North American News
Stocks close near lows
- Dow now negative on the year
It has been a rough day for the major US stock indices as they go out the day near session lows. It was the worst day of the year for the major indices.
- The Nasdaq led the way with a decline of -294.96 points or -2.50% at 11492.31.
- The S&P fell -81.75 points or -2.00% at 3997.35.
- The Dow fell -697.12 points or -2.06% at 33129.60
- Russell 2000 fell -58.14 points or -2.99% at 1888.21
In after hours, earnings releases include:
Palo Alto earnings
- EPS $1.05 versus $0.78 expected
- revenues $1.6 billion versus $1.65 billion expected
Coinbase earnings:
- Earnings-per-share $-2.46 versus $-2.55 expected
- Revenues $0.63 billion versus $0.59 billion expected
US treasury auctions are $42 billion of two-year notes at a high yield of 4.673%
- WI level at the time of the auction was at 4.67%
- High yield 4.673%
- WI at the time of the auction was 4.67%
- Bid to cover 2.61X vs six-month average of 2.65X
- Tail 0.3 bps vs six-month average of 0.0 bps
- Directs (a measure of domestic demand) 22.99% vs. six-month average of 21.2%
- Indirects (a measure of international demand) 62.04% vs. six-month average of 57.9%
- Dealers 14.97% vs. six-month average of 20.9%
S&P Global February flash services PMI 50.5 vs 47.2 expected
- US services and manufacturing index from S&P Global
- Best reading since June
- Prior was 46.8
- Manufacturing 47.8 vs 47.1 prior
- Composite 50.2 vs 47.5 prior
- New orders best since October
- Business optimism highest since May 2022
- Services “new export orders weighed on total new sales, as firms highlighted challenging demand conditions in key export markets”
US January existing home sales 4.00M versus 4.10M estimate
- Existing home sales for January 2023
- Prior month 4.02M revised to 4.03M
- existing home sales 4.00M annualized
- existing home sales % change comes in at -0.7%
- 2.9 months of supply
- median existing home sales price increase 1.3% from a year ago to 359,000
- inventory of unsold homes is at 980,000 at the end of January
- 12th straight month decline
- First-time buyers were responsible for 31% of sales in January, identical to December but up from 27% in January 2022
- All-cash sales accounted for 29% of transactions in January, up from 28% in December and 27% in January 2022.
- Distressed sales5 – foreclosures and short sales – represented 1% of sales in January, identical to last month and one year ago
- According to Freddie Mac, the 30 year fix rate mortgage averaged 6.32% as of February 16. That’s up from 6.12% from the previous week and 3.92% one year ago.
- Northeast-3.8% and is down -35.9% since January 2022. The median price is $383,000 up 0.3% from the previous year
- Midwest fell -5% and is down -33.3% from a year ago. The median price came in at $252,300 up 2.7%
- South Rose +1.1% and is down -36.6% from prior year. The median price came in at 332,500 and increase of 3.4% from a year ago
- West rose 2.9% but is down 42.4% from the previous year. The median price in the West came in at 525,200 down 4.6% from 2022
Canada January CPI 5.9% y/y vs 6.1% y/y expected
- Canadian January 2023 inflation report
- Prior was 6.3%
- CPI m/m +0.5% vs +0.7% expected
- Prior m/m reading was -0.6%
- Gasoline prices 2.9% vs +3.0% y/y in prior
- Gasoline prices +4.7% m/m vs -13.1% prior
- Food 10.4% vs +11.0% y/y prior (prior revised to +10.1%)
- Mortgage interest costs 21.2% vs +18.0% prior
Core measures:
- BOC core y/y 5.2% vs 5.5% expected (5.5% prior)
- BOC core m/m +0.1% vs +0.2% expected (-0.3% prior)
- Median 5.0% vs 5.0% prior
- Trim 5.1% vs 5.3% prior
- Common 6.6% vs 6.6% expected
Commodities
Gold fluctuates around $1840
- Gold price slides after failing to break Monday’s high of 1847.45, down 0.08%.
- China-US tensions around military aid on Russia dented market mood.
Gold price slides in the North American session while the US Dollar (USD) rises sharply on risk aversion. Expectations that the US Federal Reserve (Fed) would tighten monetary conditions “aggressively” keeps investors uneasy. At the same time, Fed officials hawkish rhetoric added to those speculations, with money market futures expecting rates as high as the 5.25%-5.50% range. The XAU/USD is exchanging hands at around 1838.58.
WTI crude all future settle at $76.16
- Down -$0.18 or -0.24%
The price of WTI crude futures are settling at $76.16. That’s down $0.18 to -0.24%.
The high price today reach $77.74. Low price extended to $75.90.
Silver bears have the upper hand below 100 DMA, around $22.00
- Silver faces rejection near the 100-day SMA and comes under some selling pressure on Tuesday.
- The setup still favours bearish traders and supports prospects for a further depreciating move.
- A sustained strength beyond the $22.55-$22.60 region is needed to negate the bearish outlook.
Silver edges lower on Tuesday and snaps a two-day winning streak, albeit manages to hold above the $21.50 level heading into the North American session.
From a technical perspective, the recent bounce from the YTD low, around the $21.20-$21.15 region set last Friday faltered ahead of the $22.00 mark on Monday. The said handle coincides with the 100-day Simple Moving Average (SMA) support breakpoint and should now act as a pivotal point for the XAG/USD.
Some follow-through buying beyond the $22.15 zone, representing the 38.2% Fibonacci retracement level of the recent rally from October 2022, might prompt some technical buying. The momentum could lift the XAG/USD further, though is more likely to meet with a fresh supply near the $22.55-$22.60 hurdle.
That said, a sustained strength beyond the latter will shift the bias back in favour of bullish traders and pave the way for additional gains. The XAG/USD might then accelerate the positive move to 23.6% Fibo. level, around the $23.00 mark, before climbing to the $23.35-$23.40 strong horizontal resistance.
On the flip side, the 50% Fibo. level, around the $21.35 area, seems to protect the immediate downside ahead of Friday’s swing low, around the $21.20-$21.15 zone. Failure to defend the said support levels could make the XAG/USD vulnerable to weaken below the $21.00 mark, towards the $20.60 region.
Given that technical indicators on the daily chart are holding deep in the negative territory, the downward trajectory could get extended further towards challenging the $20.00 psychological mark. The XAG/USD could eventually drop to test the next relevant support near the $19.75-$19.70 horizontal zone.
EU News
European equity close: A rare down day for 2023 but not a particularly bruising one
- Closing changes for the main European bourses
On the day:
- Stoxx 600 -0.2%
- German DAX -0.6%
- Francis CAC -0.4%
- UK’s FTSE 100 -0.5%
- Spain’s Ibex -0.3%
- Italy’s FTSE MIB -0.6%
Lagarde repeats that the ECB intends to hike 50 bps in March
- The market still thinks 75 bps is in play
- Inflation has begun to slow
- I don’t see a wage-price spiral in the eurozone
Other News
What’s happening in the global economy, according to Wal-Mart
- Relevant comments on the global and US economy from Wal-Mart executives in today’s earnings report
Walmart reported earnings today and the top line was good with Q4 revenues at $164 billion compared to $159.5 billion expected. The market isn’t enthusiastic about that with shares down 1.5%.
A big reason for that is a softer guide going forward, including FY revenues up just 2.5-3.0%; though it looks a bit better in Q1, up 4.5-5.0%. That’s a sign that pent-up savings are tapped out and that inflation is biting. In real terms, a 2.5-3.0% rise in spending would be a drop in real spending.
Some relevant comments and details:
- Food inflation has remained more unstable than what we have expected. it’s higher than what we thought it would be
- US comp sales up 8.3% y/y in Q4
- International sales up 2.1% y/y in Q4
- International guidance for 2024 FT +6.0% constant currency
- The investment the company is most excited about is “automation”
- “There is a great deal of uncertainty looking out to the balance of the year. There is still pressure on the consumer. As such, our guidance reflects a cautious outlook on the macroeconomic environment.”
- Noted acceleration to its own private brands in the past 90 days
- We currently expect sales growth to be strongest in the first half of the year then moderate in H2
- We anticipate stubborn inflation in dry grocery and consumables in particular
- Higher-end consumer made up nearly half of the gains we saw in the US in Q4
Cryptocurrency News
Dogecoin price could crash by 14% if the bulls do not pull DOGE up to this level
- Dogecoin price has been veering downwards since its 38% rise in January to trade at $0.085.
- Bearish indicators suggest further corrections could be on the cards, which could result in a drop to $0.074.
- If buyers choose to accumulate the dog-themed token and push the price beyond $0.108, the bearish thesis would be invalidated.
Dogecoin price seems to be continuing its streak of underwhelming recovery as the altcoin is struggling to breach a two-week barrier. Going forward, the altcoin is expected to slide further as the bullish cues do not appear to have any effect on DOGE.
Dogecoin price against the market
While Bitcoin and most of the big market capitalization altcoins have been showing bullish signs, the Dogecoin price is looking at a decline. This is because the lack of growth noted in the first few weeks of the year kept DOGE below the critical resistance of $0.108.
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