Bill Baruch, president and founder of Blue Line Futures, previews E-mini S&P, Gold, Crude, Forex and Treasury markets and today’s economic report calendar. Follow his reports Monday-Friday on MoneyShow.com and short Midday Markets video.
Bill Baruch’s Midday Market Minute short video for Nov. 1 here.
Oil gets slammed while stocks rally.
E-mini S&P (December)
Wednesday’s close: Settled at 2711, up 25.75.
Fundamentals: U.S. benchmarks are higher this morning as they claw back late session profit-taking ahead of the bell. Those from Europe are up about 0.5% but Asia is lagging despite China stimulus talk being a major catalyst in this enthusiasm. Today, China’s Politburo, the policy making committee, said that “preemptive and prompt” action is needed to solidify the economy. Analysts expect a wave of tax cuts and fiscal stimulus that boosts infrastructure spending. China’s Manufacturing PMI missed expectations on Tuesday night and though last night’s private Caixin survey beat expectations, it simply avoided a contraction at 50.1 versus 49.9 expected (below 50 is a contraction).
Manufacturing data from around the world is being closely watched this week on concerns it’s a casualty to the international trade conflict. That from the UK missed this morning, we look to U.S. PMI data and the more closely watched ISM Manufacturing read. Eurozone reads are tomorrow morning but, on the day, it will be drowned out by U.S. Nonfarm Payroll.
However, the British pound (GPB) is more than a penny higher after the Bank of England policy meeting and less negative Brexit news, bringing a tailwind to the euro (EUR). This coupled with a stronger fix for the Chinese yuan (CNY) has the U.S. dollar (USD) on its heels, equating in the larger risk appetite in equities.
Still, we must point out that commodities are not buying the narrative; Crude, Palladium and Soybeans are all lower this morning and Copper is up a very unenthusiastic penny given it was down more than 10 cents on the week.
Weekly Jobless Claims and Nonfarm Productivity are due at 7:30 am CT.
Another deluge of earnings is expected today but Apple (AAPL) after the bell will be the only true focus. Investors look to the largest company in the world to confirm a strong consumer in the third quarter and to gather a pulse on the direction of not only the domestic but global economy with an emphasis on China through the end of the year. Apple will either soothe the recent volatility or be the catalyst for more.
Technicals: Wednesday, the S&P (SPX) traded to a high of 2737.25 before settling at 2711. This was significant for two critical technical reasons. First, price action failed at ...
Crude Oil (December)
Wednesday’s close: Settled at 65.32, down 0.87.
Fundamentals: Wednesday’s EIA inventory report was not bearish as the composite (Crude with its products) was a draw of 3.998 mb. However, the production lost a few weeks ago in the wake of the hurricane came back steadily with an estimated increase of 300,000 in the lower 48 states last week. Production was certainly the major catalyst Wednesday in the drive lower; the EIA also released its monthly numbers for August which showed an increase of 416,000 bpd bringing production to a record of 11.346 mbpd. This coupled with promised increases from Russia and Saudi Arabia are weighing on the market. In September Russia produced 11.36 mbpd and they are expected to steadily increase to 11.4 to 11.8 mbpd through the end of the year.
Adding further weight on the sentiment is Iran still exporting Crude with sanctions being reimposed on Sunday. Furthermore, the U.S. agreed with India to allow a waiver on Iranian crude where they will reduce imports of such by one third; the waiver will last until March.
Technicals: Ultimately, there are a lot of crucial support levels in this region that Crude Oil has bounced from this year or outright technical indicators that we use on a regular basis that voice support. Additionally, we must also look to Brent Crude Oil which traded to ...
Gold (December)
Wednesday’s close: Settled at 1215, down 10.3.
Fundamentals: Gold is ripping this morning, up more than 1% and being driven by a weaker dollar. Interesting enough, the dollar is not truly weaker on its own accord but instead for the same reason it has been higher; weakness in its pairs has turned into strength this morning. Most importantly the Chinese yuan was fixed better, gaining more than 0.50% against the dollar this morning. This could lead to a move. The British pound is up more than a penny after the Bank of England’s policy meeting and less negative news on the Brexit front. The euro is using this as a tailwind after CPI data was strong than expected Wednesday. U.S. weekly Jobless Claims missed the mark this morning although Unit Labor Costs were better, Nonfarm Productivity was in line. Manufacturing PMI is out and ISM Manufacturing. Nonfarm Payroll tomorrow will truly dictate the weekly close for Gold.
Technicals: Wednesday, Gold traded perfectly down to first key support at ...
View a short video: Bill Baruch: Trading Futures. Gold, USD, yuan.
Recorded: TradersExpo Chicago July 24, 2018.
Duration: 4:34.