Yields on the longer end of the curve are higher, and the CME FedWatch tool shows a 15% chance of a hike in December. Crude is catching a bid off of OPECs comments, and equity markets await economic data later this week.
Chris Chavez, Market Strategist
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Good afternoon traders. It’s Chris Chavez with Blue Line Futures and it’s your daily midday market minute. Stocks are slightly negative to kick off the trading week ahead of a lot of economic data. But before we get to it, if you’re watching this video like it, subscribe if you’re on our website, there is also a link to direct you to YouTube and you can subscribe that way.
We would love for you to follow us. We would love for you to help us build our following. So stocks are slightly negative here today. When looking at yields, we’re actually seeing the longer end of the curve. We’re seeing some weakness. So yields are positive on the longer end, on the on the on the shorter end, we’re seeing yields in negative territory.
Bonds are actually slightly or Bill’s notes slightly in positive territory. So we’re seeing the steepening trade take effect today, slightly ahead of a lot of economic data this week. You know, we have inflation CPI, Tuesday, Wednesday and then we also have Atlanta Fed GDP. Now on Friday, we’re going to get, you know, industrial production numbers, housing data, building permits starts.
So there is a lot of data to keep an eye on this week, a lot that’s going to influence yields. And when looking at the CME Fed watch tool right now, we could see a 14.3 to 15% probability of a hike in December. So we have started to see these odds slightly tick up. You know, previously, you know, looking last week, we were as low as, you know, 9%.
They’ve started to creep up. They started to creep up a little bit. So, you know, depending on what data we see this week, you know, inflation numbers, everything like that, because the interest rate expectations change a little bit for that December meeting and it’s going to definitely impact risk assets. So we’re going to want to pay attention to that.
Definitely going to have to keep nimble when looking at crude oil. We’ve seen a lot of these energy prices which have made up a pretty large component of the CPI basket. And, you know, reason that we were seeing CPI in hot territory in the first place was because of, you know, the move that we’ve seen in crude oil.
So now that we’re coming off of those highs, we’re bit lower when looking at some of these energy prices. We’re hopeful that maybe that would be a, you know, a bullish catalyst, sending the market higher, seeing inflation come in under expectations. But when you do look at crude oil, you know, OPEC did come out and they were upbeat on their oil estimates, raising current year estimates they left 2024 unchanged.
So really, OPEC’s not pricing in any weakness in oil demand. You know, crude oil is positive here today. And I think that’s really what you’ve seen in the landscape as of late. Everybody was just, you know, talking about how, you know, we’re expecting lower demand because of maybe holiday spending season and things like that. But definitely going to be something to pay attention to is the data that we see this week, how interest rate expectations change when looking at the S&P major three star resistance is going to be 4447.
So now we start to break above this little V-shaped recovery that we’re seeing here as of late, 44, 77 or 44, 47. It’s going to be that real important level to watch. NASDAQ three star resistance is going to be 15, six, 27 to 15, 673. Again, that V-shape recovery starting to take effect here off of these lows. You’re going to want to get above some of these key levels to to to see more momentum and crude oil, 78, 74 to 78, 89.
Another key level you’re really going to want to pay attention to to see more strength as we’re kind of battling these lows, finding some support here. If you have any questions, reach out to our trade desk. We’re here for you. Remember, futures trading involves substantial risk of loss is not suitable for all investors.
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