BP suspends oil tanker traffic through the Red Sea, lifting Crude. Stocks are in positive territory and precious metals lag. Probabilities for an interest rate cut in March 2024 are now at 70%.
TRANSCRIPT
Good afternoon traders. It’s Chris Chavez with Blue Line Futures and it’s your daily midday market minute crude outperforms here today on geopolitical risks. But before we get to it, if you’re watching this video like its subscribers, you’re on our website. There’s 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 we’re seeing crude outperform risk assets here today. The Nasdaq and the S&P are in slightly positive territory, up about a half a percent or so. But really, the major headlines, BP, the British Petroleum Company, they’re going to be suspending oil tanker traffic through the Red Sea, you know, following attacks on, you know, ships from Yemen to Israel.
So, really, you know, you’re seeing that risk premium starting to get baked in to the crude market here today. Surprisingly, not really seeing anything follow through in the precious metals is a, you know, kind of a war premium geopolitical risk. But I do think that, again, if we’re starting to see some of these geopolitical risks ramp up again, you know, definitely going to see some of these commodities outperform specifically energies in this scenario and crude oil.
But I do think that it’s possible we could start to see that spillover into some of the other flight to safety assets like gold and potentially silver as well. So definitely going to be something that you’re going to want to keep an eye on. Do you want to touch base on some of the other macro markets in the S&P?
The Nasdaq here today were in positive territory, but this week is not extremely data driven. We will get, you know, GDP, PCE, that’s the Fed’s preferred inflation indicator later this week, we’re going to get some housing data building permits, you know, initial and continuing claims later in the week as well. Michigan data is going to be important to other than that, not really going to see a lot.
You know, currently looking at interest rates. You know, today we are seeing yields in positive territory, you know, bond curve. You know, just about most of the treasuries, you know, yield curve are trading lower here today. When you look at expectations, you know, going out to March of 20, 24, 70 plus percent chance of a cut in March.
We’re looking at, you know, the May meeting, 94% chance of a cut in May. So really looking like, you know, again, after the Fed’s SEP summary of economic economic projections last week really start to see these probabilities ramp up. Obviously the data this week will matter. But, you know, we’re not seeing a significant amount of jobs data. The Michigan consumer sentiment and inflation expectations will help some this week.
But, you know, to continue to see more upside, right. We’ve seen a breakout on the continuous futures contracts looking at some of the equity indices like the Nasdaq. We’re going to continue to see more upside. Really, the S&P, the U.S. futures are March futures. We’re going to want to see a break in close above major three star resistance.
That’s 47, 88 to 47, 91 and three quarters when looking at the Nasdaq, 6935. That’s what you’re going to want to see, a break in close above there to continue to see us, you know, push higher gold in 2070. That’s three star resistance. So especially with some of this war premium, you know, starting to get baked in, we’ve started to see some Fed officials come out and kind of walk back this you know, pause, you know, extended pause and potential pivots that Powell kind of outlined in this press conference last week.
So this Jekyll and Hyde approach that we’re seeing is definitely going to be a risk. You know, when looking at macro assets, you know, risk assets as a whole, but especially gold. So 27 is a major three star level to keep an eye on a break in close above their lead us back up to 2100 and crude oil with some of this geopolitical risk 2075 72 7605.
That’s three star resistance If we can break in close above there, definitely looks like it’s confirming a bit of a reversal, especially if we are on the cusp of also seeing interest rate cut sooner than expected, more stimulus potentially coming back into the system or at least, you know, easier financial conditions, easier financial conditions on the consumer spending for transportation and travel definitely think that that would look better as well.
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