Wake Up Call – The Day Ahead Jan 6, 2021

Oil and stock markets diverged after the FOMC minutes. Oil higher overnight as geopolitical threats such as Kazakhstan impact 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: +16.0
  • WTI futures up $2.32 at $80.13. Over $79.51 highest level since November 18
  • Natural gas up -.001 at 3.843 ahead of EIA
  • Apple testing $174 after $3 trillion at $182.86
  • U.S. Treasuries yields higher 10-yr yield is up another three basis points to 1.74% (+23 bps this week) while the 2-yr yield is up two basis points to 0.85%. 
  • November trade balance report showed a deficit of $80.2 billion (consensus -$69.4 billion). The October deficit was revised to $67.2 billion from $67.1 billion.
  • Weekly initial jobless claims count totaled 207,000 (consensus 198,000). This was above the prior week’s revised count of 200,000 (from 198,000). As for continuing claims, they increased to 1.754 mln from a revised count of 1.718 mln (from 1.716 mln).
  • 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 down 0.1% to 96.13.
  • JPY is the strongest and the AUD is the weakest
  • Spot gold is down $18 or -1% at $1791.03
  • Spot silver is down $0.69 or -23% at $22.11
  • Bitcoin is trading down $42,962, December low at $41,967.50
  • Japan’s Nikkei: -2.9% Hong Kong’s Hang Seng: +0.7% China’s Shanghai Composite: -0.3% India’s Sensex: -1.0% South Korea’s Kospi: -1.1% Australia’s ASX All Ordinaries: -2.8%.
  • STOXX Europe 600: -1.1% Germany’s DAX: -1.3% U.K.’s FTSE 100: -0.7% France’s CAC 40: -1.3% Italy’s FTSE MIB: -1.2% Spain’s IBEX 35: -0.4%.

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

Data out Today:

ISM Non-Manufacturing Index for December, the weekly Initial and Continuing Claims report, the Trade Balance for November, Factory Orders for November and EIA Natural gas inventories on Thursday.

Overnight Stories in Depth

  • China’s December Caixin Services PMI 53.1 (last 52.1)
  • Japan’s December Services PMI 52.1 (expected 51.1; last 53.0)
  • Australia’s December Services PMI 55.1, as expected (last 55.7)
  • Eurozone’s November PPI 1.8% m/m (expected 1.2%; last 5.4%); 23.7% yr/yr (expected 22.9%; last 21.9%)
  • Germany’s November Factory Orders 3.7% m/m (expected 2.1%; last -5.8%) and December IHS Markit Construction PMI 48.2 (last 47.9)
  • U.K.’s December Services PMI 53.6 (expected 53.2; last 58.5)

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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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
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