April 13, 2023

Markets:

Stock futures gained on Thursday after another report pointed to cooling inflation.

The March producer prices index, a measure of prices paid by companies and often a leading indicator of consumer inflation, declined by 0.5% month over month versus expectations for prices to be flat. Excluding food and energy, the core wholesale prices reading shed 0.1% month over month, much better than the 0.2% increase expected by economists polled by Dow Jones.

Wednesday’s release of March’s consumer price index report showed headline inflation pressures slowed last month. The CPI advanced just 0.1% month over month in March, less than the 0.1% estimate of economists. Consumer prices grew 5% on an annual basis, the smallest increase in nearly two years.

Traders’ sentiment turned in the afternoon following the release of minutes from the March Federal Open Market Committee meeting. In particular, the Fed expects the recent banking crisis to cause a mild recession later this year.

European stock markets opened mixed Thursday as investors digest key inflation data out of the U.S. released Wednesday.

The pan-European Stoxx 600 index was tentatively higher with a 0.2% uptick, and sectors were mostly in positive territory. Household goods led gains with a 1.8% jump, while oil and gas stocks made the biggest drop with a 0.4% downturn.

Portfolio:

We enter the new trading session holding set-ups in GATO, ONON, CLF, and AG. We stayed patient yesterday and sat on our hands while watching the markets swing. Tick bias had a large range yesterday and after the FOMC were released, we didn't see any large lots on either side of the trade go off. It was king of a weird close. Technically, we remain in pattern / trend line. Today's positive premarket has many scratching their heads. Turn on certain news channels and you would think the markets were crashing daily. Remember what we continue to state; the pain trade is higher.  Too many continue to call for a bearish market.  Market breaks and hold 4200 on the S&P, it's a move towards 4350. Break and hold that line, it's a MONSTER rally developing, and we will call that now.  We will gladly switch sentiment, but only if we break and hold 3890.  We've been pretty clear with that and gladly will trade the range utilizing both sides of the trade until one of the lines breaks. Be ready today, queue is active and could see a nice trigger or two.