North American News
NASDAQ and S&P snaps two day losing streak
- NASDAQ leads the way to the upside
The major US stock indices are closing with mixed results. Both the S&P and NASDAQ broke two day losing streaks. The Dow industrial eked out a small gain.
The final numbers are showing:
- Dow Industrial Average rose 2.61 points or 0.01% at 33485.28
- S&P index rose 14.63 points or 0.36% at 4105.00
- NASDAQ index rose 91.10 points or 0.76% at 12087.96
- Russell 2000 rose 2.329 points or 0.13% at 1754 2.329% 2.329 points or 0.13%.46
For the shortened trading week, the Dow industrial average closed the week with a modest gain while the S&P and NASDAQ closed lower:
- Dow industrial average rose 0.63%
- S&P index fell -0.11%
- NASDAQ index fell -1.09%
US initial jobless claims 228K versus 200 K estimate
- Initial jobless claims and continuing claims for the current week’s
- Initial jobless claims 228K vs 200 K estimate. Prior revise it to 246K from 198K
- 4 week moving average initial jobless claims 237.75K vs 242K (revised up from 198.25K)
- continuing claims 1.823M vs 1.699M estimate. Last week came in at 1.689M revised up to 1.817M
- 4-week moving average of continuing claims 1.804M vs 1.793M (revised up from 1.692M)
Fed’s Bullard: I think inflation is going to be sticky going forward
- Comments from the Fed’s Bullard
- We need to stay at it to get inflation back down to 2%
- Some yield curve inversion reflects the inflation outlook
- He is less enamored with argument that credit conditions will tighten appreciably to send the economy into recession
- It is not that clear to him that there will be much of a pullback in lending
- He is not yet reviewed Thursday’s revision to jobless claims
- Housing market still seems tight due to inventory shortages
- Inflation seem to be leveling off but wants to see it on a clear downward trend
- Fed can’t declare victory too early on inflation
- Financial stress appears to have abated for now
- 85% probability that financial stress will continue to abate
- If that occurs, Fed should stick to its interest-rate path and get inflation and down while the labor market is still strong
- He continues to be hopeful inflation can be reduced this year with the labor market remaining relatively strong
US 30 year fixed rate mortgage 6.28% April 6 week
- Down marginally on the week according to Freddie Mac
Freddie Mac is reporting that the 30 year fixed-rate mortgage in the week of April 6 decline to 6.28% from 6.32% in the prior week. The 15 year fixed-rate mortgages at 5.64%.
The low rate from the peak reached 6.09% during the week of February 2 for the 30 year mortgage while the 15 year mortgage reached a low yield of 5.14% during the same week.
From Freddie Mac:
Mortgage rates continue to trend down entering the traditional spring homebuying season. Unfortunately, those in the market to buy are facing a number of challenges, not the least of which is the low inventory of homes for sale, especially for aspiring first-time homebuyers.
Preview: March non-farm payrolls by the numbers
- A look at what’s expected for the March 2023 non-farm payrolls report
This is a strange non-farm payrolls report as it falls on the same day as the Good Friday holiday and markets are largely closed. Rather than moving it, the Bureau of Labor Statistics is releasing it at the usual time and that means it will land in thin trading. The market is largely convinced that the Fed is done or almost done already so this report won’t be a game-changer but it’s still NFP and it’s always a top release of the month.
Notably, this report has surprised the consensus to the upside for an astonishing 11 months in a row.
- Consensus estimate +239K (range +78K to +325K)
- Private +210K
- January +517K
- February +311K
- Unemployment rate consensus estimate: 3.6% vs 3.6% prior
- Participation rate prior 62.5%
- Prior underemployment U6 6.8%
- Avg hourly earnings y/y exp +4.3% y/y vs +4.6% prior
- Avg hourly earnings m/m exp +0.3% vs +0.2% prior
- Avg weekly hours exp 34.5 vs 34.5 prior
Here’s the March jobs picture so far:
- ADP employment +145K vs 216K expected
- ISM manufacturing employment 46.9 vs 49.1 prior
- ISM services employment 51.4 vs 54.0
- Challenger Job Cuts +319.4% y/y vs +410% y/y prior
- Philly employment -10.3 vs +5.1 prior
- Empire employment -10.1 vs -6.6 prior
- Initial jobless claims survey week 247K vs 197K expected
JPMorgans Dimon: Banking crisis has increased chance of a recession
- Comments are congruent with recent comments
In an interview with CNN, JPMorgans Dimon says:
- banking crisis has increase the chance of a recession
- banking system is strong and sound
- we are seeing people reduce lending a little bit, cut back a little bit and pull back a little bit
Commodities
Silver clouded by investors’ indecision, fluctuates around $24.90s
- Silver prices show hesitation near YTD highs amidst market uncertainty.
- Oscillators flashed mixed signals, keeping XAG/USD traders at bay.
- XAG/USD Price Analysis: Upside risks at around $25.12; otherwise, it could fall towards $24.00.
Silver price registers back-to-back doji’s at around the YTD highs hit at 25.13 but stays shy of the $25.00 a troy ounce figure. At the time of writing, the XAG/USD is trading at 24.95 after hitting a daily high of $25.00.
Gold dips for the second day
- Gold price takes a hit on disappointing US unemployment claims as the labor market eases.
- US Treasury US bond yields drop, but XAU/USD traders booking profits ahead of US NFP spurred the ongoing dip.
- St. Louis Fed President Bullard warns of sticky inflation, says Fed needs to stay vigilant to reach 2% target
Gold price slides for the second consecutive day, though it’s bracing for the March 20 high at around $2,009.75. Worse than expected, US labor market data accumulated during the week triggered investors worried about a possible recession in the United States (US). Therefore, traders scaled back their bullish bets in the yellow metal. At the time of writing, the XAU/USD is trading at $2,011.28.
WTI crude all settles at $80.70
- Up nine cents or 0.11%
The price of WTI crude futures are settling up nine cents or 0.11% at $80.70. The high price reached $80.96. The low price extended to $79.65.
Looking at the hourly chart below since the gap higher over the weekend, the price has been non-trending between $79 and $81.81. That has allowed the 100 hour moving average to catch up to the price. The 100 hour moving average, comes in a $79.97. A move below it could see further downside probing, but traders will need to get below the $79 low from Monday’s trade to give the sellers more confidence.
EU News
Major European indices close higher
- Mixed results for the shortened week
The major European indices closed the day higher:
- German DAX +0.50%
- France’s CAC , +0.12%
- UK FTSE 100, +1.03%
- Spain’s Ibex, +0.62%
- Italy’s FTSE MIB, +1.29%
Other News
Timiraos: The latest Fed decision was the closest one in years
- The decision was made two days before scheduled announcement
- Bid decisions are usually happen in the week leading up to the FOMC decision, not during the two-day meeting
- Banking system crisis dominated run-up to the March 21-22 meeting and the decision to hike 25 bps was made on March 20 after the SNB actions
- New tools rolled out to address heightened financial stress
- Fed pushed ahead with rate increase to fight inflation
- March decision: raise rates by a quarter point or hold steady
- Swiss authorities’ intervention in global banking system influenced decision
- Fed raised rates by quarter point to avoid losing ground to inflation
- Banking turmoil created risks of rapid tightening in financial conditions
- “We could have gone either way here. A lot depended on how the UBS-Credit Suisse situation worked out,” said the Fed’s Bullard
IMF sees global growth around 3% for the next five years
- IMF says growth will dip below 3% this year
- IMF expects global economic growth to dip below 3% in 2023 and remain around 3% for the next five years, its lowest medium-term growth forecast since 1990.
- Strong and coordinated monetary and fiscal policy actions to respond to the COVID-19 pandemic and Russia’s invasion of Ukraine prevented a much worse outcome in recent years.
- Growth dropped by almost half to 3.4% in 2022 following the shock of Russia’s war in Ukraine from the 6.1% rebound seen in 2021.
- India and China would account for half of global growth in 2023, but about 90% of advanced economies would see a decline in their growth rate this year.
- Low-income countries, saddled by higher borrowing costs and weakening demand for their exports, would see per-capita income growth staying below that of emerging economies.
- IMF chief called on central banks to stay the course in the fight against inflation and to address financial stability risks when they emerge through appropriate provision of liquidity.
- Recent bank failures in Switzerland and the United States had exposed risk management failures at specific banks and supervisory lapses.
- Georgieva called for major step changes, including an estimated $1 trillion a year in spending on renewable energy, and moves to avoid the fragmentation of the global economy, which could shave as much as 7% off global GDP.
- Technological decoupling could see some countries suffer losses of up to 12% of GDP
Cryptocurrency News
Ripple price nears pivotal area that could trigger 20% uptrend
- Ripple price is in the last stage before ending this fade.
- XRP is looking for a level to bounce off higher.
- Expect to see a gradual move higher with variable gains between 10% to 20%.
Ripple (XRP) price is nearing its endgame in this fade. As Ripple price peaked at the end of March at $0.5852, price action has been trending down with lower highs and lower lows. The Relative Strength Index (RSI) as well bears some more downside space, although there is room for a turnaround soon once this fade has reached the end of the line.
Ripple price sees turnaround ahead
Ripple price has roughly another 5% to go in its fade before bears run into a brick wall defending against any further downside move. Bulls will be more than happy to defend that $0.48 level as it bears a substantial importance as a historic pivot level with multiple tests. It already triggered a bounce in April, which pushed XRP price back above $0.52 briefly but was short-lived, unfortunately.
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