Wake Up Call – The Day Ahead Jan 19, 2021

Some life in the markets after Earnings beats from Procter & Gamble (PG) UnitedHealth (UNH) Bank of America (BAC) Morgan Stanley (MS) Fastenal (FAST). Oil again supported by geopolitical threatss. The markets wait for a 20 year bond market and more earnings. 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.

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: +25.0
  • WTI crude futures are up to up $0.62 or 0.75% at $86.02 (new seven year high)
  • Natural gas up .036 at 4.295
  • Apple Pre-market 170.67 +0.87 (+0.51%) after $3 trillion at $182.86
  • U.S. Treasuries 2-yr yield up two basis points to 1.05%, 10-yr yield is up one basis point to 1.88% after touching 1.90% overnight.
  • 2-yr: +1 bp to 1.04%
  • 3-yr: +1 bp to 1.36%
  • 5-yr: UNCH at 1.65%
  • 10-yr: UNCH at 1.87%
  • 30-yr: UNCH at 2.18%
  • The U.S. Dollar Index is down 0.1% to 95.60
  • 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.
  • AUD is the strongest and the USD is the weakest
  • Spot gold is trading of $4.62 or 0.25% at $1817.93
  • Spot silver is up $0.26 or 1.11% at $23.72
  • Bitcoin is trading lower $42,202, Over December low at $41,967.50
  • Japan’s Nikkei: -2.8%
  • Hong Kong’s Hang Seng: +0.1%
  • China’s Shanghai Composite: -0.3%
  • India’s Sensex: -1.1%
  • South Korea’s Kospi: -0.8%
  • Australia’s ASX All Ordinaries: -1.0%.
  • STOXX Europe 600: +0.4%
  • Germany’s DAX: +0.4%
  • U.K.’s FTSE 100: +0.3%
  • France’s CAC 40: +0.6%
  • Italy’s FTSE MIB: -0.1%
  • Spain’s IBEX 35: +0.7%.

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

Data out Today:

Housing Starts (Briefing.com consensus 1.650 million) and Building Permits (Briefing.com consensus 1.702 million) for December at 8:30 a.m. ET.

Earlier weekly MBA Mortgage Applications Index increased 2.3% following a 1.4% increase in the prior week. 

Overnight Stories in Depth

  • Procter & Gamble (PG 158.26, +1.53): +1.0% after beating top and bottom-line estimates and raising its FY22 revenue guidance. 
  • UnitedHealth (UNH 463.00, +2.01): +0.4% after beating top and bottom-line estimates and reaffirming its FY22 guidance. 
  • Bank of America (BAC 47.75, +1.49): +3.2% after beating EPS estimates. 
  • Morgan Stanley (MS 97.01, +3.00): +3.2% after beating EPS estimates. 
  • Fastenal (FAST 59.60, +1.21): +2.1% after beating top and bottom-line estimates. 
  • Australia’s prime minister is expected to call a federal election for the second half of May.
  • Eurozone’s November Current Account surplus EUR23.60 bln (last surplus of EUR18.10 bln).
  • November Construction Output -0.18% m/m (last 0.64%)
  • Germany’s December CPI 0.5% m/m, as expected (last -0.2%); 5.3% yr/yr, as expected (last 5.2%)
  • U.K.’s December CPI 0.5% m/m (expected 0.3%; last 0.7%); 5.4% yr/yr (expected 5.2%; last 5.1%). December Core CPI 0.5% m/m (expected 0.2%; last 0.5%); 4.2% yr/yr (expected 3.9%; last 4.0%). December Input PPI -0.2% m/m (expected 0.7%; last 1.5%) and Output PPI 0.3% m/m (expected 0.6%; last 1.0%). December RPI 1.1% m/m (expected 0.7%; last 0.7%); 7.5% yr/yr (expected 7.1%; last 7.1%)

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

Open: United Health (UNH), Bank of America (BAC), Proctor & Gamble (PG), US Bancorp (USB), ASML (ASML), State Street (STT), Citizens Financial Group (CFG), Fastenal (FAST), Prologis (PLD), Comerica (CMA)

Close: United Airlines (UAL), Kinder Morgan (KMI), Alcoa (AA), Discover Financial (DFS), HB Fuller (FUL), Wintrust Fin (WTFC)

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

Have a great trading day!

RISK DISCLOSURE STATEMENT FOR SECURITIES, STOCKS, FOREX, CRYPTO FUTURES OR ANY OTHER FINANCIAL INSTRUMENT

This information is provided for educational purposes only and is not a direction to buy or sell the instruments discussed. It is imperative before trading you assess your individual risk, the market risk, taxation risk, your counterparties risk and your suitability to engage in any investment of trading financially, mentally or ethically or legally. This warning does not cover all possible risks and is for educational purposes only.

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
types of securities and options on security futures contracts may be authorized in the future.

It is advised and suggested before trading you read the risk disclosure documents of what and where you intend to trade. We have included the short form from the NFA, this is not to be taken as a be all and end all please continue with your own investigation of the markets or instruments you trade with.

Before trading go to: RISK DISCLOSURE STATEMENT FOR SECURITY FUTURES CONTRACTS