Market Wrap – Stocks and Oil Take a Breather Ahead of US Inflation Report

In today’s post market wrap live from the Meta trading room traders discussed US stock and futures markets along with oil and natural gas through charts and crowd behavior. Listen to how how the day unfolded, earnings and what the charts were telling us. Our traders discuss what to expect and watch for overnight through to the US CPI.

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Enjoy live commentary from Our Trading Room at YouTube as the day wraps up – feel free to like and share

It was a day of rebalancing for the markets after such extended moves from the depths of despair just a week ago. With the biggest runs coming from the Russell 2000 and Nasdaq Composite from Friday’s closing levels, these indices gave back the most today ahead of CPI data due Friday morning.  A good example was the ARK Innovation ETF (ARKK 97.73, -5.49, -5.3%), went from up 10% for the week to losing 5% today. 

After the close Fitch downgraded to “restricted default” status even though Evergrande and Kaisa have not officially announced defaults

The Dow industrial average is on track for its largest weekly gain since March with the S&P on pace for its largest gain since February. Tomorrow will tell the story.

Market Closes

  • WTI crude oil futures settled $72.05, up $2.56 or 3.68% up from yesterday’s $69.49. The high $73.01, low $69.65.
  • Dow industrial average fell -0.06 points or 0.0% at 35754.68, 2.0% from its all-time highs
  • S&P index fell -33.78 points or -0.72% at 4667.44, 1.16% from its all-time highs
  • NASDAQ index fell -269.61 points or -1.71% at 15517.38, closes 4.00% from its all-time highs
  • Russell 2000 index -51.5 points or -2.27% at 2220.20, still over 8% from its all-time highs.

Nine of the 11 S&P 500 sectors closed lower incl:

  • consumer discretionary (-1.7%),
  • information technology (-1.1%),
  • real estate (-1.4%) . T
  • health care (+0.3%)
  • consumer staples (+0.1%)

Markets YTD

  • S&P 500 +24.3% YTD
  • Nasdaq Composite +20.4% YTD
  • Dow Jones Industrial Average +16.8% YTD
  • Russell 2000 +12.4% YTD

News Highlights

China Consumer Inflation Hits 15 month High With a Jump in Food Prices

Inflation in China rose to 2.3% in November 2021, the highest figure since August 2020 from 1.5% a month earlier. Market consensus was 2.5%. Food prices and a further rise in cost of non-food items both rose. The cost of food increased for the first time in six months. Read Here:

Into The Vortex – EIA Reports Natural Gas Draw of -59 Bcf

Natural gas futures continues to be soft after it’s dramatic fall Panic highs with withdrawal into it’s first weeks. Last week EIA reported a draw of -59 Bcf of working gas in storage. U.S. LNG exports of LNG continue to grow with weather pressures continuing globally Read Here:

Poor U.S. 30-year Treasury Long Bond Auction With Large 3.2 basis points Tail

The US Treasury 30-Year Bond Sale performed worse than expected, garnering a D- rating across the Fixed Interest desk. The tail was 3.2 basis points with WI level at time of the auction 1.863% and the high yield of 1.895% at the auction. The last auction came in at a high yield of 1.94% with a huge tail of 5.2 basis pointsFollows a C- 10 year auction yesterday. Read Here:

Tomorrow Data Watch

  • 08:30   Core CPI (Nov)                  
  • 08:30   CPI (MoM) (Nov)             
  • 08:30    Real Earnings (MoM) (Nov)         
  • 10:00    Michigan 5-Year Inflation Expectations (Dec)        
  • 10:00    Michigan Consumer Expectations (Dec)                   
  • 10:00    Michigan Consumer Sentiment (Dec)        
  • 10:00    Michigan Current Conditions (Dec)            
  • 10:00    Michigan Inflation Expectations (Dec) 
  • 11:00    Cleveland CPI (MoM) (Nov)
  • 13:00    U.S. Baker Hughes Oil Rig Count
  • 13:00    U.S. Baker Hughes Total Rig Count
  • 14:00 Federal Budget Balance (Nov)

Friday Earnings Include

  • Centene Investor meeting

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!