Traders Market Weekly: Fed Psychosis Reaches Next Level

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    The stock market struggled out of the gate, as oil prices flirted with $130 per barrel in anticipation for the U.S. to ban energy imports from Russia. On a related note, the UK and EU said they would phase out their Russian energy imports this year, but the UK said it was still exploring options for a ban on gas imports.

    Soon after President Biden announced the ban, stocks carved out a bottom and then rallied to session highs amid a report indicating that Ukraine was no longer insisting on NATO membership.

    The S&P 500 went from a 0.7% intraday decline to a 1.8% intraday gain. Crude futures pared gains and settled at $123.76/bbl (+$4.49, +3.8%).

    The rally off the lows was likely driven by short-covering activity from investors caught off guard by the market’s sell-the-rumor, buy-the-fact response. Unfortunately, the gains didn’t last long because the market turned negative after reports indicated that President Putin was going to ban the export of products and raw materials from the Russian Federation until Dec. 31.

    The volatile price action frustrated investors, but at least the Treasury market communicated a more consistent message through its steady rise in yields. Namely, the Russia-Ukraine situation is expected to exacerbate inflation pressures via supply chain disruptions and, in turn, force the Fed to react with tighter monetary policy.

    The 2-yr yield rose nine basis points to 1.63%, and the 10-yr yield rose 12 basis points to 1.87%. The U.S. Dollar Index decreased 0.2% to 99.06.


    U.S. Treasuries ended Tuesday on a sharply lower note with the bulk of the losses taking place at the open. Treasuries stumbled out of the gate after Treasury futures faced early morning pressure alongside other sovereign debt while commodity prices remained in focus. A surge in nickel, which eventually prompted a trading halt in London, was a headline story while crude oil approached yesterday’s high before pulling back during the day.

    The long bond spent today’s session in a sideways range near its opening level but inched above its opening mark in the afternoon while shorter tenors added to their losses in the early afternoon with the 2-yr yield hitting its highest level since mid-December 2019 shortly after the completion of today’s $48 bln 3-yr note auction. The auction was met with lukewarm demand ahead of tomorrow’s $34 bln 10-yr note reopening and a $20 bln 30-yr bond reopening on Thursday. The U.S. Dollar Index slipped 0.2% to 99.06.

    Yield Check:
    2-yr: +9 bps to 1.63%
    3-yr: +10 bps to 1.77%
    5-yr: +12 bps to 1.81%
    10-yr: +12 bps to 1.87%
    30-yr: +9 bps to 2.24%


    Poland will hand over its 28 MiG-29 jets to the U.S. at the Rammstein Base in Germany in exchange for 28 F-16 planes. The 28 Soviet-era planes are expected to then be transferred to Ukraine despite a warning from the Russian president that this could be seen as an act of war.


    Dow 32,632.44 -184.94 -0.56%
    S&P 500 4,170.70 -30.39 -0.72%
    Nasdaq 12,795.55 -35.41 -0.28%
    GlobalDow 3,815.35 -9.81 -0.26%
    Gold 2,056.80 60.90 3.05%
    Oil 124.08 4.68 3.92%


    Like a loaded spring MARKETS soar on opening bell … DOW +600 points
    As OIL goes on “SALE” today from $123 to $117 (4% drop)
    However little is changed on MAIN STREET with all-time record GAS prices
    but beware of the WEREWOLVES in the pit boxes — as they may harvest WALL ST beef


    and beautiful song of PEACE that we need for the small blue marble we live upon 🙂


    DOW up almost +800 points … with 10% drop in OIL prices from $130 highs


    and as we think of WORLD PEACE … a 2nd great song by 1 of best song writers all time 🙂


    Back in AUG-2021 our hound Rudolph crossed rainbow bridge after 15 years
    Samson our baby pug of almost 9 months is similar to photo below & the story itself is a miracle
    One major difference is he chases deer & even has some deer bones he teethes on – lol
    He may be the answer to a deer-proof garden 🙂


    Dow 33,286.25 653.61 2.00%
    S&P 500 4,277.88 107.18 2.57%
    Nasdaq 13,255.55 459.99 3.59%
    GlobalDow 3,908.65 96.67 2.54%
    Gold 1,996.30 -47.00 -2.30%
    Oil 110.30 -13.40 -10.83


    JP Morgan “estimate the potential rebalancing flow for the end of March at around $230bn out of #bonds and into #equities”
    “multi-asset investors such as balanced mutual funds, US defined benefit pension plans, the Norwegian oil fund, the SNB & the GPIF”


    S&P Futures vs Fair Value: -26.0
    10 yr Note: 1.937%
    USD/JPY: 115.98 +0.13
    EUR/USD: 1.1035 -0.0041
    Europe: FTSE: -0.9% DAX: -2.2% CAC: -2.1%
    Asia: Hang Seng: +1.3% Shanghai: +1.2% Nikkei: +3.9%
    Gold (1999.70 +11.50) Silver (25.98 +0.16) Crude (113.73 +5.03)


    The global equity markets are mixed but the script has flipped this morning with Asia trading higher while the US and EU are down. S&P Futures are down about 25 points to trade around the 4250 area. High-level talks between Russia and Ukraine took place but appear to have been unproductive. S&P Futures struggled with the 4275 zone acting as solid resistance throughout the night. The market managed to put in a high print of 4282.50, but this was quickly rejected. Spoos are currently sitting closer to the low of 4240.25.

    In Asia, both China and Japan closed up on the day. The Shanghai followed Wall Street’s move from the prior day. The overall market was strong but did peel back modestly from the high set in the morning session. In Japan, the Nikkei snapped its four-day losing streak with a robust gain of nearly 4%. Automakers set the pace with names such as Nissan, Suzuki, Toyota and Honda rising 4-9%. Meanwhile, semiconductors also represented strength with Advantest and Tokyo Electron surging 4-5%.

    In Europe, the major bourses are retreating. The lack of substantial progress in talks between Russia and Ukraine dampened sentiment. Markets are also waiting the latest update from the ECB, due out later this morning. Corporate earnings remained in focus on Thursday. Carlsberg is down nearly 4% after the brewer suspended its fiscal-year outlook. Hugo Boss is trading about 5% lower after the luxury fashion company reported its fourth quarter results.


    ECB leaves key rates unchanged in March monetary policy meeting, as expected
    ECB announces their latest monetary policy decision – 10 March 2022

    Deposit facility rate -0.50%
    Main refinancing rate 0.00%
    Marginal lending facility 0.25%
    ECB revises schedule of APP purchases
    APP purchases will end in Q3
    APP volumes will be €30 billion in May and €20 billion in June
    ECB stands ready to revise schedule again if outlook changes
    Any change in key rates will come some time after APP purchases end, will be gradual


    FEB-2022 Inflation @ 7.9% was hotter than expected (and that was even before the war)
    GAS prices ALL-TIME high and the media/govt spins that USA cannot do anymore
    & not result of current executive orders, etc. in transitioning to green technology

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