Traders Market Weekly: Eyes Up on Retail and Inflation

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    Brokerage research calls of note:
    Downgrades: CVNA, GLW, LDI, PTON, RKT, U, UPST
    WTI crude futures +4.1% to $103.89/bbl; wheat futures +1.4% to $11.08/bu; nat gas futures +2.3% to $7.64/mmbtu
    10-yr note yield -5 bps to 2.94%; 2-yr note yield -3 bps to 2.60%


    Equity Markets—

    Japan’s Nikkei: +0.2%
    Hong Kong’s Hang Seng: +1.0%
    China’s Shanghai Composite: +0.8%
    India’s Sensex: -0.5%
    South Korea’s Kospi: -0.2%
    Australia’s ASX All Ordinaries: +0.3%


    China’s April CPI 0.4% m/m (expected 0.2%; last 0.6%); 2.1% yr/yr (expected 1.8%; last 1.5%). April PPI 8.0% yr/yr (expected 7.7%; last 8.3%)
    Japan’s March Leading Index 0.9% m/m (last -1.2%) and Coincident Indicator 0.2% m/m (last 0.5%)
    South Korea’s April Unemployment Rate 2.7% (last 2.7%)
    Australia’s May Westpac Consumer Sentiment -5.6% (last -0.9%)


    Toyota forecast a 20% drop in profit for the year.
    Consumer confidence in Australia fell to the lowest level since August 2020. China’s CPI increased at its fastest yr/yr pace since November.
    Press reports indicate that Softbank is down about $25 bln on its investments for the year.
    South Korea is on track to pass an extra budget without bond issuance. President Yoon acknowledged that prices are a concern and that ways to contain inflation need to be considered.


    Major European indices have pared gains following the negative reaction in U.S. markets to the hot CPI data.
    Germany’s CPI increased at its fastest yr/yr pace since 1974 in the April reading.
    A few European Central Bank policymakers spoke in favor of raising rates while President Lagarde repeated her expectations for ending asset purchases in early Q3.
    The U.K.’s National Institute of Economic and Social Research noted that the Bank of England’s base rate will need to be at 2.5% until the middle of the decade to curtail inflation.

    -Equity Markets—

    STOXX Europe 600: +0.7%
    Germany’s DAX: +0.3%
    U.K.’s FTSE 100: +0.3%
    France’s CAC 40: +0.3%
    Italy’s FTSE MIB: +0.8%
    Spain’s IBEX 35: +0.3%


    Germany’s April CPI 0.8% m/m, as expected (last 2.5%); 7.4% yr/yr, as expected (last 7.3%)


    Total CPI for April is hotter than expected

    S&P futures vs fair value: flat. Nasdaq futures vs fair value: -45.00.
    The S&P 500 futures trade in-line with fair value.

    Just in, total CPI rose 0.3% m/m in April (consensus 0.2%), while core CPI, which excludes food and energy, rose 0.6% (consensus 0.4%). On a year-over-year basis, total CPI was up 8.3% (versus 8.5% in March) and core CPI was up 6.2% (versus 6.5% March).

    U.S. Inflation Higher Than Expected in April CPI +8.3% y/y vs 8.1% y/y


    +1s to excellent posts above … INFLATION is still a factor & a bit more than expected
    As 8% is still too high on annual basis – even though some stability occurred in high rates
    DOW is up some at +200 — but there is no immediate cure other than FED rate increases
    I believe “Putin” will also cause at least some form of RECESSION as many have to hold back spending


    PPPPPLLLUUUUNNNGGGEEEEE — losses for Wall, “K”, and main street
    BITCOIN & other “Kryptos” have quickly lost value
    from $69,000 high to yesterday dipping below $30,000
    equities continue to be down in 1-2% range
    and where is the “bottom” & turning point to better times ahead
    as humanity can rebound if they strive to unite rather than divide

    Hopefully good old USA can stabilize & return to better times ahead 🙂


    Nasdaq corrects 50% of the move up from the post pandemic low

    NASDAQ index is now down 29.5% from its high

    The Nasdaq index is trading down 309 points or -2.63% at 11428.00.

    That takes index price below its 50% midpoint of the move up from the post pandemic low in March 2020. That midpoint level comes in at 11449.28.


    US April federal budget balance +308B vs +226B expected
    Prior was -193B

    April 2021 surplus was 226B
    Fiscal 2022 ytd deficit of $360 vs $1932T in 2021

    Outlays $555B vs $665B in April 2021
    Receipts $864B vs $439B a year ago
    Receipts were a record.


    Bitcoin testing swing area and 61.8% retracement
    Swing area between $28,600 and $30,044

    The price of bitcoin has moved to a low of $29011.10 today and in the process has moved down into a swing area between $28600 and $30044. The current price is at $29814.

    Also, in that swing area is the 61.8% retracement of the move up from the March 13, 2020 low at $28,737.10.

    The high price (and all time high price) reached up to $69000 on November 9, 2021. The price decline from that high to the low today has taken the price down 57.95%. So although the price is still quite a ways from the March 2020 low at $3850, it is also nearly $40000 from the all time high.

    Anyone who bought and HODLed bitcoin from June 22, 2021 are losing money. Move below that level, and anyone going back to early January 2021 would be losing money. That is 492 days ago.


    Dow 31,834.11 -326.63 -1.02%
    S&P 500 3,935.18 -65.87 -1.65%
    Nasdaq 11,364.24 -373.44 -3.18%
    GlobalDow 3,701.99 -2.46 -0.07%
    Gold 1,852.20 11.20 0.61%
    Oil 105.59 5.83 5.84%


    Market Updates

    S&P Futures vs Fair Value: -25.0
    10 yr Note: 2.834%
    USD/JPY: 128.56 -1.42
    EUR/USD: 1.0435 -0.0080
    Europe: FTSE: -2.2% DAX: -2.1% CAC: -2.2%
    Asia: Hang Seng: -2.2% Shanghai: -0.1% Nikkei: -1.8%
    Gold (1847.30 -6.40) Silver (21.23 -0.35) Crude (103.29 -2.42)


    In Asia, China slipped 0.1% while Japan shed nearly 2%. The Shanghai was stagnant throughout the session culminating with a narrow loss. Reports of extended lockdowns seemed to keep a cap on equities. In Japan, the Nikkei was led lower by SoftBank. The market heavyweight shed 8% after reporting its fiscal year results. Automakers stood out on the upside with names such as Subaru and Mazda gaining 5-6%.

    In Europe, the major bourses tracked Wall Street lower. The UK’s preliminary Q1 GDP underwhelmed, rising 0.8% but shy of the consensus of 1.0%. Corporate earnings did little to boost sentiment. Global conglomerate, Siemens, fell 6% after reporting its second quarter results. Additionally, Commerzbank dropped 3% and Merck KGaA lost 4% after first quarter results failed to entice investors.
    Market Updates

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