Wake Up Call – The Day Ahead Jan 12, 2021

The bounce continues in stock markets as US bonds weaken further. Oil again supported by geopolitical threats such as Kazakhstan. The markets wait for CPI after yesterday’s Fed Chair Powell inquisition. A live recap of what happened while we slept overnight and what lies ahead. We go through charts on the S&P 500, Nasdaq, Russell, Oil and Natural gas. Markets again have eyes on Rates, Open Interest Gamma levels on the S&P 500 and mega stocks like Apple and Tesla.

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

The markets:

  • S&P Futures vs Fair Value: +6.0
  • WTI crude futures are up to $0.74 or 0.47% at $81.96
  • Natural gas up .22 at 4.443
  • Apple Pre-market 172.35 +0.16 (0.090%) after $3 trillion at $182.86
  • U.S. Treasuries flat in front of the CPI report. The 2-yr yield is unchanged at 0.90%, and the 10-yr yield is unchanged at 1.75%. 
  • 2-yr: +2 bps to 0.92%
  • 3-yr: +1 bp to 1.21%
  • 5-yr: -1 bp to 1.53%
  • 10-yr: -2 bps to 1.76%
  • 30-yr: -3 bps to 2.08%
  • The U.S. Dollar Index is unchanged at 95.61.
  • 1 million Omicron cases in the US but the hope is that it will not strain hospitals and will lead to a faster herd immunity.
  • CAD is the strongest and the NZD is the weakest
  • Spot gold down $2.30 -0.13% at $1818.90
  • Spot silver is unchanged at $22.77
  • Bitcoin is trading higher $43,212, Over December low at $41,967.50
  • Japan’s Nikkei: +1.9%
  • Hong Kong’s Hang Seng: +2.8%
  • China’s Shanghai Composite: +0.8%
  • India’s Sensex: +0.9%
  • South Korea’s Kospi: +1.5%
  • Australia’s ASX All Ordinaries: +0.7%.
  • STOXX Europe 600: +0.4%
  • Germany’s DAX: +0.2% U.K.’s
  • FTSE 100: +0.5%
  • France’s CAC 40: +0.4%
  • Italy’s FTSE MIB: +0.1%
  • Spain’s IBEX 35: +0.1%.

Visit Traders Market Weekly: Traders Market Weekly: Hello There 2022 – TRADERS COMMUNITY for the daily calendar

Data out Today:

Total CPI is projected to have increased 0.4% month-over-month in December which would leave it up 7.0% year-over-year. While CPI is not the Fed’s preferred measure of inflation, a hot reading would still support the central bank’s intentions to be more assertive in policy normalization. 

In other data, the Fed’s Beige Book for January and the Treasury Budget for December will both be released at 2:00 p.m. ET. Earlier, the weekly MBA Mortgage Applications Index increased 1.4% following a 5.6% decline in the prior week. 

Overnight Stories in Depth

  • Biogen (BIIB 219.80, -21.72): -9.0% after Medicare officials proposed to only cover the company’s Alzheimer’s drug for patients in clinical trials.
  • PayPal (PYPL 187.65, -3.87): -2.0% after the stock was downgraded to Hold from Buy at Jefferies.
  • DoorDash (DASH 147.00, +3.35): +2.3% after the stock was upgraded to Outperform from In-line at Evercore ISI. On a related note, DASH CEO Tony Xu has joined the Meta (FB 334.15, -0.22, -0.1%) Board of Directors.
  • Quest Diagnostics (DGX 154.84, -3.04): -1.9% despite guiding Q4 EPS and revenue above consensus, as well as guiding FY22 EPS above the prior guidance range.
  • Japan’s December Economy Watchers Current Index 56.4 (expected 56.5; last 56.3). January Reuters Tankan Index 17 (last 22). Adjusted November Current Account surplus JPY1.37 trln (expected CNY1.05 trln; last CNY1.03 trln)
  • South Korea’s December Unemployment Rate 3.8% (last 3.1%)
  • Eurozone’s November Industrial Production 2.3% m/m (expected 0.5%; last -1.3%); -1.5% yr/yr (expected 0.6%; last 0.2%)
  • Germany’s December WPI 0.2% m/m (expected 1.2%; last 1.3%); 16.1% yr/yr (last 16.6%)

2021 sector performances

Energy (+47.4%) and real estate (+42.3%) up more than 40.0%, followed by the information technology sector (+34.0%) with a 34% gain. The utilities (+13.6%) and consumer staples (+14.7%) sectors are up less than 15.0% this year. 

Within the technology sector, Apple (AAPL 172.12, -0.08, unch) is up 34.3% this year, Microsoft (MSFT 338.85, -0.47, -0.1%) is up 52.6%, and NVIDIA (NVDA 297.00, +1.14, +0.4%) is up a whopping 126.6%. 

  • China’s December Manufacturing PMI 50.3 (expected 50.0; last 50.1) and December Non-Manufacturing PMI 52.7 (expected 52.0; last 52.3)
  • South Korea’s December CPI 0.2% m/m (expected 0.1%; last 0.4%); 3.7% yr/yr (expected 3.6%; last 3.7%)

New York Fed Index Shows Global Supply Chain Pressures May Have Peaked – TRADERS COMMUNITY

The New York Federal Reserve released a new Index, The Global Supply Chain Pressure Index (GSCPI). The NY Fed concluded that global supply chain pressures may have peaked and might start to moderate somewhat going forward. The index uses 27 variables that are meant to capture factors that put pressure on the global supply chain, both domestically and internationally.

Around The Barrel – Crude Oil and Gasoline Outlook for 2022 – TRADERS COMMUNITY

Welcome to 2022, WTI Oil futures have rallied after OPEC+ holds the status quo. Last week EIA reported US Crude last Week crude drew -3576Kbbl (incl +1055kbbl build at Cushing). Gasoline stocks drew -1458kbbl. Utilization fell -.2% to 89.6%. Production +200k to 11,800 kbpd.

Into The Vortex – Natural Gas Outlook – TRADERS COMMUNITY

Into New Year and U.S. domestic natural gas demand for heating has weakened   Atmospheric G2 models said that warmer-than-normal temperatures in the eastern U.S. should continue to curb heating demand.  Last week EIA reported a draw of -136 Bcf of working gas in storage lower than expected. With the global energy crisis LNG exports continue to grow but we balance supply shortages with deliverability.

Earnings Calendar for Today

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

Have a great trading day!

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THE NFA in their disclosure statement discusses the characteristics and risks of standardized security futures contracts traded on regulated U.S. exchanges. At present, regulated exchanges are authorized to list futures contracts on individual equity securities registered under the Securities Exchange Act of 1934 (including common stock and certain exchange-traded funds and American Depositary Receipts), as well as narrow-based security indices. Futures on other
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