The collision of global markets and social mood

Thursday, March 30, 2017

Thursday -- Confidence Meets Margin Debt

S&P E-mini Futures:
Hanging on to bounce highs.

More red creeping into global equity markets throughout Asia and Europe even as NQ (Nadsaq 100) futures hit new highs overnight.

Obtuse Headline Of The Day: Italy Finance Chief Says Le Pen Victory Would Add Permanent Risk

Perhaps now we know why there are so many Fed speakers lately: jawboning.

Two Fed presidents warned yesterday that markets and valuations appear "frothy."

Today we have Fed's Mester, Kaplan, Dudley, and Williams.

As George W. Bush would say, "some weird sh_t" going on in China.

China equities are having issues over real estate prospects, there have been sharp declines in newly-listed equities, and liquidity stress is rising due to a recent tightening trend by the PBoC.

The one-day loan rate on the Shanghai Stock Exchange piked as the PBOC skipped reverse-repurchase operations for the fifth day in a row, taking net withdrawals during the period to 290 billion yuan.

Bloomberg reported that "the overnight repurchase rate in Hong Kong’s offshore market surged as much as 44 points, the most since Jan. 25."

Sky high consumer confidence meets record margin debt.

"The Conference Board' consumer confidence index jumped to 125.6 in March, from 116.1 in February, one of the biggest one-month jumps in the history of the index, far higher than the consensus expectation of 114.1 among economists surveyed by MarketWatch. March's is the highest reading for the index in 16 years."

This, as margin debt hit an all-time high in February.

Margin debt has a history of peaking right before financial collapses like the ones in 2000 and 2008.

USD bounce mode.

More shifty-looking price action.

WTI crude up, NG down over 1%.

Gold, silver, and platinum (slightly) down. Palladium and copper green.

S&P Outlook:
With new overnight highs in the NQ, perhaps the odds increase that the recent lows were (iv) and we're in a fifth wave (v) to new highs. Too soon to tell, but possible.

Short term, in that we're in EOQ window dressing, the tiny gap at 2377.40 could make a great target if prices can stay above 2343.79 beforehand.

Then, any pullback would be of buying interest as long as 2322.25 held.

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