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S&P runs away from 100D MA. Bullish. Nasdaq tests 100D MA and backs off. Resistance holds

  
Analysis, US Market

The major US  indices IndicesStock market indices represents an index that measures a particular stock market or a segment of the stock market. These instruments are important i…Read this Term are closing higher led by the Nasdaq and Russell 2000 and flow of funds head into risk.

  • Apple is up for the 11th consecutive day
  • S&P closes above it’s 100 day MA for the 2nd consecutive day
  • Dow closes above its 100 day MA for the 1st time since February 9th. 100 day MA is at 35090.27
  • Nasdaq index moved up and tested the 100 day MA at 14646.86 level but found sellers on the first look.
  • Real estate +2.9%, Technology +2.1% and Communication +1.7% were the largest gaining sectors today
  • Energy -0.3%, Financials +0.2% and Health Care +0.6% were the largest lagging sectors today

The final numbers are showing:

  • Dow industrial average up 338.30 points or 0.97% at 35294.18
  • S&P index up 56.10 points or 1.23% at 4631.61
  • NASDAQ index up 264.74 points or 1.84% at 14619.65
  • Russell 2000 up 55.03 points or 2.65% at 2133.09

European major indices closed with solid gains German DAX +2.8%. France’s CAC up over 3%

  
Analysis, Global Indices
  • German DAX, +2.79%
  • France’s CAC, +3.08%
  • UK’s FTSE 100, +0.86%
  • Spain’s Ibex, +2.98%
  • Italy’s FTSE MIB, +2.41%

In the European debt market, the benchmark 10 year yields are closing the session with mixed results after rising earlier in the day.

European 10 year yields
European 10 year yields

The German 10 year yield moved to a cycle high of 0.741%. That was the highest level since February 2018. Looking at the daily chart, the yield is up from a swing low of -0.099% back on March 7. At the time, the yield tested its 100 day moving average and found traders willing to lean against the yield level. The spike higher since then has taken the price up close to 84 basis points.

BOJ Summary of Opinions at the Monetary Policy Meeting on March 17 and 18, 2022

  
  Analysis

The summary precedes the full minutes of the meeting by many, many weeks.

Link to the doc is here (PDF)

No sign in the summary that the BOJ will be diverting from its ultra-loose monetary policy any time soon.

Headlines via Reuters:

  • rising  inflation InflationInflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or cou…Read this Term could weigh on overseas economic growth
  • worried of risk uncertainty over Ukraine developments could weigh on japan’s economy
  • rising raw material and food costs, geo-political risks could inflict strong downward pressure on economy
  • Japan’s consumer inflation likely to accelerate clearly from April, May move around 2% for some time
  • inflationary pressure to heighten on improvements in output gap, rising inflation expectations
  • consumer inflation likely to hover around 2% in 1st half of fiscal 2022 but may undershoot if commodity prices turn down
  • more companies appear to be passing on higher costs to consumers
  • surging imported raw material costs unlikely to lead to sustained rise in consumer inflation
  • BOJ must maintain monetary easing as japan unlikely to see inflation continuously exceed 2%
  • BOJ must focus not on fx, commodity price moves themselves, but how they could affect economy, prices
  • BOJ must respond flexibly without hesitation if achievement of 2% inflation comes under threat as rising raw material prices could hurt economy, prices

After the release yen is barely moved. Meanwhile the yield on the 10yr JGB is sticky at 0.25%

Kremlin says would use nuclear weapons if there was a threat to the existence of the state

  
  Analysis

Kremlin spokesman Peskov speaking in an interview with PBS

  • says Biden’s remarks on Putin remaining in power were alarming and a personal insult
  • says Russia would use nuclear weapons only when there is a ‘threat to the existence of the state’
  • Russia does not accept the jurisdiction of the International Criminal Court

Putin took Biden’s remarks as a ‘personal insult’. Putin is shelling civilians, hospitals, women, children and he takes offence at a comment. Whiny little bitch isn’t he?

US stocks finish strong as the rebound continues

  
Analysis, US Market

SPX daily

It’s been a one-way trade in US stocks for the past two weeks in an impressive rebound from the March lows.

Technicans will love the S&P 500 chart for a long time with that series of higher lows and/or double bottom followed by a spring higher. Resistance though, is nearby, and inflation data is coming Thursday.

  • S&P 500 +0.7%
  • Nasdaq +1.3%
  • DJIA +0.3%
  • Russell 2000 -0.2%

European major indices close higher. UK FTSE 100 unchanged

  
Analysis, Global Indices

The major European stock indices are closing the day higher although the UK FTSE 100 is unchanged on the day.

A look at the provisional closes shows:

  • German DAX, +1.15%
  • France’s CAC, +0.9%
  • UK’s FTSE 100 unchanged
  • Spain’s Ibex, +0.7%
  • Italy’s FTSE MIB +0.9%

In other markets as European/London traders look to exit:

  • Spot  gold  is down $22.45 or -1.15% at $1935.15
  • WTI crude oil futures are trading at $106.64. That’s down six dollars or -5.34%. The price is well off its intraday low of $104.50
  • Bitcoin is trading at $47,567. That is off its intraday high of $47,900. The 200 day moving average comes in at $48,297 and is a key upside target going forward.

BOJ makes second offer today to buy unlimited amount of 10-year JGBs at 0.25%

  
  Analysis

The Japanese central bank is stepping in hard to try and defend its implicit yield cap for the second time this year. Before today, the last time the BOJ intervened was back on 10 February.

The issue with intervening too often here is that it loses its perceived “effectiveness”. It sort of draws untoward attention to the current situation with the yen and that could cause the currency to weaken further.

Also, considering the surge in bond yields globally, it will be a tough ask for the BOJ to keep defending the 0.25% level so we’ll see.

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