The odds of a rate cut in March of 2024 now stand at 74%. The Atlanta Fed’s GDPNow for Q4 was revised higher, increasing from 2.6% to 2.7%. Is this indicative of the Goldilocks narrative?
TRANSCRIPT
Good afternoon traders. It’s Chris Chavez with Blue Line Futures and it’s your daily midday market minute. The Russell is outperforming here today, but before we get to it, if you’re watching this video, like, and subscribe, if you’re on our website, there’s also a link to direct you to YouTube and you could subscribe that way. We’d love for you to follow us. We would love for you to help us build our following. Yeah. So looking at the 10-year yield today, trading right around 390 basis points, still below that 4% 400 basis point handle the 74% chance of a cut. Now in March of 2024, that’s up from yesterday, 70% just starting to see odds, you know, tick up just a little bit here. We’ve got a mixed bag this morning. Housing data did see building permits, uh, slow down just a little bit, but housing starts did come in above estimates, you know, seeing weaker US dollar here today, precious metals catching a bid, no crude oil is also catching a bid, but the Russell’s the big outperformer. Now, one thing I want to highlight is Atlanta Fed GDP. Now revised a little bit higher up from 2.6%. Uh, Atlanta Fed GDP now is now calling for 2.7%. So it definitely seems like a little bit of a Goldilocks narrative, right? We’ve seen yields come down. Now it’s looking like, you know, at least Atlanta Fed GDP now is forecasting relatively modest growth up from, you know, the previous numbers that we’ve seen week over week. And I think that’s definitely the Goldilocks narrative that the market wants to see here. So you’re seeing the Russell catching a nice bid and it is outperforming, but the NASDAQ, the S&P, and the Dow Jones, all in positive territory as well. We get consumer confidence numbers tomorrow, really important to pay attention to. Um, we’re also going to get GDP and PCE prices on Thursday. Now looking at some of these major levels of 4,808 and a quarter for the S&P that’s major three-star resistance. We’re trading right above there right now. So we really want to see a break and close above this level NASDAQ 17,000. That’s a psychological level, but two-star resistance, not as significant. You want to see a break and close above there and crude oil, three-star resistance, 73, 98 to 74 and a quarter. Now I want to reference Atlanta Fed GDP. Now, again, as we’re starting to see these numbers tick up and potentially, if we see stronger than expected consumer confidence numbers tomorrow, I think that restores a little bit more in the demand, uh, side and sentiment of the crude oil trade. And we’ve started to build out a little bit of a low here as of late. So if you’re starting to see the prospect of economic growth, ticking up potentially a stronger than expected consumer relative to the previous narrative of seeing a weaker consumer here that we’ve heard as of late, I think we could start to see crude oil build out a little bit of a bottom. Of course, that, uh, three-star level that I highlighted is going to be an important one to pay attention to. You want to see a break and close above their gold 20, 69 and a half to 20, 70, uh, and one 10th. That’s a three-star level to pay attention to again, seeing a weaker U S dollar here today, lower treasury yields, and data’s going to be the driver for gold moving forward. If you have any questions, reach out to our trade desk. We’re here for you. Remember futures trading involves substantial risk of loss and is not suitable for all investors.