Market in Review 1/24/2024

MARKET REPORT

Review:
– SP & Nasdaq close record highs
– Broader Equities flat, Nasdaq up 0.5%
– Nvidia +2.5% all to time highs, Microsoft, Meta all time highs, ASML up on quarterly results
– Dollar touch weaker, rallied into the afternoon
– Gold Hit 2036 before falling off cliff
– Crypto flat after dump
– Canada keeps rates UNCH at 5% (Act & Prev)
– Stellar US Flash PMIs
– Dismal US 5yr auction
– US crude production falls 1mln BPD amid cold weather
– PBoC cut its RRR
– Mixed European Flash PMIs
– NFLX impresses

DOLLAR:
– AUD UNCH: 65.78               UNCH (65.73 – 66.20) close LOWS
– EUR down smalls: 91.87     -0.25% (92.05 – 91.45) Close mid to high rge
– GPB up smalls: 127.18         +0.3% (126.98 – 127.72) close mid to low rge
– JPY down: 147.61                  -0.5% (148.00 – 146.68) close mid to high rge

GOLD down: $2013                -0.6% ($2036 – $2013) close LOWS
DOW/ES/ND:                          38000 -0.2%, 4900 FLAT, 17620 +0.5%
CRYPTO: BTC/ETH:              +350/0.9% 39570, UNCH 2205
CRUDE: $75.35                       $+0.98/+1.32%

Upcoming:

DE: IFO bus conditions
EU: IR Decision (Unch at 4.5.% Exp and Prev)

US: GDP, Durable Goods, Weekly Job, Core PCE, New Home Sales.

JAP: CPI

Speakers: ECB President Lagarde Press Conference; Norges Bank Governor Bache Press Conference

Earnings:  Nokia, STMicroelectronics, LVMH, Intel, Visa, Blackstone

MAJORS:

DX:
The Dollar was lower on Wednesday, albeit well off worst levels at pixel time, as it was initially heavily weighed on by broad risk-on sentiment which saw the Greenback hit a low of 102.77. However, the Buck came off worst levels after strong S&P Global Flash PMIs for January. Briefly recapping, Manufacturing rose back into expansionary territory, printing a 15-month high of 50.3 (exp. & prev. 47.9), while Services and Composite lifted to 52.9 (prev. 51.4, exp. 51.0) and 52.3 (prev. 50.9), respectively, with the report showing strong growth and cooling inflation. Thereafter, the Dollar revival accelerated in wake of a dismal US 5yr auction, supporting yields. Looking ahead, attention resides around Q4 GDP (Thurs) and PCE (Fri).

No call pre GDP

1

AUD:
“ANYTHING above 66 is A SELL!”
Yest Mkt Report.
We traded up to 66.20 overnight before getting slapped back down on strong Flash PMI data US morning (see above). We traded down to 65.76 where it stayed.

No call pre US data.

9

EUR:
EUR saw similar gains vs. the Buck, but currently sit well off strongest levels on account of the aforementioned Dollar pullback. On the day, Europe saw mixed Flash PMIs for January, as headline Manufacturing for EU, Germany, and France all beat, but Services and Composite fell short.
Traders await the ECB meeting on Thursday, followed by President Lagarde’s press conference.

No call pre ECB.

9

POUND:
The Pound saw strength in the aftermath of strong PMIs, as manufacturing, Services, and Composite all topped expectations.

No call.

1

YEN:
The Yen outperformed vs the Dollar, seeing continued tailwinds from the hawkish BoJ. USD/JPY hit a low of 146.66 and went through several key levels on the way, such as the 100DMA at 147.46, but has seen a big bounce off the lows trading back to close 147.50+

No call

1

GOLD & SILVER:
“Gold is capped, anything above 2035 raging sell.”
We touched 2036 4 times before falling of a cliff to 2013. Where we closed.

EQUITIES:
US:
– SPX +0.08% 4,868
– NDX +0.55% 17,499
– DJIA -0.26% 37,806
– RUT -0.73% at 1,961.

EUR:
– DAX: +1.58% 16,889.92
– FTSE 100 +0.56% 7,527.67
– CAC 40 +0.91% 7,455.64
– Euro Stoxx 50 +2.17% 4,562.85

SECTORS (S to W): Energy +1.43%, Communication Services +1.17%, Technology +0.77%, Financials +0.46%, Consumer Discretionary -0.24%, Industrials -0.64%, Health -0.91%, Consumer Staples -1.23%, Real Estate -1.36%, Utilities -1.38%, Materials -1.4%

Netflix +10.7%: Added more subscribers than expected, topped revenue estimates amid its membership push gaining momentum with next quarter EPS guidance better-than-expected.
ASML ADR +8.9%: Strong report, with Q4 metrics impressing, though the Q1 net sales view was extremely light.
Tesla -0.6%: Aims to commence production of a new affordable EV, codenamed “Redwood,” in mid-2025, which is being described as a compact crossover.
BlackBerry -17.6%: Plans a private offering of USD 160mln convertible senior notes due 2029
General Dynamics +4.9%: Revenue rose on strong defense demand. However, FY24 EPS view was short.
AT&T -2.9%: Missed on profit with FY24 outlook light, contrasting Verizon’s (VZ) stellar report on Tuesday.
Dupont -14%: Offered a dismal prelim Q1 preannouncement, weighing on peers such as Eastman Chemical (EMN) and Dow (DOW).
eBay +0.5%: Plans to reduce its workforce by around 9%.


OIL
:
WTI (H4) SETTLED USD 0.72 HIGHER AT 75.09/BBL; BRENT (H4) SETTLED USD 0.49 HIGHER AT 80.04/BBL

The crude complex was firmer on Wednesday on account of broader risk appetite, heightened Middle East tensions, and a chunky fall in weekly EIA crude production. WTI and Brent began the European session on a positive footing as it was helped by risk-on sentiment (PBoC RRR cut coupled with positive stock earnings and Dollar weakness). Then, as US participants joined for the day, WTI and Brent continued their upward trajectory and rose to session highs of USD 75.83/bbl and 80.73/bbl, respectively, after the EIA data where Production fell 1mln BPD to 12.3mln BPD amid the winter storms impact. Elsewhere, all in fitting with the private inventory metrics, crude posted a deeper draw than expected, gasoline was a larger build than forecasted and distillates was a surprise draw. However, in wake of a dismal US 5yr note auction (which hampered sentiment, boosted US yields, and supported the Dollar), oil prices retraced off aforementioned highs. On the geopolitical footing, Middle East tensions continue to escalate with an Israeli government spokesperson noting there will be no Gaza ceasefire and it will not give up on destroying Hamas and returning all hostages. There was also some fears of a widening conflict after the Israeli Economy Minister told The Telegraph that Iran is now a legitimate target for Israeli missile strikes. Looking ahead, participants await ECB, US Q4 GDP (Thurs), PCE (Fri) and a slew of earnings. Oil report courtesy of newsquark

BOND YIELDS:

US 1-MO 5.368 -0.016 US 6-MO 5.242 +0.008 US 1-YR 4.83 +0.025 US 5-YR 4.092 +0.041 US 10-YR 4.18 +0.038 US 30-YR 4.411 +0.032
2YR/10YR -0.20

CRYPTO
BTC trading around 40k (39800) after hitting 38.5k. Believe we’re seeing a flush out of those late to the party vs any real change in momentum. I doubt we’ll see a sustained hold with a 30 handle. Expect to be back in the 40’s by next week.

ETH 2200 is pretty solid support in ETH dating back to mid Dec. Id be looking for a move up.

Best of luck out there. Let the market come to you

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