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Tuesday, March 19, 2024

Just Another Manic Monday

We're off to a fast global start already.

In comments on Friday I had trouble figuring out if the FXI was pointing to an 800-point gain or a 200-point gain in China today.  I need to remember to just average myself whenever I'm confused as the Hang Seng jumped 511 points (2.5%) as China loosened some banking restrictions so Kudos to the clever FXI traders for picking up on this way ahead of the game on Friday!

Everyone in Asia was having fun this morning with a 124-point gain in the Nikkei (led by our TM!) and 169 points added to Bombay.  The dollar came back a little against they Yen, back over the critical 120-Yen mark which boosted Japanese export firms.

Europe is in a good mood this morning as DCX managed to dump Chrysler for $7.5Bn but EU energy companies are quaking in their boots as the Union opens formal antitrust cases against RWE.AG and E "over possible abuse of their dominant positions in transporting and supplying natural gas." Regulators have said they believe a few large companies control too much of the market and seldom compete across national borders.  If the companies are found to be in violation of EU law, the commission could impose fines of as much as 10% of their annual revenue.  The commission could also order "structural remedies" — such as a government-ordered breakup of the companies.

Ha ha ha, ha ha ha!  I predicted this would happen in the fall and I predicted that the Dems would take up this cause over here after the '08 elections so stay turned!

Both European stocks and US futures are trading flat ahead of our open but more bad news out of Nigeria is pushing oil and gas higher so we should get a very interesting week in the US oil markets.  We still have earnings for the week from ELOS (today); AMAT, HD and WMT (Tues); BEAS, DE, FD, HPQ, MT and PETM (Weds); ALKS, ADSK, CHINA, INTU, JWN, MRVL, PDC and TOPT (Thurs) so things are really winding down.

Data for the week according to Briefing.com is as follows:

Date ET Release For Actual Briefing.com Consensus Prior
May 15 08:30 CPI Apr   0.5% 0.5% 0.6%
May 15 08:30 Core CPI Apr

 

0.2% 0.2% 0.1%
May 15 08:30 NY Empire State Index May   8.0 9.0 3.8
May 15 09:00 Net Foreign Purchases Mar     $75.0B $58.1B
May 16 08:30 Housing Starts Apr   1480K 1480K 1518K
May 16 08:30 Building Permits Apr   1525K 1520K 1564K
May 16 09:15 Industrial Production Apr   0.2% 0.3% -0.2%
May 16 09:15 Capacity Utilization Apr   81.4% 81.5% 81.4%
May 16 10:30 Crude Inventories 05/11   NA NA 5511K
May 17 08:30 Initial Claims 05/12   315K 310K 297K
May 17 10:00 Leading Indicators Apr   -0.2% 0.0% 0.1%
May 17 12:00 Philadelphia Fed May   3.0 4.0 0.2
May 18 10:00 Mich Sentiment-Prel. May   85.0 86.5 87.1

Unless the CPI is a surprise there is nothing earth shaking here so I'll be a lot more interested in the markets reaction to the numbers than the numbers themselves.  We'll see how our levels hold up this week as we have a lot of critical spots to watch:

 

 

Day's

Must

Comfort

Break

Next

Index

Current

Move

Hold

Zone

Out

Goal

Dow 13,326 111 12,468 12,600 13,000 13,500
Transports 2,888 28 2,825 2,900 3,000 3,250
S&P 1,505 14 1,430 1,460 1,500 1,550
NYSE 9,787 117 9,218 9,465 9,600 10,000
Nasdaq 2,562 28 2,454 2,500 2,600 2,750
SOX 504 6 477 490 500 560
Russell 829 10 803 820 850 900
Hang Seng 20,979 511 20,200 20,600 21,000 22,000
Nikkei 17,677 124 17,400 17,500 18,300 18,500
BSE (India) 13,965 169 13,200 14,000 14,725 15,000
DAX 7,492 13 6,900 7,000 7,400 8,000
CAC 40 6,039 -11 5,650 5,800 6,000 7,000
FTSE 6,550

-14

6,325 6,450 6,600 7,000

13,500 is literally just 2 good days away for the Dow but it's not going to get there without the transports.  Hopefully the Russell can bring up the rear and we still need India to stop being a drag on the Asian markets.  London will be the one to watch in the Euro zone as they bounce between 6,450 and 6,600 after a rate hike and Blaire's resignation.

Gasoline is averaging a US record $3.07 as we head into the Summer Driving Season and it's hard to imagine this will continue to not matter to the US consumer but we'll have to wait about a month to get the figures in to see if demand is really as high as they say it is or if the refiners have been right to operate at less than 87% capacity all winter.  We'll continue to watch the $62.50 mark for oil this week and I no longer have a lot of confidence in a huge sell-off ahead of the June contract close as they managed to dump 200M barrels at the end of the May period without tanking the price (also with the timely aid of Nigerian rebels) last month.

Gold will struggle with $670 this week and will give us an early indication of a dollar bounce so we'll watch that and watch the dollar at 82.50 as a break above there will cause all sorts of covering.

Looks like another interesting week ahead of us!

 

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