Can Stability Overseas Offset Earnings Shock?

By:

President of Blue Line Futures

Market Activity

– Earnings from Apple and Amazon after the bell brought an immediate shock to the broad market

– Amazon is down about 10% after the fourth largest company in the U.S. by market cap lost $7.56 per share when +$8.37 was expected.

– Amazon recorded a $7.6 billion loss from Rivian’s stock and revenue growth increased by only 7%, the slowest since 2001. It added that revenue could drag through the fourth quarter.

– Apple beat top and bottom-line estimates, but that is not enough in this environment. The stock is down about 2% after the company said supply chain problems could reduce sales by as much as $8 billion in the current quarter.

– Intel didn’t help, although beating top and bottom estimates, the company’s guidance disappointed and the stock is down about 4% premarket.

– Every major stock from a deluge of mixed earnings this morning is down, except Honeywell.

– Chevron’s EPS missed on lofty expectations, but Exxon’s EPS miss was in part due to a hit from its Russian operations.

– Stocks in China finished the week on great strength after the country’s Communist Party promised added stimulus to boost the economy in the wake of virus lockdowns. Hang Seng +4.01%, Shanghai Composite +2.41% and KWEB, the China Internet ETF, is +10% premarket.

– The U.S. Dollar spiked to a new swing high versus the Chinese Yuan but reversed sharply, to trade down 0.5%, the USDCNH is still +4.2% on the month but the move has certainly lifted the metals complex.

– Q1 GDP data from the Eurozone showed growth, unlike the U.S., despite the Ukraine-Russia war. Though growth was more a sign of a later reopening versus the U.S.

– Eurozone CPI set a new record at 7.5%, but in line with expectations.

– Core PCE for March, the Federal Reserve’s preferred inflation indicator, came in at 5.2% versus 5.3% expected. February was revised from 5.4% to 5.3%.

– Both Personal Spending and Income topped expectations; 1.1% vs 0.7% and 0.5% vs 0.4%, respectively, with revisions high for February.

– Employment Cost Index jumped by 1.4% in Q1, most since data goes to 2008.

E-mini S&P (June) / NQ (June)

S&P, yesterday’s close: Settled at 4283.50, up 103.25

NQ, yesterday’s close: Settled at 13,454.75, up 445.75

– Almost out of the woods yesterday but slammed on earnings, highlighted above.

– Positive tailwinds from China overnight, highlighted above.

– Per Midday Market Minute, we needed to close above 4492.75 to bring added tailwinds. Traded to 4303.50 and matched the Tuesday overnight high before failing into the close.

– We maintain a cautiously Bullish Bias; risk is shifting to the upside due to excessive negativity and measured downside.

– There have been great, two-sided trading opportunities all week.

– Price action has fallen into an overnight range, defined by first and second support and resistance in each, listed below.

– Look for continued action through the first hour above or below our Pivot and point of balance at …. Click here to get our (FULL) daily reports emailed to you!

Crude Oil (June)

Yesterday’s close: Settled at 105.36, up 3.34

– Crude roared higher yesterday after Germany is said to drop opposition to Russian Oil embargo, highlighted in the Midday Market Minute.

– We view stable GDP growth and inflation from the Eurozone relative to expectations as a bullish catalyst.

– Reports that Russian Oil output down 9% in April MoM, remember our spare capacity narrative as OPEC+ looks to add 400,000 bpd in June next week.

– Price action is testing a big level of resistance aligning multiple indicators with a trend line from March 24th high.

– Bulls are in control and looking to break out above trend line if prices hold above … Click here to get our (FULL) daily reports emailed to you!

Gold (June) / Silver (July)

Gold, yesterday’s close: Settled at 1891.3, up 2.6

Silver, yesterday’s close: Settled at 23.181, down 0.324

– Core PCE, the Fed’s preferred inflation indicator, was soft. But Employment Cost Index surged by a record 1.4% in Q1, another gauge of inflation. Weighing on precious metals from overnight highs.

– China stimulus talks, referenced above, boosted metals overnight. Coupled with USDCNH reversing from a new high.

– Gold session high of 1921.3 is a direct retest and early failure at recurring 1923.7-1924.9 level aligning with 2011 record.

– Silver Pac-Man lows yesterday but cannot revisit and take out 22.94 today.

– Buyers of Silver yesterday, off our discussion here and Midday Market Minute, had an opportunity to capitalize overnight with a high of 23.65 (shy of 23.75-23.80 resistance), but still a disappointing turn lower. A break below 22.94 opens door to next major three-star support at … Click here to get our (FULL) daily reports emailed to you!

Originally Posted on April 29, 2022 – Can Stability Overseas Offset Earnings Shock?

Disclosure: Blue Line Futures

Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results. The information contained within is not to be construed as a recommendation of any investment product or service.

Disclosure: Interactive Brokers

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Blue Line Futures and is being posted with permission from Blue Line Futures. The views expressed in this material are solely those of the author and/or Blue Line Futures and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

In accordance with EU regulation: The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.

Any trading symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

Disclosure: Futures Trading

Futures are not suitable for all investors. The amount you may lose may be greater than your initial investment. Before trading futures, please read the CFTC Risk Disclosure. A copy and additional information are available at ibkr.com.