BAL 
$61.00  0.29%  
CANE 
$11.23  0.97%  
JO 
$54.00  1.22%  
NIB 
$36.29  1.65%  
IEF 
$93.11  0.31%  
^UGA-IV 
$68.31  1.39%  
UNG 
$19.10  5.12%  
USO 
$76.97  0.94%  
FXA 
$66.31  0.25%  
FXB 
$122.23  0.30%  
FXC 
$71.86  0.03%  
FXE 
$100.43  0.07%  
FXF 
$97.92  0.30%  
FXY 
$59.48  0.12%  
UUP 
$28.56  0.00%  
CORN 
$20.31  0.93%  
SOYB 
$25.52  0.28%  
WEAT 
$6.09  1.30%  
JJC 
$19.56  1.24%  
GLD 
$223.66  1.65%  

Morning Market Update

market

John Caruso

John Caruso

Senior Market Strategist

 

 

 

Morning Market Update

Market Insight

 

*US announces sale of another 26M bbl of Crude Oil from the SPR: Crude -1.50% on the news

*Poll: US Fed Funds rate to peak at 5.00-5.25% in May (January poll was for 4.75-5.00%)

*Poll: US Fed will not cut rates this year, 54/80 economists

*US CPI Data due up at 7:30am CST, exp 0.5 mm and 6.2% yy

 

Today of course is headlined by US CPI.  It’s important to note that there is a new formula as to how they’re calculating CPI going forward, placing more of an emphasis on housing and less so on used cars.  Owner’s equivalent rent will now account for more than 25% of the calculation, and housing altogether will account for 44% of the CPI number.  I think its also worth noting that there is a slight discrepancy between the Cleveland Fed inflation nowcast expectations (0.6mm and 6.3yy) and Wall St expectations (0.5mm and 6.2yy).  I’m not going to pretend I know what this mornings number will be, hot or cold, but will also note that the BLS recently revised Nov and Dec inflation data higher!  Furthermore, we’ve see a pretty “hot” auto market mm with auto sales increasing 18.3% and used car prices up.

 

Stocks:  the stock market on the other hand seems pretty confident in a favorable inflation number.  The SPX climbed +1.0% yesterday, and is currently +0.31% in the premarket.  The inflation nowcast we follow is tracking for 5.77% for Q1

 

Oil:  A fairly strong steady rise in oil all of last week (+8%), but since the news of the 26m bbl sale of US SPR Crude prices have since fallen back.  All in all it’s a choppy sideways patter, not rising much past $82 or falling under $72.  Trading the edges are just about all you can do at the moment, or a convincing break through 83.50 imo.  Momentum did flip back to “positive”, however still remains bearish trend and immediate OB.

Market

 

The week should get more interesting from here, catch you on the flip side of the data.

Market Trend > 6 mo Range Low Range High Momentum OB/OS
SP500 Bearish 4013 4206 Positive 51
Nasdaq 100 Bearish 12,082 12,997 Positive 30
Russell 2000 Bearish 1911 2008 Positive 33
10yr Yield Bullish 3.48% 3.76% Positive 80
VIX Bullish 17.86 21.19 Neutral 57
Oil Bearish 74.21 81.09 Positive 80
Gold Bullish 1849 1929 Negative 46

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