North American News
US stocks close near session lows. NASDAQ down close to 500 points on the day
The major US stock indices are down sharply for the second time in three trading sessions. The Dow industrial average fell nearly 1000 points two days ago and is down by another 800 points today. The NASDAQ index has shed over 500 points or -3.95%. Ouch.
A look at the final numbers shows:
- Dow fell -810 points or -2.38% at 33239/46
- S&P fell -120.95 points or -2.82% at 4175.18
- Nasdaq fell -514.1 points or -3.95% at 12490.74
- Russell 2000 fell -63.72 points or -3.26% at 1890.47
US treasury auctions off $48 billion of to year notes at a high yield of 2.585%
- WI level 2.596% at the top of the auction
- High yield 2.585%.
- WI level at the time of auction 2.596%
- Tail -1.1 basis points. The six month average is 0.1 basis points
- bid to cover 2.74X versus six month average of 2.59X
- Directs 21.4%. The six month averages 17.9%
- Indirects 66.0%. The six month average is 58.6%
- Dealers 12.6%. The six with averages 23.4%
Highlights:
- A negative tail greater than the six month average
- Bid to cover is well above the six month average
- Both domestic and international buyers supporting the auction (directs and directs above their six month averages)
- Dealers are left with a scan 12.6% to distribute
US March new home sales 763K vs 765K expected
- US new home sales data
- Prior was 772K (revised to 835K)
Atlanta Fed GDP Now Q1 GDP tracker cut to 0.4% from 1.3%
- Growth barely positive
The Atlanta Fed GDP Now tracker is nearing flat shortly ahead of the Q1 release.
“After yesterday’s annual revision to retail sales by the US Census Bureau, the nowcast for first-quarter real personal consumption expenditures growth declined from 3.8 percent to 2.4 percent,” the report said.
Commodities
Silver Price Analysis: XAG/USD stabilises in mid-$23.00s, but fails to reclaim 200DMA or $24.00 level
- Silver has recovered some poise on Tuesday after losing over 6.0% in the past three sessions.
- But the precious metal remains at risk of further losses against the backdrop of a strengthening US dollar.
- After XAG/USD failed to retake its 200DMA in the $23.80s, bears are calling for further downside and eyeing 2022 lows.
Spot silver (XAG/USD) prices have recovered some poise on Tuesday after dropping more than 6.0% between last Thursday and Monday. XAG/USD currently trades flat on the day near the $23.60 per troy ounce mark, though failed in an earlier attempt to push back above the 200-Day Moving Average at $23.85 and test key resistance around $24.00.
Precious metal markets owe their stabilisation on Tuesday to a continued drop in US and global bond yields as investors fret about global growth prospects, but continue to face difficulties in staging a rebound as a result of the strong US dollar. The US Dollar Index (DXY) rose momentarily above the 102.00 level for the first time since March 2020 in earlier trade, primarily as a result of weakness in the euro and pound.
Traders are citing a combination of still very ropey broader market risk appetite conditions (which tend to benefit the safe-haven buck) and expectations that the Fed will outpace many of its major G10 central bank peers (like the ECB and BoE) in terms of monetary tightening as supporting the buck on Tuesday and in recent sessions.
While weakness in risk appetite would traditionally be seen as a positive for the likes of silver and other precious metals, a stronger US dollar makes USD-denominated precious metals more expensive for foreign buyers, thus reducing demand. If the buck is strong as a result of Fed tightening expectations, that’s a double whammy, as higher interest rates raise the “opportunity cost” of holding non-yielding assets like silver, further reducing demand.
Technicians might interpret XAG/USD’s failure to retake its 200DMA as a bearish sign moving forward. US Q1 GDP and March Core PCE data out later this week is likely to underline expectations that Fed tightening is on autopilot for the rest of the year, and could further undermine silver as the week drags on. Longer-term bears will be eyeing an eventual pullback all the way lower to support in the form of the 2022 lows in the $22.00 area.
Crude oil futures settle at $101.70
- Up $3.16 or 3.21%
Yesterday the price of WTI crude oil settled at $98.54. That settlement was down -$3.53 on the day. Today the rebounded higher is nearly equal to the decline from yesterday. The contract gained $3.16 or 3.21% to the settle price of $101.70.
Looking at the hourly chart above, the price high today reached $102.78 which was just below the 200 hour moving average at $102.80. Earlier today, the price moved above the 100 hour moving average and the 50% midpoint of the range since April 11 at $101.07. That level has held support since breaking above earlier today.
With the settle price at $101.70, the price is trading between the 100 hour moving average below and the 200 hour moving average above.
It would now take a move outside of one of those extremes to give traders the next bias clue.
Move above the 200 hour moving average would be more bullish. Move below the 100 hour moving average will be more bearish
EU News
Major European indices give up gains and close lower on the day
- Major indices close near lows
The fall in the US stocks helped to reverse the European stocks over the last few hours of trading. The major indices are all closing lower on the day (the UK FTSE 100 is near unchanged).
The final numbers are showing:
- German DAX, -1.2%
- France’s CAC, -0.54%
- UK’s FTSE 100 +0.08%
- Spain’s Ibex, -1.58%
- Italy’s FTSE MIB, -0.95%
The highs for the day in those major indices saw the:
- German DAX, +1.38%
- France;s CAC, +1.34%
- UK’s FTSE 100, +1.12%
- Spain’s Ibex, +151%
- Italy’s FTSE MIB, +1.02%
Other News
Russia sounds like it’s serious about cutting off gas this time
- If Europe really needs the gas, it will pay in rubles
It’s been a wild ride in European natural gas today.
There’s a game of chicken going on at the moment between Russia and Europe. The latest headline is that Russia’s Gazprom has informed Bulgaria that it will halt gas supplies as of April 27 if it doesn’t pay in rubles.
Three things can now happen:
- Europe pays in rubles
- Russia abandons its demand
- Russia cuts off the gas
The taps are set to be turned off tomorrow. Europe has been talking tough about surviving without Russian gas. Thanks to a mild winter, they have some inventories but in six months we’ll be back into heating season and those inventories will be gone fast.
The US is talking about more LNG but there simply isn’t the capacity.
European energy-intensive companies can’t continue to be pay high prices for gas and electricity and remain competitive. The odds of a European recession are growing but what happens next depends on what happens next on gas.
VP Kamala Harris has tested positive for Covid
- Pres. Biden has not been in close contact in recent days according to the White House
VP Kamala Harris has tested positive for coronavirus. She has no symptoms and has no recent close contact with Pres. Biden according to the White House.
Brainard officially promoted to Fed vice chair
- Fed’s Brainard secures enough Senate votes to win confirmation
The vote is still ongoing but she has enough votes. All that’s left now is the formalities. Brainard is a strong pick to be the next Fed chair if Democrats hold onto the White House. Though she is 60 so the clock is ticking if a Republican wins the White House and she has to wait for another cycle.
Cryptocurrency
Musk’s indirect pump of Dogecoin; Bitcoin’s turnaround after stocks
- Bitcoin is on the rebound.
Bitcoin has gained 4.1% in the past 24 hours, reaching $40.6K. Ethereum rose even more strongly, up 5.3% to $3000. Other altcoins from the top 10 rose from 2.5% (XRP) to 25% (Dogecoin). The total capitalisation of the crypto market, according to CoinMarketCap, increased 3.9% overnight to $1.87 trillion. The Bitcoin Dominance Index added another 0.1 percentage point, to 41.3%.
The cryptocurrency Fear and Greed Index rose 4 points to 27 by Tuesday and moved into “fear” status. Bitcoin updated to mid-March lows around $38,200 in the first half of Monday. BTC subsequently rebounded and strengthened gains in the US session along with the reversal of US stock indices. Dogecoin soared 25% and returned to the top 10 cryptocurrencies on the back of news of Twitter’s purchase of the social network by Elon Musk. DOGE is Musk’s favourite coin for payments, and the Tesla founder has previously indicated that he intends to have it used as payment for purchases on Twitter.
Billy Markus : new opportunities for holders of this cryptocurrency and strengthen DOGE’s position in the ecosystem
The bitcoin buying strategy has proved highly successful, MicroStrategy CEO Michael Saylor said.
As of April 14, MicroStrategy remains the largest publicly traded company in terms of bitcoin investments, with assets of 129,200 BTC purchased for $3.97 billion at an average price of $30,700, MicroStrategy noted in its 2021 annual financial report.
Hedge fund SkyBridge Capital, founded by former US politician Anthony Scaramucci, plans to move most of its assets under management into cryptocurrency as it sees the prospect of “huge” growth in the sector. The Central African Republic has become the first country in Africa to recognise bitcoin as a legitimate means of payment. Sang Lee, co-founder of cryptocurrency financial services provider VegaX Holdings, said that institutions dealing with traditional finance and banks have already fallen far behind due to the rapid development of the crypto industry.