Global Futures Point to an Ugly Friday Session
Updated
Global Futures traded lower on Friday morning, as Biden's "rescue" proposal disappointed investors, as it fell short of infinity at $1.9 Trillion. When that $1,400 is spent in a month, what next? Chair Powell mentioned yesterday that there was a possibility of rate hikes in the future and a tightening of monetary policy (room for a change in policy), but that it might not happen for a few years. Regardless, yields spiked on the remarks, and continued to rally into yesterday's close, with the 10Y yield now sitting around 1.09%, after testing a session high of around 1.135%. The dollar continues it's march higher, with the Inverse HS pattern, looking like a real possibility in the near term. We'll be keeping a close eye on the dollar and the 10Y yield.
SPY is off the overnight lows, but is poised to open below the key 21EMA on the hourly, and also the 50MA (h). Our first target, should we see further downside today, is the 100MA (h) around 374.72, then the 21 day EMA at 373.37. If we lose the 21 day EMA, the lower band of the white ascending channel is in play (368), with the top of the Megaphone sitting just below, around 361. Vix is back at a 24 handle, and refuses to break below it's ascending trendline, now sitting around 21.60. We tested these levels yesterday, before a notable spike in vol into the close.
Retail sales came in weaker than expected this morning, with a -0.7% print, and Retail Sales ex-auto, coming in at -1.4%. This is off the back of weak restaurant spending due to lockdowns, and a drop in online spending. Capacity utilization is still high at 74.5%, which is shocking to me. The government/FED must be picking up half the productivity tab. Gold is tanking as crypto becomes the new favorite hedge against inflation, and continued whacky monetary policy. However, Bitcoin is still notably off it's high's, and is now sitting around 37K.
In other news, JP Morgan saw an approx. 40% increase in profit in the last quarter. No big surprise there, as Wall Street has been the primary beneficiary from this entire spending, and printing binge. I suspect we'll continue to see bank earnings roll in, surprising to the upside.
Thanks for your time today guys! If you enjoyed the analysis, please check out the Hedge of the World website for our live daily play-by-play of markets. Cheers, Michael.
SPY is off the overnight lows, but is poised to open below the key 21EMA on the hourly, and also the 50MA (h). Our first target, should we see further downside today, is the 100MA (h) around 374.72, then the 21 day EMA at 373.37. If we lose the 21 day EMA, the lower band of the white ascending channel is in play (368), with the top of the Megaphone sitting just below, around 361. Vix is back at a 24 handle, and refuses to break below it's ascending trendline, now sitting around 21.60. We tested these levels yesterday, before a notable spike in vol into the close.
Retail sales came in weaker than expected this morning, with a -0.7% print, and Retail Sales ex-auto, coming in at -1.4%. This is off the back of weak restaurant spending due to lockdowns, and a drop in online spending. Capacity utilization is still high at 74.5%, which is shocking to me. The government/FED must be picking up half the productivity tab. Gold is tanking as crypto becomes the new favorite hedge against inflation, and continued whacky monetary policy. However, Bitcoin is still notably off it's high's, and is now sitting around 37K.
In other news, JP Morgan saw an approx. 40% increase in profit in the last quarter. No big surprise there, as Wall Street has been the primary beneficiary from this entire spending, and printing binge. I suspect we'll continue to see bank earnings roll in, surprising to the upside.
Thanks for your time today guys! If you enjoyed the analysis, please check out the Hedge of the World website for our live daily play-by-play of markets. Cheers, Michael.
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