U.S. Equity Markets rose on the first day of a busy earnings week, led by the NASDAQ which ended yesterday’s session with a gain of 0.87% while the Dow closed lower by 0.18%. Markets bounced higher on a quiet day ahead of this week’s busy earnings calendar. Infrastructure was in the news after Senators Joe Manchin and Shelley Moore Capito signalled negotiations over President Joe Biden’s infrastructure plan were making headway, but the $2.3 trillion price tag was too high. This was coupled with comments from Senator Lindsay Graham, who said that Republicans would support up to $900 billion in spending. The big catalysts for the week remain in the days ahead – Big Tech earnings and the Federal Reserve’s policy meeting. This is what investors are watching for a market move in the near term. European Markets again closed lower despite positive news. European Commission President Ursula von der Leyen said the region would accept all travellers who have been inoculated with European Medicines Agency-approved coronavirus vaccines. German Finance Minister Olaf Scholz said the government should be able to lay out plans for a widespread economic reopening by the end of May. Germany’s opposition Green Party overtook Chancellor Angela Merkel’s Christian Democratic Union in an opinion poll ahead of September’s elections. This could spark concerns of political uncertainty in the country. Italian Prime Minister Mario Draghi was said to be ready to present his new $266 billion stimulus plan, which he said would boost the country’s gross domestic product by 3.6%. Meanwhile in Asia, Japan’s ruling Liberal Democratic Party lost three regional elections for Parliament seats ahead of a general election in six months. In a meeting with executives last week, Chinese Vice Minister of Foreign Affairs Xie Feng said Beijing hoped major U.S. companies would press the White House to end trade tariffs. Taiwan’s Industrial Production data for March were stronger than expected, rising versus February, as demand for electronic parts and computers continued to accelerate. Elsewhere, Bitcoin surged 6.26% on reports that JPMorgan Chase was set to launch an active bitcoin fund for clients, while Oil declined 0.35% after OPEC expressed concerns over rising COVID-19 cases in India.
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The S&P 500 closed 0.18% higher at a price of 4187.
The Dow Jones Industrial Average closed 62 points lower for a 0.18% loss at a price of 33,981.
The NASDAQ 100 closed 0.61% higher at a price of 14,026.
The Stoxx Europe 600 Index closed 0.4%lower.
Yesterday, the MSCI Asia Pacific Index fell 0.1%.
Yesterday, the Nikkei closed 0.36% higher at a price of 29,126.
The Bloomberg Dollar Spot Index closed 0.1% higher
The Euro closed 0.1% lower at $1.2080.
The British Pound closed 0.1% higher at $1.3892.
The Japanese Yen closed 0.3% lower at 108.11 per dollar.
Germany’s 10-year yield closed one basis points lower at -0.26%.
Britain’s 10-year yield closed two basis points higher at 0.76%.
US 10 Year Treasury closed two basis points higher at 1.57%.
West Texas Intermediate crude closed 0.35% lower at $61.68 a barrel.
Gold closed 0.16% higher at $1,779.10 an ounce.
This morning on the Economic Front we have no data of note from either the UK or the Euro-Zone. At 2.00 pm we have the U.S Housing Price Index. Finally, at 3.00 pm we have Consumer Confidence and the Richmond Fed Manufacturing Index.
June S&P 500
The S&P traded in a narrow range as the market goes on hold ahead of tomorrow’s FOMC Meeting at 7.00 pm, followed by the Powell press conference at 7.30 pm. It makes absolutely no sense that the Fed continues to pump $120 billion of money into the system every month especially when we have rising inflation. Where I am in Florida (and this is no exaggeration), House prices have doubled since last summer. In my opinion the Fed are trapped as they know when they stop printing that Stock markets will have an aggressive sell-off. Meanwhile, the consequences of their QE creates a bigger and bigger bubble across all asset classes. I am still short the S&P from last Friday at 4155. I will now raise my exit level to 4171 while leaving my 4185 ‘’Closing Stop’’ unchanged. If my exit level is executed I will again be a seller from 4198/4214 with a 4225 ‘’Closing Stop’’. The S&P has support from 4142/4157 and I will be a buyer on any dip to this area with a 4129 ‘’Closing Stop’’. If I am taken short a second time I will have a T/P level at 4187. If I am taken long I will have a T/P level at 4169.
I am still flat the Euro as the market just missed my 1.2120 sell level by three points before closing lower at 1.2080. I will now raise my sell level to 1.2145/1.2195 with a higher 1.2235 stop. Meanwhile, I will leave my 1.1980/1.2020 buy level unchanged with the same 1.1935 stop.
June Dollar Index
No Change. I am still long at 90.80 with a now lower 91.00 T/P level. I will add to this trade at 90.30 while leaving my 89.95 stop unchanged.
The DAX continues to trade heavy albeit near all-time highs and I am still flat. I will now raise my buy level to 15070/15130 with a higher 14995 stop.
I am still flat and today, I will raise my buy level to 6830/6880 with a higher 6785 stop. If I am taken long I will have a T/P level at 6915.
Dow Rolling Contract
The Dow missed my initial 34170 sell level by just 25 points before falling 150 points off its afternoon high into the close and I am still flat. I will now raise my buy level to 33700/33850 with a higher 33595 ‘’Closing Stop’’. Ahead of tomorrow’s FOMC Meeting I do not want to be short the Dow at this time.
Thankfully, the NASDAQ traded lower to my 13870 T/P level on my 13890 short position from Friday and I am still flat. The NASDAQ rallied into the close. We have resistance above here from 14070/14150 where I will again be a seller with a 14225 ‘’Closing Stop’’. The NASDAQ has strong support from 13810/13900 where I will be an aggressive buyer with a 13740 ‘’Closing Stop’’.
No Change. I am still a small buyer from 169.90/170.30 with the same 169.65 stop.
Gold Rolling Contract
I am still flat and today, I will continue to be a buyer from 1736/1751 with the same 1727 tight stop.
Silver Rolling Contract
I am still flat and I will now raise my buy level to 25.20/25.80 with a higher 24.85 stop.