North American News
Major US stock indices close lower but recover about half of the day declines
- Still close higher for the week
The major US stock indices are closing the day lower but recovered nicely off of session lows.
The final numbers are showing
- Dow industrial average -143.22 points or -0.42% at 33886.48. The Dow industrial average was down -298.85 points at session lows..
- S&P index -8.58 points or -0.21% at 4137.63. The S&P was down -33.01 points at session lows.
- NASDAQ index -42.82 points or -0.35% at 12123.46. NASDAQ index was down -139.72 points at session lows.
- Russell 2000 fell -15.52 points or -0.86% at 1781.15
For the trading week, the major indices are closing higher:
- Dow industrial average rose 1.2%, and is now up 4 consecutive weeks
- S&P index rose 0.79% and is up four of the last five trading weeks
- NASDAQ index rose 0.29%. It too is up four of the last five trading weeks
- Russell 2000 rose 1.52% for the week.
Atlanta Fed GDPNow estimate for 1Q growth rises to 2.5% from 2.2% last
- Up from 1.5% on April 5
The Atlanta Fed GDPNow estimate for Q1 growth increased to 2.5% from 2.2% last: In their own words:
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2023 is 2.5 percent on April 14, up from 2.2 percent on April 10. After recent releases the US Bureau of Labor Statistics, the US Census Bureau, the US Department of the Treasury’s Bureau of the Fiscal Service, and the Federal Reserve Board of Governors, the nowcasts of first-quarter real gross private domestic investment growth and first-quarter real government spending growth increased from -6.5 percent and 2.2 percent, respectively, to -5.9 percent and 2.6 percent.
FED Waller: Recent data show Fed hasn’t made much progress on inflation, more hikes needed
Comments from Waller
- Rates need to rise further
- Extent of further increases depends on data
- Still uncertain how SVB failure and bank stress will impact broader credit conditions
- Monetary policy will need to remain tight for ‘substantial’ period and longer than markets anticipate
- Q1 data continue to surprise with stronger growth
- Significant credit tightening could offset the need for rate hikes, but judgement difficult in real time
- Developments so far validate decision to hike at the last meeting
- Liquidity steps on SVB appear to have worked
- Job demand has been declining via falling job creation rather than layoffs
US import prices for March -0.6% versus -0.1% expected
- US import and export prices for March 2023
- US import versus -0.6% versus -0.1% expected. The prior month was revised higher to 0.2% from -0.1% previously reported
- US export prices -0.3% versus -0.1% expected. The prior month was revised higher to 0.4% from 0.2% previously reported
- import prices a year on year -4.6% versus -1.0% last month. That is the largest YoY decline since the index fell -6.3% in May 2020
Fed’s Goolsbee: Retail sales number might show some of the lag of monetary policy
- Comments from Goolsbee on CNCB
- If credit conditions are tightening, that does the Fed’s work
- With this retail sales number, we might be seeing some of the lag of mon pol
- I think inflation is coming down but there’s clear stickiness in some of the numbers
- I want to see all the data before deciding on May
- I’m going to spend the next few weeks figuring out the amount of credit tightening going on
- A mild recession is definitely on the table as a possibility
US March retail sales -1.0% vs -0.4% expected
- US March 2023 retail sales data
- Prior was -0.4%
Details:
- Ex autos -0.8% vs -0.3% expected
- Prior ex autos -0.1
- Control group -0.3% vs -0.3% expected
- Prior control group +0.5%
- Ex autos and gas -0.3% vs 0.0% prior
- Gasoline stations -5.5% vs -0.6% m/m prior
- Electronics and appliance stores -2.1% vs +0.3% m/m prior
- Furniture stores -1.2% vs -2.5% m/m prior
- Restaurants +0.1% vs -2.2% m/m prior
US March industrial production +0.4% vs +0.2% exp
- US March 2023 industrial production
- Prior was +0.32%
- Mining output -0.5% vs -1.0% prior
- Manufacturing output -0.5% vs -0.1% exp
- Capacity utilization 79.8% vs 79.0% exp
- Motor vehicle assembly rate fell to 10.11m units vs 10.31m prior
- Industrial output ex autos and parts +0.5% vs +0.2% prior
UMich US April consumer sentiment 63.5 vs 62.0 expected
- UMich consumer sentiment beats estimate
- Prior was 62.0
- Current conditions 68.6 vs 67.3 expected (prior 66.3)
- Expectations 60.3 vs 60.0 expected (prior 59.2)
- 1-year inflation 4.6% vs 3.6% prior
- 5-10 year inflation 2.9% vs 2.9% prior
Waller Q&A: I don’t think we need to hike quite as high as in February
- Comments from Waller in his Q&A
- SVB failure did keep estimate of terminal Fed funds from rising more
- Inflation exploded on us at the end of 2021 because inflation was screaming
- We need to get core inflation down, it’s been sideways but rents move with a lag
- What we’re hearing in the data isn’t really supply chain problems, it’s demand
- The US dollar as a reserve currency and basis of trade is voluntary arrangement
- I don’t think there’s a serious threat to the US dollar, the euro didn’t even come close
Commodities
Silver hit YTD high at $26.08 but retreated on a bearish-engulfing pattern
- XAG/USD is poised for five consecutive weeks of gains, up 0.81%.
- Silver’s break below $26.00 opened the door for a test of $25.00.
Silver price reached a new YTD high at $26.08, but retraces, as traders booking profits, are forming a bearish-engulfing candle pattern, suggesting that further downside is warranted. Among technical indicators, US economic news and Fed speakers underpinned the US Dollar (USD) to the detriment of the white metal. At the time of typing, the XAG/USD is trading at $25.23, down 2.26%.
XAG/USD Price Action
The XAG/USD is still upward biased from a daily chart perspective. The emergence of a bearish candlestick pattern and the Relative Strength Index (RSI) exiting oversold territory triggered profit-taking in the white metal. Additionally, a negative divergence between XAG/USD’s price action and the Rate of Change (RoC) indicates that buying pressure is waning, exacerbating Silver’s drop below $26.00.
If XAG/USD falls below $25.00, that will pave the way toward the February 2 high at $24.63, the previous resistance turned support, followed by the 20-day Exponential Moving Average (EMA) at $24.20. Once cleared, the psychological $24.00 level would be next.
Conversely, for a bullish continuation, the XAG/USD needs to get above the April 13 low of $25.40, which could motivate XAG buyers to re-enter the market at solid price levels. In that case, the XAG/USD first resistance would be the YTD high at $26.08, followed by April 18, 2022, swing high at $26.21, followed by 2022 high at $26.94.
WTI crude oil settles at $82.52
- Up $0.36 on the day
The price of crude futures settled up $0.36 at $82.52. The high price reached $83.12. The low price reached $81.76.
The price this week moved up $1.82 or 2.24%
EU News
European indices close week with gains
- France’s CAC sets another all-time record
The major European indices are closing higher on the day. A snapshot of the closes shows:
- German DAX +0.5%
- Frances CAC +0.52%
- UK’s FTSE 100 +0.36%
- Spain’s Ibex +0.57%
- Italy’s FTSE MIB +0.89%
The France’s CAC closed at a new record high for the fourth consecutive day.
For the trading week, the major indices also closed in positive territory:
- German DAX rose 1.34%
- Frances CAC rose 2.66%
- UK’s FTSE 100 rose 1.68%
- Spain’s Ibex rose 0.54%
- Italy’s FTSE MIB rose at 2.42%
ECB’s Simkus: Core inflation is expecetd to peak next month or shortly afterwards
- Comments from Simkus
- The ECB isn’t done hiking rates
- Seeing headline inflation fall on energy
- May rate hike will be either 50 or 25 bps depending on the data
ECB sources: Policymakers call for a full halt to QE reinvestment in H2
- ECB sources cited by Reuters
- A “growing number” of ECB policymakers calling to stop reinvesting cash into its largest bond buying program
- Balance sheet reduction is moving too slowly given priority to inflation
- ECB holds 3.2 trillion euros in govt bonds via APP
- Report cites five sources
- None advocated outright bond sales
Other News
Larry Fink says inflation unlikely to fall below 4% anytime soon
- The year-over-year comps are extremely favorable
Blackrock CEO Larry Fink is on CNBC at the moment and one headline from him is that US inflation won’t fall below 4% anytime soon.
This week’s CPI number was 5.0% so there’s some breathing room above 4% but the next few months are going to be extremely favorable for falling year-over-year numbers. There’s a combined 2.5 percentage points of inflation set to fall out of the year-over-year metric through June.
SNB’s Jordan: We can’t exclude that we may have to tighten again
- Comment from the SNB leader
- “We can’t exclude that we might have to tighten monetary policy again” he said in a press interview
This is hardly a revelation with the market looking for either 25 bps (61%) or 50 bps (39%) at the June 22 meeting and about 60 bps more in tightening is priced in.
Cryptocurrency News
Luna Classic could fall 5% to the bottom of the consolidation phase
- Luna Classic price has been stuck within a consolidation phase under $0.000135 since March 8.
- LUNC could fall 5% as overhead pressure builds up.
- A daily candlestick close above the 50-day EMA at $0.000134 could invalidate the bearish thesis.
Luna Classic price (LUNC) maintains a bearish outlook on the daily chart as bears appear more aggressive compared to bulls. Evidence of this can be seen in the instances where every bullish attempt has been met with a correction, keeping the altcoin trapped within that zone. The altcoin has been trapped within a consolidation zone for over a month, moving horizontally as the Terra ecosystem lacked a sufficient catalyst to provoke a breakout.
The lack of directional bias could be attributed to FUD (Fear, Uncertainty, Doubt) in the market due to the increased regulatory clampdown and the recent arrest of Terra’s founder Do Kwon in March.
Luna Classic price risks 5% decline if bulls let down their guard
Luna Classic price is trading at $0.000126 at the time of writing, up 0.25% in the last 24 hours, although the trading activity over the same period is down almost 20%. The altcoin is facing heavy overhead pressure that has weighed down on LUNC and prevented an upside move. The 50-day Exponential Moving Average (EMA) at $0.000134 has kept the altcoin suppressed since the first week of February, along with the 100- and 200-day EMAs at $0.000150 and $0.000183, respectively.
Unless buyer momentum increases among LUNC bulls, Luna Classic price could revisit the bottom of the consolidation zone at $0.000120, denoting a 5% downswing.
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