Looking at the markets today
- Gold down up $28.70 or 1.59% at $1842.05
- Spot silver is up $0.72 or 3.02% at $24.16
- WTI crude oil (February) is trading at $86.61.
- Bitcoin is trading fairly steady $41,690
US yields moved lower today with the 10 year down -3.2 basis points and the 30 year down -3.7 basis points, but that did not stop stocks from also moving lower and
closing at the lows.
Looking at the yield curve, the 2– 10 year spread narrowed to 80.3 basis points from 82.8 basis points yesterday. The US treasury successfully auctioned off 20 billion of 20 year notes at 2.21%. That was 1.5 basis points below the WI level at the time of the auction. Strong investor demand from over seas highlighted the breakdown of the results.
The lower yields and strong auction did not help US equities . In the US stock market, the S&P and NASDAQ are lower for the second consecutive day while the Dow industrial average is down for the third consecutive day. Moreover, each of the major indices closed further away from key daily moving averages. For the S&P and Dow, the indices are closing below their 100 day moving averages. For the NASDAQ index, it is closing below its 200 day moving average for the second consecutive day. The NASDAQ index as not closed two consecutive days below its 200 day moving average since early April 2020. All the closes are bearish tilts for each of those indices.
Looking at the major indices all lower closing near their lows:
- Dow industrial average fell -339.82 points or -0.96% at 35028.64
- S&P index fell -44.32 points or -0.97% at 4532.70
- NASDAQ index felt -166.63 points or -1.15% at 14340.27
- Russell 2000 felt -33.44 points or -1.6% at 2062.78
The economic calendar was light today in the US with building permits and housing starts for December the only economic release. Both building permits and housing starts were near recent cycle highs as supply still remains out of whack versus demand (in favor of the sellers) despite the run up in prices and yields (at least in December).
In Canada, CPI year and year came in at 4.8% which was the highest since 1991. However, the month-to-month figure was down -0.1% which was the first decline since December 2020
Crude oil continued its run to the upside with the February contract trading trading up to $87.90, a new high going back seven years. However, it is trading nearer the lows at $86.45. The low reached $85.78 today
In the forex, the AUD and NZD are the strongest of the majors, while the USD is ending the weakest. That sort of makes sense looking at the US rates moves today, but the equity decline does not necessarily jive with the “risk on” theme in the forex (normally).
The AUDUSD moved up in the London morning session and in doing so extended above its 200 and 100 hour moving averages. However into the close, the…
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