NYSE MAC Desk
Market Update

   
   
   
STRAIGHT FROM THE TRADING FLOOR
April 12, 2024 at 9:15 a.m. EDT

by Michael P. Reinking - Sr. Market Strategist

Good morning,
 
Welcome to earnings season, make sure to check out last night’s MAC Desk Preview if you missed it. Yesterday’s PPI report took a little bit of the sting out of the CPI miss from the previous day, but it didn’t really shift Fed expectations too much. The S&P 500 retested last week’s lows again (just under 5,150) and once that level held markets had a reflex rally in the back half of the day. The S&P 500 ended the session up 0.75% but those gains were driven almost completely by strength in mega-cap tech and AI related names, which you could argue is the new defensive trade. The equal weight version of the index ended unchanged.
 
Overnight it was a weak session in Asia. The economic data in China disappointed for the second consecutive day with both imports/exports falling more than expected. European indices on the other hand were trading higher playing some catchup with the US as yesterday’s rally happened after those markets were closed. However, those indices with the exception of the FTSE (which has more commodity exposure) have given up gains coming off with US futures. S&P futures were modestly lower throughout the overnight session, took an additional leg to the downside as bank earnings started coming out but there is also more of a risk off trade with headlines that an Iran missile attack on Israel is imminent. S&P futures are now trading slightly ~0.75% below fair-value giving up all of yesterday’s bounce. This leaves futures about 0.25% above the recent lows and ~1% above the 50d ma. The risk off trade is brining a bid into Treasury markets with yields down ~10bps and the USD index is up ~0.65% to ~$105.75. ICE Brent is up >2% to ~$91.75. Despite the dollar strength metals markets are ripping with gold and copper both up 2%.
 
Bank earnings have been mixed with the focus on disappointing NII results. Other broad themes investment banking looks solid, FICC about in line, expenses seem well controlled, and charge offs a mixed bag. Elsewhere within financials Progressive had very strong results benefitting from auto insurance premium increase highlighted in CPI on Wednesday. Semis will be in focus with reports that China has told telecom companies to phase out US chips in networks by 2027.
 
Bank conference calls will be the focus for the remainder of the day. There are a couple of Fed officials expected to speak and preliminary U of Mich Sentiment will be released at 10:00.
 
Asia:
Japan's Nikkei: +0.2% (+1.4% for the week)
Hong Kong's Hang Seng: -2.2% (UNCH for the week)
China's Shanghai Composite: -0.5% (-1.6% for the week)
India's Sensex: -1.1% (UNCH for the week)
South Korea's Kospi: -0.9% (-1.2% for the week)
Australia's ASX All Ordinaries: -0.3% (+0.3% for the week)
 
Europe:
STOXX Europe 600: +0.3% (+0.1% week-to-date)
Germany's DAX: -0.1% (-1.3% week-to-date)
U.K.'s FTSE 100: +1.1% (+1.3% week-to-date)
France's CAC 40: +0% (+0.0% week-to-date)
Spain's IBEX 35: +0.3% (-2% week-to-date)
 
Sectors/Other Asset Classes:

  • US 2yr -8bps to 4.89%, 5yr -8bps to 4.55%, 10yr -9bps to 4.51%, 30yr -7bps to 4.61%
  • USD index: +$0.75 to $105.81
  • Oil prices - ICE Brent: +2.2% to $91.71, WTI: +2.6% to $87.27, Nat Gas: -0.6% to $1.75
  • Gold: +1.8% to $2,415.50, Silver: +4.2% to $29.44, Copper: +2.3% to $4.35
  • Wheat: +0.1% to $5.84, Corn: +0.2% to $4.30, Soybeans: +0.2% to $11.62, Cotton: -0.8% to $0.85
  • VIX: +1.94 to 16.85
  • Bitcoin: -0.6% to ~70.4k
Central Banks:
  • Bloomberg story highlighting currency moves as there is potential divergence between global central banks with US economic growth remaining resilient and inflation data proving sticky
Commodities:
  • IEA warns continued attacks on Russian refineries could impact diesel markets - Bloomberg
China:
  • China tells telecom companies to phase out the use of foreign chips by 2027 (hitting AMD, INTC) - WSJ
Economic Data:  
  • US:
    • Import Prices: 0.4% vs. 0.3%, prior 0.3%/-0.8%
    • Export Prices: 0.3% vs. 0.3% cons., prior 0.8%/-1.8%
    • 10:00 Prelim U of Mich Sentiment
    • 1:00 Baker Hughes Rig Count
  • Global
    • China Exports: -7.5% vs. -3% cons., prior 5.6%
    • China Imports: -1.9% vs. 1.2% cons., prior -8.2%
    • China New Loans: CNY3090B vs. CNY3560B cons., prior CNY1450B
    • UK Industrial Production: 1.1% vs. 0% cons., prior -0.3%
    • UK Manufacturing Production: 1.4% vs. 0.5% cons., prior 0.3%
    • Sweden CPI: 0.1%/2.2% m.m./y.y vs. 0.4%/2.6% cons. prior 0.2%/2.5%


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