North American News
Stocks rally in the face of “overbought” cries
- Cries are that the stocks are expensive
The major indices are closing sharply higher with the NASDAQ index leading the way. That index never moved into negative territory helped by hopes for a soft landing. The lowest the index reached was +66.6 points (oh not that number).
US PPI data came in weaker than expectations at -0.5%. The core PPI was fell -0.1%. The YoY PPI Final demand tumbled to 2.7%. The initial jobless claims also showed weakness suggesting that jobs market is starting to weaken.
Stocks are overbought. Yields are too low. It will be interesting to see how it all plays out.
The closing levels in the stocks are showing:
- Dow industrial average up 383.19 points or 1.14% at 34029.70
- S&P index is closing up 54.25 points or 1.33% at 4146.21
- NASDAQ index is closing up 236.92 points or 1.99% at 12166.26
- Russell 2000 rose 22.98 points or 1.30% at 1796.68.
US treasury auctions off $18 billion of 30 year bonds at a high yield of 3.661%
- WI yield 3.661%
- High-yield 3.661% which was equal to the WI level at the time of the auction
- WI level 3.661%
- Tail 0.0 versus a six month average of 0.4 basis points
- Bid to cover 2.36X versus a six month average of 2.35X
- Directs 19.8% versus six month average of 19.5%
- Indirects 69.12% versus us six with average of 68.5%
- Dealers 11.09% vs six with average of 11.9%
US March PPI -0.5% m/m vs 0.0% expected
- US March producer price index data
- PPI final demand +2.7% vs +3.0% y/y expected
- Prior was +4.6%
- Final demand prices -0.5% m/m vs 0.0% expected
Ex food and energy:
- +3.4% y/y vs +3.4% expected (prior +4.4%)
- -0.1% m/m vs +0.3% expected (prior 0.0%)
US initial jobless claims 239K vs 232K expected
- US initial claims in continuing claims for the current week
- Initial jobless claims 239K versus 232K estimate
- prior week 228K. No revision to the prior week
- 4-week moving average of initial claims 240K versus 237.75K last week. The average was the highest since November 20, 2021 when it was at 249.25K
- Continuing claims 1.810M versus 1.814 million expected. The prior week was unchanged at 1.823M
- 4-week moving average of continuing claims 1.8135M vs 1.804M last week. This was the highest level since November 13, 2021 when it was at 2.007M
- The largest increases in initial claims for the week ending April 1 were in Indiana (+4,457), Illinois (+1,933), Massachusetts (+1,216), Oregon (+1,052), and South Carolina (+211),
- The largest decreases were in California (-6,833), Kentucky (-3,907), Michigan (-3,281), Ohio (-2,494), and New York (-1,711)
Atlanta Fed wage growth tracker rises to 6.4% in March from 6.1% in February
- Atlanta Fed wage growth tracker increases
The Atlanta Fed Wage growth tracker moved up to +6.4% in March versus 6.1% in February. The tracker is a three month moving average of the median wage growth.
- For people who changed jobs, wage growth increased by 7.3% versus 6.7% previously
- For people not changing jobs the wage gains were 5.9% versus 5.8%
This report is not good news for future inflation. Yesterday CPI YoY fell from 6.0% to 5.0%. The PPI YoY moved from 4.9% to 2.7% this month after a fall of -0.5% for the month. That decline replaced a -1.4% gain a year ago contributed to the sharp fall.
Looking at the chart above, the wage growth pre-September 2021 was centered between 3% and 4% going back to 2015. The high monthly gain reached 6.7% in June and July 2022. The most recent low bottomed at 6.1%. Needless to say wages continues to be a problem for inflation going forward.
Commodities
Silver rallies to new YTD highs, nearby $26.00
- Silver price is poised for upward momentum, above $26.00.
- The rate of Change (RoC) remains bullish, but the RSI portrays XAG as overbought.
Silver price advanced to a new YTD high at $25.96, though it fell short of cracking the $26.00 figure, which would have opened the door towards testing, last year’s peak, nearly $27.00. At the time of typing, the XAG/USD is trading at $25.76 after hitting a low of $25.39.
Gold reaches YTD high around $2,048 amidst US economic slowdown
- Factory gate inflation in the US continued its downtrend, except for core.
- Unemployment claims for the last week jumped for the second consecutive week.
- Gold Price Analysis: Set to test the ATH around $2,075; otherwise, it could drop below $2,000.
Gold price advances though it remains off the highs of the year, reached earlier at around $2,048.79 after US data continued to show the economy is decelerating. Therefore, the US Dollar (USD) weakened as US Treasury bond yields continued their downward trajectory, while Gold rallied on safe-haven flows. The XAU/USD is trading at $2039.10 after reaching a low of $2,013.90.
WTI crude oil futures settle at $82.16
- Down $1.10 or -1.32%
The price of WTI crude futures are selling at $82.16. That’s down $1.10 or -1.32% on the day. The high price reached $83.44. The low price extended to $82.24.
OPEC leaves demand forecast unchanged but flags downside risks to summer outlook
- OPEC comments in its monthly oil market report
- OPEC oil output fell by 86k bpd to 28.8 mil bpd in March
- Sees world oil demand to rise by 2.32 mil bpd this year (unchanged from prev. forecast)
- Recent reopening of China still not sufficient to reverse declining trend in global refinery intakes
- Any economic weakness from rate hikes could weigh on US summer demand
- Demand outlook for OECD also remains challenging
EU News
France’s CAC leads the European indices higher
- Another new record high for the CAC index – 3rd day in a row
The major European indices are all closing higher led by the France’s CAC. That index closed at a new all-time record high for the third consecutive day. The gain today was over 1%.
A snapshot of the closing levels shows:
- German DAX +25.86 points or 0.16% at 15729.47
- Frances CAC +83.89 points or 1.13% at 7480.84
- UK’s FTSE 100 +18.56 points or 0.24% at 7843.39
- Spain’s Ibex +31.30 points or 0.34% at 9310.01
- Italy’s FTSE MIB closed marginally lower by -0.01% at 27626.61 (down -2.73 points)
BOE Pill: Do not expect a discontinuity in household spending as homeowners refinance
- More from BOE’s Pill
- Do not expect a discontinuity in household spending as homeowners refinance mortgages
- Can be too simplistic to look just at DOE inflation forecasts at two year horizon. Assumes a linear response to labor shocks
Other News
IMF’s Georgieva: Inflation rates are still too high
- Speaking to CNBC
- The Fed will be guided by data
- Inflation is coming down but not fast enough
- As long as inflation remains above target the Fed will have to act
- The fact the economy is slowing down suggest the Fed will have to recalibrate policy
- The banking crisis has been a helping hand to the Fed.
- I don’t think there is a banking crisis. There are vulnerabilities that we should’ve expected
- The banking crisis is contained but our message is be watchful for banking concerns
- Labor market is still very strong. Consumer is still very strong
- Credit crunch is not on the horizon
- Growth is going to be 2.8%. That is way above inflation levels but not great
- The average growth rate over the last few decades has been 3.8%
- Need to focus on productivity and protect price stability and financial stability
- Russian economy is going down; nothing to celebrate
- On China, it is a remarkable turnaround. Projecting 5.2% growth for this year.
- This year 2/3 of the growth will come from Asia
US arrests Jack Texiera in connection with classified document leaks
- That’s going to be a long prison sentence
US Attorney General Merrick Garland says that a 21-year-old man named Jack Texeira has been arrested in connection with leaking classified information online.
He is an Air National guardsman suspected of leaking classified Pentagon documents who lived in Massachusetts.
The Washington Post report today detailed how he leaked the documents to a group of around two-dozen gamers on Discord and they spread from there. The New York Times just a few hours ago detailed how deeply US spy agencies have penetrated every part of the Russian government and military. That could backfire on the US and Ukraine if Russia can clean up the leaks. Broad US spying on allies was also detailed.
This is an interesting story but it’s not a market mover.
Cryptocurrency News
Dogecoin price could surge by 20% as traders react to Twitter’s latest move
- Dogecoin price is trading with a bullish bias courtesy of Twitter’s latest announcement.
- DOGE could rise 20% to regain December highs around $0.104.
- A daily candlestick close below the 200-day EMA could invalidate the bullish thesis.
Dogecoin price (DOGE) is trading with a bullish bias, sitting atop key supplier congestion zones as bulls ride the hype of Twitter’s latest announcement. The giant meme coin is recovering from the aftermath of a recent move to restore Twitter’s home button from a Shiba Inu dog to the traditional bird logo. This, coupled with the Bitcoin dominance effect, could help sustain the uptrend for DOGE.
Dogecoin price soars on the Twitter announcement
Dogecoin price is on course to rake in more gains for investors thanks to the latest announcement by Twitter. In a recent development, the giant social media platform has signed a partnership with the trading platform eToro to enable crypto and stock trading in the app.
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