North American News
Closing levels: Stocks puke into the close. Nasdaq falls to the lowest in a year
- Closing changes for the day, week and month
The old adage is that stocks don’t bottom on Fridays. Of course, it’s also the final trading day of the month so that could have led to some special selling flows that could reverse on Monday as we begin May.
On the day:
- S&P 500 -3.6% worst single day since June 2020. Lowest close since May 2021
- Nasdaq -4.3%
- DJIA 2.8%
- Russell 2000 -2.9%
- Toronto TSX Comp -1.7%
Amazon was down 14% in its worst day since 2006.
On the week:
- S&P 500 -3.3%
- Nasdaq -3.9%
- DJIA -2.5%
- Russell 2000 -4.0%
On the month:
- S&P 500 -8.8% — worst monthly drop since March 2020
- Nasdaq -13.3% — largest monthly decline since 2008
- DJIA -4.9% — worst monthly drop since March 2020
On the year, the Nasdaq is now down 21.2%. With that as a monthly close, it’s a bear market in tech stocks.
Drawdowns in big-cap tech:
- AAPL 13.2%
- MSFT 18.7%
- GOOGL 23.6%
- TSLA 29.0%
- AMZN 34.1%
- NVDA 44.2%
- FB 47.4%
- NFLX 72.3%
The first look at Q2 GDP from the Atlanta Fed tracker +1.9%
- Not a big bounce back in Q2 growth seen
The Atlanta Fed’s tracker did a much better job of forecasting GDP in Q1 than Wall Street. It was at +0.4% for this week’s reading compared to the +1.1% consensus. The reading was -1.4%.
The first reading on Q2 is better but only puts H1 growth into slightly positive territory. Of course, it’s still very early in the quarter and this estimate will be constantly adjusted for the next three months.
US March PCE core +5.2% y/y vs +5.3% expected
- Highlights of the March PCE report
- Prior was +5.4% y/y (revised to +5.3%)
- PCE core MoM +0.3% vs +0.3% expected
- Prior MoM +0.4%
- Deflator YoY +6.6% vs +6.4% prior (revised to +6.3%)
- Deflator MoM +0.9% vs +0.6% prior
Consumers spending and income for March:
- Personal income +0.5% vs +0.4% expected. Prior month +0.5%
- Personal spending +1.1% vs +0.7% expected. Prior month +0.2%
- Real personal spending +0.2% vs -0.4% prior
Commodities
Gold Price Forecast: Further Chinese lockdowns sap XAUUSD demand – TDS
This week, gold hit its lowest levels since late February near $1,880. As economists at TD Securities note, Chinese lockdowns fuel demand concerns across the yellow metal market.
Shanghai traders are liquidating their gold length at a fast clip
“Our tracking of the top SHFE traders’ net length highlights continued and substantial liquidations from Shanghai traders cohort since last Friday. After all, concerns are emerging surrounding the broadening lockdown’s impact on domestic demand for the yellow metal. With economic activity also plunging, jewelry sales are likely to collapse as well, which erodes a major pillar of support for the yellow metal.”
“The outlook for investment demand also remains muted, with gold bugs staring down the barrel of a hawkish Fed, while safe-haven flows associated with the war in Ukraine begin to fizzle out.”
“A contingent of participants also expects the Fed’s ability to constrain supply-side inflation is limited, which argues for a stagflationary regime in which gold will be in high demand as a store-of-value. However, the decline in prices is rather nodding to a growing cohort which expects that the last month’s inflation print may have marked the peak.”
Silver Price Analysis: XAG/USD boosted by buck weakness, though unable to hold at session highs above $23.50
- Silver prices have risen on Friday, boosted by month-end profit-taking in the US dollar.
- But XAG/USD has pulled back sharply from intra-day highs in the $23.50s, and remains vulnerable.
- Markets are focused on upcoming US Core PCE inflation data and next week’s Fed meeting.
Pre-month-end profit-taking in the US dollar, which has seen significant strength in recent weeks that has weighed heavily on precious metals, is giving spot silver (XAG/USD) prices a modest lift on Friday. XAG/USD was last trading higher by about 0.5% in the $23.25 area per troy ounce, more than 1.5% higher versus Thursday’s sub-$23.00 lows, though the precious metal has seen a sharp more than 1.4% pullback from earlier session highs in the $23.50s.
Silver traders are bracing for the release of US Core PCE inflation data for March at 1330BST, which will probably just reaffirm the scale of the inflation problem currently plaguing the US economy, before focus then turns to next week’s Fed meeting. With policymakers at the bank now seemingly in unanimous agreement that getting interest rates to around 2.5% by the year’s end is appropriate (meaning a series of 50 bps rate hikes, starting next week, are likely) and increasingly leaning toward’s the need to take interest rates into outright restrictive territory (i.e. above 2.5%) to tackle inflation, risks to the US dollar likely remain tilted to the upside for the foreseeable future.
In that regard, it probably isn’t to surprising that XAG/USD bears jumped on the opportunity to sell the precious metal when it rallied back into the $23.50s and may be looking for a retest of Thursday’s weekly lows under $23.00. Even if the positioning-related pullback in the US dollar does continue next week and XAG/USD rebounds into the mid-$23.00s once again, any recovery back above the 200-Day Moving Average near $23.80 will be difficult.
Crude oil gives up earlier gains and settles down $0.67 at $104.69
- Crude oil well off it’s high for the day near $108
The price of WTI crude oil futures rose to near 8% on the day at session highs. Those highs moved into a swing area ahead of the recent April high (at $109.05). That swing area came between $107.86 and $108.14. Sellers leaned in last four hours has seen a steady and quick move back to the downside.
That move lower erased gains for the day, and the contract is settling at $104.69. That’s down $0.67 on the day.
A week ago, the trading closed at $101.68. At the settlement price, the is still up 2.96% on the week (up $3.01) and near.
This week, the low price extended to $95.25 on Monday before rallying up to the 200 hour moving average on Tuesday and finally breaking above that moving average during yesterday’s trade. As mentioned the high price today extended up to the swing area and near $108.00.
The $108.00 level solidified as an upside resistance target today/this week. The 200 hour MA at $102.23 and the rising 100 hour MA at 101.87 will be key levels on the downside in the new trading week.
EU News
European shares ending with gains for the trading day
- For the week, the indices are mostly down modestly
The major European indices are closing higher on the day. A snapshot of the provisional closes are showing:
- German DAX, +0.7%
- France’s CAC, +0.25%
- UK’s FTSE 100, +0.4%
- Spain’s Ibex, +0.9%
- Italy’s FTSE MIB +0.75%
For the trading week, the major indices are down modestly lower with the exception of the UK FTSE 100 :
- German DAX, -0.4%
- France’s CAC, -0.75%
- UK’s FTSE 100 +0.3%
- Spain’s Ibex, -0.75%
- Italy’s FTSE MIB, -0.2%
Other News
Russia’s Lavrov: Most key customers agreed to gas-payment terms
- Comments from the Russian foreign minister
- Moscow and Kyiv could already have achieved major results at peace talks but Kyiv is changing its position under orders from the US and UK
- Russia does not consider itself to be at war with NATO
- Any shipment of a foreign weapon into Ukraine is a legitimate target for Russia
In separate comments, Zelensky said there was a high probability that peace talks would end.
TTF prices have finished up the week flat, suggesting that those who needed to know this already did.
Cryptocurrency
Goldman Sachs first ever lending facility backed by Bitcoin
- Goldman Sachs Group Inc. offered its first ever lending facility backed by Bitcoin, in a significant step for a major U.S. bank that accelerates Wall Street’s embrace of cryptocurrencies. Goldman Sachs secured lending facility lent cash collateralized by Bitcoin owned by the borrower
Info comes via Bloomberg
- Goldman Sachs Group Inc. offered its first ever lending facility backed by Bitcoin
- The secured lending facility lent cash collateralized by Bitcoin owned by the borrower
Wall Street’s embrace of crypto continues.
Fidelity Investments plan to allow investors to put bitcoin in their 401(k) accounts
The plan has been met with push-back from the US Labor Department.
Wall Street Journal with the info:
- “We have grave concerns with what Fidelity has done,” Ali Khawar, acting assistant secretary of the Employee Benefits Security Administration, said in an interview with The Wall Street Journal.
- Mr. Khawar’s group works inside the Labor Department to regulate company-sponsored retirement plans.
- In the interview, he said he views cryptocurrency as speculative. There is “a lot of hype around ‘You have to get in now because you will be left behind otherwise,’” he said.
Fidelity disclosed its plan to give the 23,000 companies that use its 401(k) services the option for workers to allocate as much as 20% of their nest eggs to bitcoin.