Global Economic Overview - 05/12/2023

NEWS AND MARKET COMMENTARY

Global Equities

• Stocks Slip as Rally Takes Breather
• European Markets Close Lower as Miners, Energy Stocks Retreat; Gold Hits Record High

Global Fixed Income

• S. 10-Year Treasury Yield Rises as Investors Assess Path for Interest Rates
• Euro Zone Yields Hit Multi-Month Lows as Markets Increase Bets on Rate Cuts

Currencies

• Dollar Regains Ground After Sell Off; Bitcoin Breaches $42000
• Euro Drops Below the 20-Day SMA, Mixed Signs

Energy

• Is a New Oil Price War Looming?
• Crude Oil Markets Pricing in Recession

Metals

• Gold Markets Have Wild Ride at the Open
• Silver Has Been All Over the Place Monday

Global Politics/News

• Fed Policy Pivot Could Prompt Early Rate Cuts
• White House Warns it is ‘Out of Money and Nearly Out of Time’ to Aid Ukraine?

Relevant Government Reports

World Agriculture Supply and Demand Estimates (WASDE)

USDA Agency Reports

Producer Price Index (PPI)

Consumer Price Index (CPI)

U.S. Treasury Report

Fed Report

EIA Reports

EIA Summary

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Financial

Closing Commentary

Quote of the Day: Failure will never overtake me if my destination to succeed is strong enough. – Og Mandino

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Equities: Stocks slipped on Monday as investors questioned whether the market was getting ahead of itself following five straight winning weeks. The?Dow Jones Industrial Average?shed 41.06 points to close at 36,204.44. The?S&P 500?dropped 24.85 points to 4,569.78. The?Nasdaq 100?declined 157.91 points to 15,839.67 as investors sold Big Tech shares, which have led the market’s gains this year. As stocks stagnated, bitcoin and gold rallied to start the week. Bitcoin?passed the $41,000 mark?to notch a 19-month high, while gold?reached its highest nominal intraday level?ever. The broad S&P 500?posted its?highest close?since March 2022 on Friday, bringing its year-to-date gains to almost 20%. The blue-chip Dow is up more than 9% for the year, while the tech-heavy Nasdaq Composite has climbed 35% in 2023. All three indexes clinched their fifth straight positive weeks last Friday. It was the first weekly win streak of that length since 2021 for the Dow. The rebound in stocks since October came as investors increasingly bet that the Federal Reserve?will start cutting interest rates next year. Investors maintained this belief last week even as Fed Chairman Jerome Powell tried to tamp down rate-cut expectations,?saying it’s “premature”?to anticipate easing in policy. TECHNICAL OUTLOOK - The Dow and the S&P remain above the 14, 21 day moving average.

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Crude Oil: Oil prices fell on Monday on concern about a drop in demand and on continued uncertainty about the depth and duration of OPEC supply cuts. Saudi Arabia's energy minister Prince Abdulaziz bin Salman said in a televised interview with Bloomberg on Monday that he expected OPEC and its allies to bring about the 2.2 million in crude oil production cuts announced last week. OPEC last week announced production cuts that are voluntary in nature, raising doubts about whether or not producers would fully implement them. Investors were also unsure about how the cuts would be measured. Traders over the past five months have waited to see if cuts in production as well as predicted changes in demand would come to fruition. Elsewhere, Western countries have?stepped up efforts?to enforce the $60 a barrel price cap on seaborne shipments of Russian oil imposed to punish Moscow for its war in Ukraine. Washington on Friday imposed?additional sanctions?on three entities and three oil tankers. TECHNICAL OUTLOOK - The crude remains below the 14, 21 day moving average.

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Metals: Gold?and?silver prices?sharply lower in midday U.S. trading Monday, after gold overnight spiked to a new record high of $2,152.30, basis February Comex futures. Silver hit a seven-month high overnight. The two precious metals markets are seeing the shorter-term futures traders taking profits after the recent solid gains. Technically, February gold futures prices scored a record high of $2,152.30 overnight and then promptly reversed course to sell off sharply and score a technically bearish "key reversal" down on the daily bar chart. That's one chart clue the bulls are out of gas and that a near-term market top is in place. The bulls so still have the overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Bulls' next upside price objective is to produce a close above solid resistance at today's record high of $2,152.30. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,000.00. March silver futures prices scored a big and bearish "outside day" down on the daily bar chart today. The bulls appear to have run out of gas. The silver bulls do still have the overall near-term technical advantage. Prices are in a two-month-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at today's high of $26.34. The next downside price objective for the bears is closing prices below solid support at $23.50. TECHNICAL OUTLOOK – Gold and silver are both above the 14, 21 day moving average.

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DISCLAIMER: The Information and data contained herein was obtained from sources deemed reliable. The accuracy and completeness are not guaranteed

Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

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