Home › Market News › Commodities, Bitcoin, and Geopolitical Risk To Watch This Week
The Economic Calendar:
MONDAY: Raphael Bostic Speaks (7:45a CT), Michael Barr Speaks (8:00a CT), Christopher Waller Speaks (8:00a CT), Philip Jefferson Speaks (9:30a CT), Raphael Bostic Speaks (6:00p CT)
TUESDAY: Redbook (7:55a CST), Thomas Barkin Speaks (8:00a CT), Christopher Waller Speaks (8:00a CT), John Williams Speaks (8:05a CT), Raphael Bostic Speaks (8:10a CT), Michael Barr Speaks (10:45a CT)
WEDNESDAY: MBA Morgage Applications (6:00a CST), Existing Home Sales (9:00a CT), EIA Petroleum Status Report (9:30a CT), 20-Year Bond Auction (12:00p CT), FOMC Minutes (1:00p CT)
THURSDAY: Building Permits (7:00a CT), Chicago Fed National Activity Index (7:30a CT), Jobless Claims (7:30a CT), S&P Global Composite PMI Flash (8:45a CT), New Home Sales (9:00a CT), EIA Natural Gas Report (9:30a CT), Kansas Fed Manufacturing Index (10:00a CT), Raphael Bostic Speaks (2:00p CT)
FRIDAY: Durable Goods (7:30a CT), Christopher Waller Speaks (8:35a CT), University of Michigan Consumer Sentiment (9:00a CT), Baker Hughes Rig Count (12:00p CT)
Key Events:
A buoyant mood prevailed in stocks last week, culminating in record closes for major indices. For the week, the S&P 500 gained +1.65%, and Nasdaq 100 was up by +2.19%.
The catalyst was Wednesday’s release of the Consumer Price Index (CPI) for April, which surprised the downside. Headline inflation rose slower than anticipated, while core CPI, a measure that excludes volatile food and energy prices, registered its first decline since October 2023.
Even the meme stocks are yowling! Meanwhile, meme stock leader “Roaring Kitty” reignited the fire under GameStop and AMC, and other short-interest stocks. Meme stocks are mostly considered to have inferior fundamentals.
The CPI data rekindled investor optimism regarding the Federal Reserve’s monetary policy trajectory. Encouraged by the prospect of a dovish pivot, investors piled into equities, pushing the benchmark S&P 500 above the psychologically significant 5,300 level for the first time.
The FOMC meeting minutes will be released this Wednesday. At the FOMC May meeting, the Fed left rates unchanged at 5.25-5.50%, as expected.
Fed speakers were leaning slightly hawkish last week, coming from speakers with a known bias. However, even Fed officials like John Williams stated that while it was certainly a positive development after the disappointing inflation data, he would not read too much into one release.
Still, Chair Powell ruled out the prospect of near-term rate hikes, instead suggesting that the Committee could keep rates at current levels for as long as needed to bring inflation back down.
The Fed Fund futures are pricing the highest probability of a 25 basis point rate cut at the September meeting. Expectations are for no rate change at the June and July meetings.
Source: CME Fedwatch
Copper’s blistering ascent shows no immediate signs of abating, with the price exhibiting parabolic tendencies.
However, a note of caution is warranted. The Relative Strength Index (RSI) is again approaching extreme levels, historically a sign of potential overbought conditions. Additionally, the 50-day moving average remains significantly lower, suggesting the current uptrend may be losing momentum.
While the long-term outlook for copper remains positive, particularly with factors like decarbonization, electric vehicles, and surging renewable energy demand, chasing this rally in the short term appears less attractive.
We would advise waiting for a more favorable entry point.
The psychologically important $30 per ounce level has been breached in silver.
July silver futures skyrocketed this week by 9.3% to settle at $31.26 per ounce, marking the highest closing price for the most active contract since February 2013.
This surge can be attributed to a key economic data point released last Wednesday: the U.S. Consumer Price Index (CPI) report. The data revealed a slowdown in the inflation rate, fueling expectations for a shift in Fed policy.
A continuously fading war risk premium and signs that regional oil markets look well supplied prompted traders to slash their bullish bets on crude oil at the fastest pace in over a year last week.
The net long position—the difference between bullish and bearish bets—dropped to a three-month low as money managers liquidated long positions.
In early April, analysts were not ruling out a run to $100 oil, but they noted that it would take further escalation in the Middle East with a direct threat to oil supply from the region for oil prices to spike over $100.
Here’s a good view of the geopolitical landscape. It’s very hard to time geopolitical trades. We like cybersecurity and defense industries and the commodity sector for this risk.
Source: Academy Securities
CME Group announces a new Bitcoin spot trading plan to take on Coinbase.
The world’s leading derivatives exchange, the Chicago Mercantile Exchange Group (CME), is moving to integrate Bitcoin spot trading into its product mix.
The buzz among traders is very supportive since many traders and brokers are already connected to the CME platform. It would really be beneficial if CME expanded the crypto to other tokens and altcoins.
CME has hosted trading in bitcoin futures since 2017, making it one of the first exchanges to trade Bitcoin.
Traders are cautiously returning to Chinese stocks, as Morgan Stanley analysts see covering of short or underweight positions.
The key driver has been fueled by hopes of economic stimulus, government support, and economic improvement.
There are some headwinds due to renewed U.S. trade tariff restrictions on key industries.
After the recent rebound, the analysts recommend a selective approach to investing in China.
We are looking for trades on pullbacks.
These performance charts track the daily, weekly, monthly, and yearly changes of various asset classes, including some of the most popular and liquid markets available to traders.
