The market is now pricing in five interest rate cuts in 2024. Crude outperforms, and Silver tries to hold trendline support.
AUTO-TRANSCRIBED:
“Good afternoon Traders, it’s Chris Chavis with Blue Line Futures, and it’s your daily midday Market minute. Equity markets are consolidating here today as rate cut expectations fall. Before we get to it, if you’re watching this video, like it, subscribe if you’re on our website, there’s also a link to direct you to YouTube, and you can subscribe that way. We’d love for you to follow us, we would love for you to help us build our following.
So the equity markets are consolidating here a bit today. Interest rate cut expectations, the Market’s interest rate expectations have fallen just a bit to about 125 basis points, five interest rate cuts now being priced in for 2024. Looking at the equity markets, the Russell is the big underperformer, followed by the Dow Jones, then the S&P which is fractionally positive, the NASDAQ as of this video up about a tenth of a percent or so. So really, you know, broad-based Equity markets are consolidating here.
Crude oil really the outperformer amongst risk assets today, gold slightly higher, silver struggling but silver does look constructive holding trend line support. The data and the treasury issuance that is coming to Market this week will really play a role for all of these risk Assets. Now one thing I really do want to highlight is the latest fed summary of economic projections showed that the median estimates of FOMC voting members was 475 basis points at the end of 2024. So that’s about 75 basis points worth of cuts from where the FED funds terminal rate is now. Now the Market’s pricing in, as of today like I mentioned earlier, 125 basis points worth of cuts. So, you know, the market is pricing in 50 basis points more, uh, 50 basis points more than the FED is.
So I want to highlight that, you know, lately it seems as though the market has really been trading on, you know, six cuts versus five cuts, 50 basis points versus 125 basis points. Today it does seem like the markets are getting away from that a little bit, and I do like to see the NASDAQ, you know, try to enter positive territory even though interest rate cut expectations are falling. Now one thing I do want to highlight is there is still a spread between the Market’s expectations and the FEDS, you know, 50 basis points to 75 basis points on any given day. So if you do start to see that narrow even more because data is starting to heat up, that could definitely pose a risk to risk assets, equities, precious metals as well. So definitely something to continue to pay attention to.
When looking at today, it wasn’t a data-driven day. We did get Atlanta fed GDP now revised lower to 2.2%. Uh, we’re also going to get a treasury auction here today, three-year note auction due at 12 Central Standard time. Tomorrow we will see another note auction, a 10-year note auction, crude inventories, and more fed talk. Looking at some of these support and resistance levels, Three Star level to pay attention to for the S&P, uh, 4796 to 4801, and a cue that 4,800 level still that psychologically significant level to pay attention to. NASDAQ three-star resistance 16788 to 16812, you want to see a break and close above this level. And in crude oil, three-star resistance level is going to be 7291 to 7330, same thing, you want to see a break and close above this level. Gold four-star resistance since 2071 and 1110th, that’s four-star major resistance that we’ve pegged in our research here.
Now if you do see some of this inflation data slow, some strong treasury auctions as well, we likely would see a little bit of a boost in Precious Metals. That’s a level to pay attention to. 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 it’s not suitable for all investors.”
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