Only 54% of listings were up on the session. We now look to a jam-packed economic calendar that features a deluge of Fed speak, final SPGI Services PMI for March at 8:45 am CT, and the more closely watched ISM Non-Manufacturing read at 9:00 am CT.
Expectations are holding steady at an 80% probability the Federal Reserve hikes rates by 100 basis points through their June 15th meeting. Today we look to comments from Minneapolis Fed President Kashkari at 9:00 am CT, incoming Fed Vice Chair Brainard at 10:05 am CT, and NY Fed President Williams at 1:00 pm CT.
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The EU plans to propose billions of dollars of new sanctions on Russia, including a mandatory phaseout of coal. They plan to ban from both Russia and Belarus potash fertilizer, wood, chemicals, concrete, and foodstuffs. Furthering this big step, the German Foreign said this morning that oil and then gas are to follow.
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NQ (March)
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Crude Oil (May)
Yesterday’s close: Settled at 103.28, up 4.01
Fundamentals: Crude Oil surged through yesterday’s session, and spiked again after reopening last night (on today’s session), reaching a high of 105.59 by 8:00 pm CT. The move comes as the EU proposes sanctions on Coal and plans to follow those with Oil and then Gas. Although expectations for this decision were mounting after the graphic war crimes around Kyiv circulated over the weekend, this is a monumental step that underpins the price of Oil. Bringing additional tailwinds was production data showing Iraq produced 220,000 bpd less than its quota and Russian output slipping by 4% already this month. Weekly U.S. inventory data will also come into the picture through today, ahead of tomorrow’s official release. Early estimates point to -3.016 mb Crude, -0.30 mb Gasoline, and -1.117 mb Distillates.
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Gold (June) / Silver (May)
Gold, yesterday’s close: Settled at 1934, up 10.3
Silver, yesterday’s close: Settled at 24.59, down 0.064
Fundamentals: Gold and Silver are enjoying a firm tape on the heels of EU’s plan to implement billions worth of sanctions on Russia, including those on coal. They will also plan to ban from both Russia and Belarus potash fertilizer, wood, chemicals, concrete, foodstuffs. Furthering the ban on access to EU ports, road transport operators, and exports of semiconductors and machinery. This has certainly lit a bid under Gold for both safe have and stable asset purposes. On the economic calendar, SPGI Services PMI was revised lower for March and ISM Non-Manufacturing missed, both bringing an added tailwind.
With Fed speak on the calendar, expectations are holding steady at an 80% probability the Federal Reserve hikes rates by 100 basis points through their June 15th meeting. Remember, we believe this tightening cycle is also a bullish tailwind for Gold looking out the next six to twelve months. Today we look to comments from Minneapolis Fed President Kashkari at 9:00 am CT, incoming Fed Vice Chair Brainard at 10:05 am CT, and NY Fed President Williams at 1:00 pm CT.
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Silver (May)
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