Market Wrap – Dirty Markets Give Most of Yesterday’s Explosive Gains Back

In today’s post market wrap live from the Meta trading room traders discussed US stock and futures markets after the big reversal from yesterday’s explosive rallies across the board. Listen to our technical and market Psychology read on the day. We cover the Central Bank decisions from the ECB, BoE, SNB and Norges with the Mexican and Turkish Central Banks taking opposite actions. Ahead is BoJ and Quad Witching into the US. Natural gas moved sharply lower again after the EIA report.

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Market Closes

  • WTI crude futures +$1.47, +2.1% to $72.36/bbl
  • U.S. Dollar was weaker across the board with the Yen the strongest. The USD Index fell 0.6% to 95.98.
  • Dow industrial average rose 283.23 points or 1.08% at 35927.44
  • S&P index fell -41.18 points or -0.87% 4668.66
  • NASDAQ index fell -385.16 points or -2.47% at 15180.42
  • Russell 2000 fell 29.8 points or -0.08% at 35897.65
  • Apple $171.62 -$7.62 -4.26%

S&P 500 sector watch:

  • Eight of the 11 S&P 500 sectors, including financials (+1.2%), materials (+1.0%), and energy (+0.7%), closed higher.
  • The Russell 1000 Value Index gained 0.5%. 

Markets YTD

  • S&P 500 +25.4% YTD
  • Nasdaq Composite +20.8% YTD
  • Dow Jones Industrial Average +17.4% YTD
  • Russell 2000 +11.2% YTD

Bonds

In the Treasury market, curve-steepening activity in the Treasury market, driven by a steeper decline in shorter-dated yields versus longer-dated yields. The fed-funds-sensitive 2-yr yield decreased six basis points to 0.61%, and the 10-yr yield decreased four basis points to 1.42%.

News Highlights

Into The Vortex – EIA Reports -88Bcf Draw in Natural Gas Storage – TRADERS COMMUNITY

With Winter approaching and gas withdrawal season in swing natural gas futures are reacting to domestic weather models. Last week EIA reported a draw of -88Bcf of working gas in storage as expected. With the global energy crisis LNG exports continue to grow but we balance supply shortages with deliverability.

Banco de México Raises Rates Again As Inflation Risk Deteriorates More – TRADERS COMMUNITY

The Mexican Central Bank, Banco de México raised interest rates by 50 basis points to 5.50% with the bank saying Balance of Risks for Inflation Have Deteriorated. Last month the Banco Central do Brasil​ hiked its benchmark interest rate by 1.5% to 9.25%.

ECB Leaves Rates Unchanged, PEPP to End in March But APP Expanded – TRADERS COMMUNITY

ECB left rates unchanged as expected in December. The bank left deposit facility interest rates at -.50% and held steady rates on the main refinancing operations and on the marginal lending facility unchanged. ECB governing council expects net purchases to end shortly before it starts raising rates

Swiss National Bank Leaves Rates Unchanged at -0.75% as expected, Raises Inflation Forecast – TRADERS COMMUNITY

The Swiss National Bank kept negative interest rates unchanged at -0.75% for sight deposits in December. The SNB made no key changes in their language as they continue to keep negative rates and reiterated that the Swiss franc remains “highly valued”.

Central Bank Deluge Continues

Thurs

21:30     BoJ Monetary Policy Statement 

21:30     BoJ Press Conference 

Fri

13:00 Fed Governor Waller and SF Fed President Daly

Tomorrow US Data Watch

  • Quad Witching

13:00     U.S. Baker Hughes Oil and Gas Rig Count               

15:30     CFTC speculative net positions

Friday Earnings Include

  • Darden Restaurants

Trust you all had a great day, sleep well and get your trading plan sorted.

Any questions please feel free to ask them below. Trade Smart!