Wake Up Call – The Day Ahead Jan 4, 2021

Welcome to 2022. Oil and stock markets gapped up overnight ahead of OPEC+ and solid moves overseas. 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. Welcome back the UK, Happy New Year!

  • 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: +16.0
  • WTI futures up $0.71, to $76.79/bbl. ahead of OPEC+
  • Natural gas up -.047 at 3.864
  • Apple testing $3 trillion at $182.86
  • The obsession remains the price of Apple for 3 trillion market is $182.86
  • U.S. Treasuries yields higher across the curve. Up 3.3 basis points in the 10 year. The 2-yr yield unchanged at 0.79% e. The 10-yr yield could be on the verge of a breakout after being range-bound since the first quarter of last year. 
  • US ISM data will be released a day later than usual at 10 AM ET.
  • JOLTs job data ahead of NFP
  • AT&T (T 25.58, +0.15): +0.6% even after agreeing with Verizon (VZ 52.61, +0.17, +0.3%) to delay their 5G rollout for two weeks over airline concerns. The decision reverses course after initially denying a government request. 
  • Ford Motor (F 22.18, +0.41): +1.9% after announcing plans to nearly double production capacity of the all-electric F-150 Lightning pickup to 150,000 vehicles/year at the Rouge Electric Vehicle Center to meet soaring demand. 
  • OPEC+ meeting where they are expected to continue its plan to increase production quota by 400K BPD (with the caveat that some countries may not be able to meet quotas on the production side)..
  • 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.
  • The U.S. Dollar Index is little changed at 95.93.
  • GBP is the strongest and the JPY is the weakest
  • Spot gold is trading down $0.80 or -0.4% at $1800.30
  • Spot silver is down $0.18 -0.79% at $22.69
  • Bitcoin is trading sideways $46,831
  • Japan’s Nikkei: +1.8%
  • Hong Kong’s Hang Seng: +0.1%
  • China’s Shanghai Composite: -0.2%
  • India’s Sensex: +1.1%
  • South Korea’s Kospi: UNCH
  • Australia’s ASX All Ordinaries: +1.9%.
  • German DAX is up 0.75%
  • France’s CAC is up 1.3%
  • UK’s FTSE 100 is up 1.4%
  • Spain’s Ibex is up 0.5%
  • Italy’s FTSE MIB is up 0.8%

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

  • Data out Today:
    • 9:45 ET: December IHS Markit Manufacturing PMI (prior 57.8)
    • 10:00 ET: November Construction Spending (consensus 0.6%; prior 0.2%)

Overnight Stories in Depth

  • Japan’s Manufacturing PMI expanded for the 11th consecutive month in December while Australia’s Manufacturing PMI expanded for the 19th month in a row.
  • Germany’s December unemployment -23,000 (expected -15,000; last -34,000) and December Unemployment Rate 5.2% (expected 5.3%; last 5.3%).
  • November Retail Sales 0.6% m/m (expected -0.5%; last 0.5%); -2.9% yr/yr (expected -4.9%; last -2.0%)
  • U.K.’s December Manufacturing PMI 57.9 (expected 57.6; last 58.1). November Mortgage Lending GBP3.69 bln (expected GBP3.55 bln; last GBP1.15 bln)
  • France’s December CPI 0.2% m/m (last 0.4%); 2.8% yr/yr, as expected (last 2.8%)
  • Spain’s December unemployment -76,800 (last -74,400)
  • Swiss December CPI -0.1% m/m, as expected (last 0.3%); 1.5% yr/yr (expected 1.6%; last 1.5%)
  • Germany loosened its travel restrictions for the U.K. and South Africa.
  • Italy’s parliament will begin the process of electing a new president on January 24.

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%)

China Aims to Guide More Long-Term Foreign Investors into its Treasury Bonds – TRADERS COMMUNITY

The breakdown of the Chinese property market exemplified by the Evergrande crisis coupled with the unknowns of the shadow banking debt rocked China in 2021. China has been responding to these vulnerabilities. A Ministry of Finance official on Wednesday pointed to changes in the Chinese treasury bond market.

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

WTI Oil futures have rallied back from the recent dump. Last week EIA reporting US Crude stocks in SPR fell to lowest since Nov 2002. Last Week crude drew -4715Kbbl (incl +1463kbbl build at Cushing). Gasoline stocks grew +5533kbbl. Utilization fell -.2% to 89.6%. Production 100k to 11,600 kbpd.

Into The Vortex – Natural Gas Storage Outlook – TRADERS COMMUNITY

Heading into Christmas and cold temperatures around us gas withdrawal season is in swing. While in Europe natural gas futures are back to near all-time highs again US natural gas futures are softer reacting to domestic weather models. Last week EIA reported a draw of -55 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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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.

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