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March 19 – March 25, 2022 FEAR NOT Brave Investors Where have we been and where are we going? Join our weekly market thread on Traders Community… Imag[See the full post at:
Traders Market Weekly: Only a Sheep Lets Himself be Sheared]
Market Updates
S&P Futures vs Fair Value: -5.0
10 yr Note: 2.197%
USD/JPY: 119.25 +0.10
EUR/USD: 1.1062 +0.0011
Europe: FTSE: +0.5% DAX: +0.1% CAC: +0.2%
Asia: Hang Seng: -0.9% Shanghai: +0.1% Nikkei: CLOSED
Gold (1923.90 -5.40) Silver (25.17 +0.08) Crude (108.95 +4.25)The global equity markets are off to muted starts. S&P Futures are down by about four points to trade around the 4450 area. After closing near the high of the day and week on Friday, the market has eased back. Buyers stepped in and defended the low of 4430.75. The high was set early in the session at 4463.25.
In Asia, China gained 0.1% while Japan was closed for public holiday. The Shanghai traded in a narrow range throughout the day. The uninspired action may have been the result of the PBOC leaving its benchmark interest rates unchanged. Meanwhile, the Nikkei was closed in honor of the Vernal Equinox.
In Europe, the major bourses are slightly higher. Markets saw a relief in the German PPI data. The February print rose just 1.4%, below the estimate of 1.7%. The FTSE is outperforming the region on the back of strength in energy names. Both BP and Shell are up about 2.5% in response to crude oil’s flirtation with the $109 area.
S&P 500 futures 0.2% above fair value; Nasdaq 100 futures 0.1% below fair value; DJIA futures 0.1% above fair value
Key factors driving the futures market:
Assumptions that market will take some time to consolidate last week’s big gains
Impression that Russia-Ukraine situation is getting bogged down and that a ceasefire agreement won’t be reached as soon as hoped
Higher oil prices as reports indicate EU officials are mulling embargo on Russian oil; Houthi rebels attack Saudi Arabian oil refinery
Treasury yields jump on inflation and rate-hike concerns
Boeing (BA) slumps 5.9% following report of crash of China Eastern Boeing 737
Anaplan (PLAN) to be acquired by Thoma Bravo for $10.7 billion, or $66.00 per share, in cash
Berkshire Hathaway (BRK.B) to acquire Allegheny Corp. (Y) for ~$11.6 billion, or $848.02 per share, in cash
Reuters reports Australia has banned export of alumina and aluminum ores to Russia
Fed Chair Powell to give speech at 12:00 p.m. ET on economic outlook to NABE Conference
China eases lockdown measures in Shenzhen but tightens measures elsewhere; Shanghai Disney closed until further notice
Research calls of note:
Upgrades: APD, AWI, ASB, BB, CBSH, DB, DUOL, MANU
Downgrades: CHKP, EHTH, FBHS, HUN, IMGN, IBP, JOAN
WTI crude futures +4.0% to $108.86/bbl; Brent crude futures +4.4% to $112.68/bbl
10-yr note yield +5 bps to 2.20%; 2-yr note yield +5 bps to 2.01%
There is no U.S. economic data of note todayJapan’s Nikkei: closed for holiday
Hong Kong’s Hang Seng: -0.9%
China’s Shanghai Composite: +0.1%
India’s Sensex: -1.0%
South Korea’s Kospi: -0.8%
Australia’s ASX All Ordinaries: -0.2%Major European indices are mostly holding form with modest gains ahead of the U.S. open. The Russia-Ukraine situation hasn’t been prone to progress in peace talks.
STOXX Europe 600: +0.1%
Germany’s DAX: -0.1%
U.K.’s FTSE 100: +0.5%
France’s CAC 40: -0.2%
Italy’s FTSE MIB: +0.7%
Spain’s IBEX 35: +0.2%Boeing (BA 180.80, -12.03): -6.2% after a 737-800 jet crashed in China.
Nielsen Holdings (NLSN 20.21, -4.23): -17.3% after the company’s board rejected an unsolicited acquisition offer at $24.50/share.
Anaplan (PLAN 64.90, +14.31): +28.3% after agreeing to be acquired by Thoma Bravo for $66.00/share.
ImmunoGen (IMGN 4.37, -0.89): -16.9% despite releasing positive results from one of its trials.Dow 34,552.99 -201.94 -0.58%
S&P 500 4,461.18 -1.94 -0.04%
Nasdaq 13,838.46 -55.38 -0.40%
GlobalDow 4,043.26 9.00 0.22%
Gold 1,934.60 5.30 0.27%
Oil 112.03 7.33 7.00%Japan finance minister Shunichi Suzuki comments on Yen Weakness with #USDJPY up over 130 pips to 120.90
– Weak yen is both positive and negative for the economy
– Currency stability is important
– Rapid moves are undesirableEurozone January construction output +3.9% vs -4.0% m/m prior
Latest data released by Eurostat – 22 March 2022Prior -4.0%; revised to -1.5%
Construction output +4.1% y/y
Prior -3.9%; revised to +0.2%Strong bounce, alongside a sharp revision higher to the December figures. Of note, building construction increased by 4.2% and civil engineering by 1.4% in January.
Of course this is all prior to the Russian invasion so loses value.
Market Updates
S&P Futures vs Fair Value: +13.0
10 yr Note: 2.361%
USD/JPY: 120.54 +1.07
EUR/USD: 1.1005 -0.0011
Europe: FTSE: +0.5% DAX: +1.1% CAC: +0.8%
Asia: Hang Seng: +3.2% Shanghai: +0.2% Nikkei: +1.5%
Gold (1924.30 -5.20) Silver (25.26 -0.05) Crude (109.70 -2.42)Overnight Summary — World markets spring up
The global equity markets are off to strong starts. S&P Futures have extended gains from yesterday to trade about 12 points higher to around the 4465 area. Trading was range bound throughout the Asian session but expanded once Europe came online. The low was set at 4433.00 while the high was established a short time ago at 4472.50.
In Asia, China gained 0.2% while Japan returned from public holiday to gain 1.5%. The Shanghai was kept afloat by more pledges from the nation’s cabinet to support the economy. Hong Kong rose over 3% after Alibaba increased its share repurchase program. In Japan, the Nikkei rose on the back of a weaker yen. Financials were strong, led by Mitsubishi UFJ Financial Group, which jumped nearly 6%.
In Europe, the major bourses are pushing to higher ground. Similar to Japan, financials are leading the way to gains. Banks across the region such as Deutsche Bank, Commerzbank, HSBC, BNP Paribas, Credit Agricole and Societe Generale are all up over 2%. Automotives are doing well with the likes of BMW, Volkswagen, Stellantis and Renault trading about 2% better.
Market Updates
S&P Futures vs Fair Value: -13.0
10 yr Note: 2.375%
USD/JPY: 120.93 +0.12
EUR/USD: 1.1014 -0.0016
Europe: FTSE: +0.3% DAX: -0.3% CAC: -0.3%
Asia: Hang Seng: +1.2% Shanghai: +0.3% Nikkei: +3.0%
Gold (1929.90 +8.30) Silver (25.21 +0.31) Crude (111.20 -0.56)Overnight Summary — US futures slipping from highs
The global equity markets are mixed, however US futures are slightly lower. S&P Futures are down about 14 points to trade around the 4490 area. The market started off on a high note with buying peaking out at 4514.00. Since then, sellers captured control to see spoos just off the session low of 4487.25
In Asia, China gained 0.3% while Japan returned a robust 3.0%. The Shanghai spent the day in quiet fashion with the index never deviating far from the neutral zone. The modest gain on Wednesday finished just off the high. In Japan, the Nikkei saw export stocks fly higher with the recent weakness in the yen. Heavyweights paced the way with SoftBank surging 7% and Fast Retailing rising 5%.
In Europe, the major bourses are little changed. Inflation in the UK ran hotter than expected in February represented by the Core CPI figure rising 0.8% compared to the forecast of 0.5%. Commodity stocks are among the best performers of the day. Mining names such as Anglo American, Antofagasta and Glencore are up over 1%. Meanwhile, energy plays such as BP and Shell are up around 3%.
S&P 500 futures 0.1% below fair value; Nasdaq 100 futures 0.6% below fair value; DJIA futures in-line with fair value
Key factors driving the futures market:
Assumptions that the equity market is due for a period of consolidation after posting huge gains
Recognition that Fed officials are getting more vocal about likelihood of front-loading rate hikes to get inflation under control
Reports that EU is readying release of legislation (Digital Markets Act) designed to curtail power/competitive influence of big tech companies
No signs of credible progress in Russia-Ukraine peace talks; NSA Adviser Sullivan says war “will not end easily or rapidly”
Cleveland Fed President Mester (FOMC voter) says she thinks fed funds rate of 2.5% by year end looks appropriate and that more rate increases could follow next year
UK reports highest CPI inflation (+6.2% yr/yr) in 30 years
JPMorgan Chase’s CEO Jamie Dimon calls on Biden Administration to develop more domestic gas and energy, according to Axios
Adobe (ADBE) down 3.1% after topping fiscal Q1 expectations, but issuing disappointing guidance for fiscal Q2
General Mills (GIS) jumps 3.3% after beating fiscal Q3 expectations and issuing above-consensus FY22 EPS guidance
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