Yields are quietly moving higher today, and stocks are consolidating. 60 Billion in 2yr notes will be auctioned at 12CST, and Silver catches a bid at major support.
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Good afternoon, traders. It’s Chris Chavez with the Blue Line Futures and it’s your daily midday market minute higher treasury clouds put pressure on stock indices here today. But 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. 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 ten year yield is trading higher here today. We do have a two year note auction due at 12 Central Standard Time, about 60 billion in new Treasury issuance. Now, when you look at dealer’s positions, we can actually see that those dealer positions, the counterparty of the Fed, have actually started to shrink a little bit.
So I think that adds up, you know, further conviction that dealers are extending duration, really wanting to capture on, you know, yields potentially coming down still. And with that shaping out with this current environment, you know, maybe we do see a little bit more of a consolidation in yields here in the short term before you really start to see economic data add conviction to the interest rate landscape and to fixed income securities.
So I wanted to highlight that today because, you know, the ten year yield pushing higher stock indices are struggling. You know, initially to start the session, the Russell 2000 was outperforming stock indices. You know, it was leading the way higher despite higher Treasury yields. And then the Russell did start to reverse lower in the day. It’s now the big underperformer amongst the broad constituents.
So, you know, when you’re looking at the markets, you know, I think that there has been a little bit of a reprise of economic growth. But, you know, under the hood, consensus estimates are still reflecting a 1.3% GDP growth rate growth rate for 2024. So, you know, there’s still an expectation that growth is going to slow. But, you know, a lot of the move that you’ve seen here as of late has been fueled by, you know, Taiwan semi’s bullish outlook and you’re starting to see some layoffs come through.
Big tech layoffs. Google announced some layoffs. Bank of America’s potentially announcing more layoffs. So that could be a big headwind for the labor market if you start to see more corporate layoffs, that could put pressure on the consumer and put pressure on the economy. And then maybe you start to see yields come down, which would again support dealers adding more positions in longer duration securities rather than having more positions in shorter durations like the two year notes.
And you can see that reflected with the substantial decrease in dealer positions in the two year note. So, you know, really the important thing data, it’s going to remain that way. Tomorrow we’ll get S&P, global manufacturing, global services and global PMI. Those will be really important reads for the markets and some of these support and resistance levels that I want to highlight as same levels that we were watching yesterday.
As you know, a lot of these stock indices are consolidating. Again, the Russell really outperforming, but we’re just about unchanged on the day. So if we do start to make our way lower into the close, I want to pay attention to 48, 69 and a half for the S&P. Nasdaq, I want to watch 17 for 16 to 17 for 38 crude oil.
We did reverse off of the lows. You know, crude oil really whipsawed today. You know, before we opened here in the overnight session, we were in positive territory. We reversed sharply. Now we’re off of the lows and pushing higher right about unchanged today. So I want to see crude still break above 75, 32, 75, 71. And silver, I want us to maintain 2205 is major support.
Now we are in positive territory here today. We did get some dovish comments from the BOJ yesterday as well. So I think that’s adding a little bit of risk appetite for precious metals. Going to want to see some of these levels held though, before we can make our way higher. If we do start to consolidate or trade lower in the near-term.
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