Good morning,
DXM0 97.980 -0.392 GCQ0 1743.3 +15.0 ESM0 3031.00 -7.00 CLN0 32.93 -0.78
This is my third attempt at this thing today. My first 2 efforts mysteriously blew up on me. Third times a charm??
Clearly in the spotlight today is President Trump making an announcement “with respect to China”, we believe at 2 PM EDT, following his daily press conference. The US has made well known its disapproval of China’s treatment of Hong Kong, and sanctions from the US towards China are expected. Markets have been on the defensive since yesterday afternoon when this was announced, as it potentially can increase the tensions in the US/China relationship. As we recall, the tensions surrounding the US/China trade negotiations were a major obstacle for the markets, and today’s actions possibly could create a major disruption to Phase 1 of the negotiated trade deal. Many markets will probably chop around ahead of this announcement, but a move following should be expected (or earlier if a portion of the plan gets leaked).
While the market waits for President Trump, Fed Chairman Powell is on the undercard. He is part of a panel at Princeton University, beginning at 11 AM EDT. There is a Q&A session following the panel discussion. The market has a pretty good handle on where Powell stands, in regards to the global economy dealing with the pandemic, but the Q&A always has the potential for some market moving comments.
Today is month end, which tends to increase price volatility, as profits are taken on positions or position window dressing takes place. A good example can be seen in the corn market, which had a strong short covering rally yesterday, as the fundamentals really didn’t change. Even this morning, with most markets exposed to Chinese demand on the defensive, corn remains a touch higher. Last Friday, the CFTC reports in the COT report that funds are carrying a record spec short in corn (291k). Similar story for wheat yesterday, which had a sharp rally. The funds are carrying a sizable short position in wheat as well. Wheat futures are also a couple of cents higher this morning.
As could be expected, gold and oil prices are acting as one might think, if there is an escalation between the US and China. Gold is up around $13 this morning, back to the safe haven status if there is a flee out of other assets. Oil is down almost $1, as clearly the tensions would be a detriment to the global economy which is already facing some serious issues from the pandemic.
Most markets will have some type of reaction following President Trump, positive or negative. That is the feature of the day, and I am going to sign off here, before this blows up on me again! Have a good weekend!
Technical Moving Averages:
Product 50 day 100 day 200 day
SN0 852.75 884.50 915.25
CN0 328.75 358.00 378.75
WN0 531.25 539.25 528.50
KWN0 477.75 479.00 464.50
MWN0 523.00 536.50 544.75
SMN0 296.9 301.1 307.0
BON0 26.62 28.95 30.30
CLN0 27.54 38.75 46.63
GCQ0 1694.2 1647.5 1583.3
LHQ0 60.720 71.140 79.555
LCQ0 93.105 100.635 105.815
KCN0 112.85 112.60 113.55
CCN0 2340 2527 2492
CTN0 54.84 61.52 63.57
SBN0 10.48 12.21 12.54
JON0 115.10 108.60 108.95
HGN0 230.35 246.80 257.30
HON0 97.95 130.41 158.21
XBN0 82.81 120.55 147.16
NGN0 2.012 2.055 2.207
Thanks,
Mike
Michael Clifford
141 W Jackson Boulevard
Ste 1065
Chicago, IL 60604
Trean Group, LLC
312-604-6404