The Good, the Crude, and the Bullion
Economic Announcements:
- 8:30 AM : Unemployment
- 8:30 AM : Housing Starts
- 8:30 AM : Building Permits
- 8:30 AM : Trade Balance
Earnings Reports:
Analysis:
VPOC: 6779
VVA: 6754 – 6789
High-Low: 6735.25-6822.50
PP: 6785
Open: 6741.753 (Zone 2)
Vix: 24.87
S&P 500 Trend: Overall sentiment neutral 🟠 to bearish 🔴
Yesterday morning, the S&P 500 repeated the previous day’s scenario with a consolidation between the 6771-6777 support zone and the 6815-6830 resistance zone, testing both ends.
The CPI data triggered very little market reaction, as the figures were perfectly in line with expectations and confirmed that inflation remains “sticky.” At the US open, buyers attempted to break through the 6815-6830 resistance, but sellers regained control, blocking the attempt. For their part, sellers managed to break the 6771-6777 support (and the VVAL-1 at 6775), leaving the price to navigate between this support-turned-resistance and a support zone established at 6750-6754. The index closed at 6777.
This morning, the S&P 500 opened in Zone 2 at 6741, below the previous day’s value area. Sellers have taken control and pushed prices down to the 6715 support zone, which they are currently testing. Ship attacks in the Strait of Hormuz and persistent inflation have not helped investor sentiment.
Option levels show a large Put wall at 6600, which could constitute the lower bound for the day, as well as a smaller level at 6700. Call levels are located at 6800, 6850, and 6900, though to a lesser extent.
Today at 8:30 AM, we will have unemployment data, housing starts, building permits, and the trade balance. Adobe will also report earnings post-close, along with Dollar General in the pre-market.
Scenario 1 🟡: Upon re-entering the previous day’s value area and a rejection at the VVAH-1 at 6789, the price could consolidate within the value area and the 6715-6720 support zone.
Scenario 2 🔴: Upon a break of the 6715-6720 support zone, the price could continue its decline and target 6700, followed by the 6625-6640 support zone, and in the extreme, 6600.
Scenario 3 🟢: Upon re-entering the previous day’s value area and breaking the VVAH-1 at 6789, confirmed by a break of the previous day’s high at 6822, the price could target 6860, then the 6815-6830 resistance zone, and in the extreme, 6883-6900.
Zones of Interest:
- 6883-6900 (Major resistance zone)
- 6857-6866 (Resistance zone)
- 6815-6830 (Resistance Zone)
- 6789 (VVAH-1)
- 6771-6777 (Resistance zone)
- 6754 (VVAL-1)
- 6715-6720 (Support Zone)
- 6683-6688 (Support Zone)
- 6640-6625 (Support Zone)
- 6600 (Major Put zone)
60-second Chrono
Stock Markets:
The S&P 500 and the Dow Jones recorded declines, while the Nasdaq rose slightly. The decline in the indices is attributed to the escalation of hostilities related to the war between the United States, Israel, and Iran. The S&P 500 decreased by 0.08% to reach 6,775.80, and the Dow fell by 0.61% to 47,417.27.
Bond Yields and Inflation:
Treasury yields rose due to inflation fears fueled by rising oil prices, which also delayed expectations for interest rate cuts by the Federal Reserve. The Consumer Price Index (CPI) rose by 0.3% in February, with concerns about the future impact of Middle East conflicts on prices.
Commodities:
Brent crude oil prices exceeded $100 due to the escalation of Iranian attacks on tankers and maritime infrastructure in the Gulf, causing fears of major supply disruptions.
Upcoming Economic Events:
Key economic reports are expected, notably on housing starts and unemployment claims, which should provide insight into the health of the US economy.
Impact on Companies:
Several companies, including Adobe and Dollar General, are scheduled to publish their results, and investors are attentive to comments on consumption and annual forecasts.
Market Analysis:
Analysts emphasize that markets are waiting for clear signals regarding the impact of energy prices on the consumer and the overall economy, with increased volatility due to news related to the conflict in the Middle East.
Macro
CPI: Inflation stabilizes and aligns perfectly with expectations
Headline and Core Consumer Price Index (CPI) (Feb.):
CPI (Monthly)
Actual: 0.3%
Forecast: 0.3%
Previous: 0.2%
CPI (Annual)
Actual: 2.4%
Forecast: 2.4%
Previous: 2.4%
Core CPI (Monthly)
Actual: 0.2%
Forecast: 0.2%
Previous: 0.3%
Core CPI (Annual)
Actual: 2.5%
Forecast: 2.5%
Previous: 2.5%
-> This is a release that stands out for its lack of surprises. Absolutely all figures, whether headline or “Core” inflation, came in exactly on analyst consensus.
Summary
Zero surprises, markets breathe a sigh of relief: The market hates uncertainty. Figures exactly in line with consensus are often well-received by equity investors, as they remove the risk of a sudden inflationary shock. It is a “no news is good news” scenario, preserving the stability of stock indices in the immediate term.
Total comfort for the Fed’s course: These statistics fully justify the Federal Reserve’s recent adoption of a cautious and patient approach. Inflation is close to the 2% target but remains “sticky.” The Fed therefore feels no urgency to cut rates, nor a need to raise them. The monetary status quo is reinforced.
Energy Market: Inventories up, but decline blocked by Iranian risk
Crude Oil Inventories (United States):
- Actual: 3.824M (Red = theoretically bearish impact)
- Forecast: 2.800M
- Previous: 3.475M
Cushing, Oklahoma Crude Inventories:
- Actual: 0.117M
- Previous: 1.564M
-> A bearish statistic neutralized by geopolitics. US inventories are increasing more than expected, signaling a local short-term oversupply. However, tensions with Iran are imposing a strong risk premium on the market: the fear of a supply disruption in the Middle East creates a floor and prevents prices from collapsing.
Fundamentals are taking a backseat to geopolitics (Iran).
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