OUTLOOK: Price Signal Summary - Gold Bulls Remain In The Driver's Seat
- On the commodity front, the trend condition in Gold remains bullish and the yellow metal has traded to a fresh trend high today. This confirms an extension on the current uptrend and maintains the positive price sequence of higher highs and higher lows. Note that moving average studies are in a bull mode position - reflecting the uptrend. The focus is on $1934.4 next, the Apr 25, 2022 high. Support to watch lies at $1843.5, the 20-day EMA.
- In the Oil space, WTI futures traded higher last week and a short-term bull theme remains intact. A continuation higher would signal scope for a test of resistance at $81.50, the Jan 3 high and a bull trigger. Clearance of this hurdle is required to strengthen a bullish theme. The broader trend outlook still appears bearish. Initial key support to watch is at $72.46, the Jan 5 low.
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US TSYS: Yield Curves Bounce Back to Pre-FOMC Levels, 2Y Rally
Yield curves broadly steeper after the bell, short end lead rally off morning lows, 2YY at 4.1888% -.0475 after tapping 4.1531 low, 2s10s +8.518 at -70.892 -- back to pre-FOMC levels
- Market's way of discounting the week's hawkish Fed and ECB policy speak and forward guidance. Equities NOT taking a risk-on/dovish pricing view w/ SPX eminis -50.0 at 3877.25 (after bouncing off key support of 3855.13 50.0% - retracement of the Oct 13 - Dec 13 uptrend).
- Tsys bounced off lows following PMI data: The Fed will be encouraged that the crucial theme of weakening demand in the economy - leading to more modest inflation - played out further in this morning's Nov prelim US PMIs.
- The activity data overall remain contractionary, and are deteriorating: Composite at 44.6, a 4-month low), Services at 44.4 (4-month low), and Manufacturing at 47.4. (a 31-month low).
- Demand is weakening, as evidenced by the fastest decline in new orders since May 2020 with "pressure on purchasing power among customers and company balance sheets".
- Fed speak: little market react from SF Fed Daly riffing on familiar theme: Fed Still Has a ‘Long Way’ to Go to Defeat Inflation. Cleveland Fed Mester: "leaving inflation at these levels for long is costly".
US STOCKS: Late Equity Roundup: Key Support Held
Stocks weaker but well off key support of 3855.13 50.0% (retracement of the Oct 13 - Dec 13 uptrend) to 3882.50 in late trade. Real Estate, Consumer Discretionary and Utilities sectors continued to weigh on SPX eminis, currently trade -41.25 (-1.05%) at 3886.75; DJIA -268.49 (-0.81%) at 32941.94; Nasdaq -89.6 (-0.8%) at 10721.73.
- SPX leading/lagging sectors: Real Estate (-3.21%) with Prologis (PLD, Ventas (VTR), Welltower (WELL) and Iron Mountain (IRM) shares all trading more that 5% lower; Consumer Discretionary (-1.89%) weighed by auto makers: Ford -6.49%, Tesla -4.44%, GM -3.62%; Utilities (-1.63%) saw water services underperforming
- Leaders: Communication Services (-0.07%) with META, Netflixx and Fox bouncing from midweek selling, Materials (-0.41%) and Consumer Staples (-0.53%) followed.
- Dow Industrials Leaders/Laggers: United Health (UNH) off lows at 521.48 (-6.20), Home Depot (HD) -5.86 at 321.74, American Express (AXP) -5.0 at 145.22.
- Leaders: Caterpillar (CAT) +1.29 at 231.95, Amgen (AMGN) +30.0 at 266.44, Dow Ind -0.16 at 49.37.
US: FED Reverse Repo Operation
NY Fed reverse repo usage climbs to $2,126.540B w/ 100 counterparties vs. $2,123.995B in the prior session. Prior record high stands at $2,425.910B on Friday, September 30.
NY Federal Reserve/MNI
