Equity markets are lower as CPI came in hotter than expectations. Initial and continuing claims were revised higher, and 21B in 30 year bonds will be auctioned at 12:00 CST.
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. The equity markets slump here today, and Bitcoin ETFs see their first day of trade. 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. You can subscribe that way. We’d love for you to follow us, we would love for you to help us build our following.
Equity markets are in negative territory here today. We’re seeing the first day of trade for these spot Bitcoin ETFs as well. A lot of volume when looking at some of these cryptocurrencies. Ethereum’s in positive territory, Bitcoin was in positive territory but did reverse a little bit, pretty correlated with risk assets and the environment here today that we’re seeing.
We got the release of some important economic data. CPI came in a little bit hotter than expectations for the month of December. We thought we saw a 310 increase versus a 2/10 estimate. That puts a year-over-year number at 3.4% versus 3.2% expected. So, things did heat up a little bit in December when looking at inflation.
However, one thing I want to highlight specifically, breaking down some of these components inside of inflation, is we really saw the uptick come from the services side of things. Core services, when you peel that back and you look in some of the data, you can see a noticeable uptick in medical care services, specifically hospital services, you know, insurance as well. However, also looking at an area that’s kind of a seasonal pattern that we typically see, and that is cable and satellite radio and television services. During this time of the year, December, January, the holiday season, you typically see families spend more in those areas. So, I do think that that’s one component that’s definitely showing a pretty large uptick just because of seasonal holiday spending patterns.
So, I wouldn’t expect to see this one heat up too much. It is a little bit discouraging to see some of these other areas start to pick up, and energies was also a large contributor as well. You’ve seen net gas prices move up higher, crude oil as well. Overall, though, I would say it is a pretty decent inflation report. Shelter and owner’s equivalent rent still coming in lower, it’s still pretty sticky, you know, pretty elevated levels, but you are seeing a noticeable trend lower in some of those highly weighted components inside of CPI.
Later today, you’re going to get 21 billion in 30-year bond issuance, so a bond auction going to be pretty important for the markets here. So, we’re already in negative territory, so you see weaker demand come through for that. We could see this move exacerbated a little bit more to the downside.
Tomorrow, PPI, producer prices, this one’s going to be really important because we’re seeing a little bit of stickiness here today with core services, you know, spending categories and such. And I think the risk would really be if you also saw a noticeable uptick, something with pretty high substance, you know, in producer prices. We could see that, especially as energy prices have moved up a bit. But that’s what you know, you definitely want to pay attention to. You don’t want to see PPI reaccelerate too much either. Hopefully, we see it coming in line with expectations, and if it is a bit hot, nothing noticeably higher.
Now looking at the S&P, three-star support 47675 to 4771 and a half, that’s a three-star level that we pegged in our research, so pretty significant to pay attention to there. You want to see that level held. Three-star support for the NASDAQ, 16776 to 16813. A three-star resistance level for crude, as crude prices are higher here today, 7416 to 7429. And gold, three-star support 2012 and A2 to 2017 and A2. You want to see those levels held on the support side.
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.”
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