Nearly all risk assets are positive after PCE came in at expectations. Pending home sales and Chicago PMI showed weakness, while crude oil is trying to break out!
Transcript
Good afternoon traders. It’s Chris Chavez with blue line futures and it’s your daily, midday market minute. We’re seeing a broad based risk asset rally 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, you can subscribe that way, we would love for you to follow us, we would love for you to help us build our following. Looking at the markets here today, we had a lot of economic data come out. The most important really that everybody’s eyes were on was the PCE, the Feds preferred inflation indicator personal consumption expenditures, which rose at the fastest pace since May of last year. However, expectations after CPI and PPI you know, kind of push this number up and the PCE numbers actually came in at expectation. So it’s good that the number came in at expectations but you still saw, you know, personal consumption expenditures, and that Feds preferred inflation indicator heat up at the fastest level seen since May of last year. One thing important to note is that the PCE number for December was actually revised lower from two tenths to 110. Something interesting to see yields today are slightly lower, not by much, you know, the tenure is down about three basis points and with yields coming down a bit. And some slight shift in interest rate cut expectations in July. And it’s fueling a broad base risk asset rally, precious metals are higher, and looking at stock indices also higher here today. But one thing interesting to see, you know, throughout the risk asset landscape, even looking at crude oil is just about every risk asset is off of the highs, you know, cryptocurrencies Bitcoin, we’re all trading higher, you know, stock indices, the Russell was the big outperforming here this morning. And now it’s fallen into second place with the NASDAQ being the big outperformer. But just about every risk asset is off of the highs. So definitely interesting price action to see. Again, there wasn’t a huge move in yields. When looking at some of the other data that we got Chicago PMI continued to contract, we also got a really weak pending home sales number for the month of January appending. Homes of pending home sales fall off fell by 4.9% versus an expected 1.4% increase. So you really saw a pretty shocking number there. jobless claims came in slightly above estimates and we also got a larger revision a higher revision to last week’s numbers too. So, you know, personally, I think, you know, precious metals are responding really to, you know, the jobless claims numbers that we’re getting and yields being slightly lower, but really not anything of significance. You know, one thing I would say is, especially with pending home sales, and, you know, recent move that we’ve seen an interest rate yields definitely looking like, you know, housing can continue to fall, which when you look at PCE and what we got today, that was reflected, you know, really seeing consumer sensitive to interest rates, specifically when purchasing homes, and obviously a major driver of the economy and of inflation. So you’re starting to see that area, you know, come down a little bit which is definitely good, but not a lot of economic weakness as far as jobless claims in the labor market are concerned. Now, the CME FedWatch tool didn’t really change much today when looking at the July interest rate cut expectations moved up slightly from about 85% to like 87% Again, nothing nothing really of importance to note they’re all risk assets are just about off of the highs here today. Bitcoin tried to test yesterday’s highs and reverse which were the 52 week highs tomorrow what we’re gonna get our manufacturing numbers IsSm s&p global and consumer sentiment, interest rate or inflation expectations rather one and five, your expectations, all of which can be really important for the markets. The same technical levels that we highlighted yesterday are the same ones today. As you know, we’re kind of pushing we’re failing to push through some of these resistance levels for the s&p to start resistance 5097 and three quarters to 51 to one and a half, where the NASDAQ two star level is going to be 18,050 to 18,071. Again, we want to break and close above both of these which we failed to do that today. So far, looking at crude oil Forestar resistance is going to still be 7966 you need a break and close above there to see a breakout silver three star support which we did test in the overnight session we are off of blows 2243 to 2251 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.