Big tech names lifted the indexes on Monday after a slow start to the week.  But unfortunately, the worries of pending rate increases and a pesky bond yield inversion signaling recession kept most market sectors subdued.  This morning we turn our attention to International Trade figures and several Fed speakers likely to sound hawkish as rents, food, and energy continue to inflate.  I would not be surprised to see some price volatility if Fed members talk more aggressively to fight rising inflation.

Asian markets closed green across the board, with tech leading the way in Hong Kong as oil prices surge higher.   However, European markets see red across the board with modest bearishness with global sentiment in decline.  Ahead of trade numbers and a talkative Fed, U.S. futures point to a modestly bearish open, with brent crude again topping 108 a barrel.

Economic Calendar

Earnings Calendar

We have less than 30 companies on the Tuesday earnings calendar, most of them unconfirmed.  Notable reports include AYI, ARRY, LNDC, LNN, NG, & SGH.

News & Technicals’

“Do you want an edit button?” Musk asked in a poll that gives Twitter users the option to vote “yes” or “no.”  Twitter CEO Parag Agrawal retweeted Musk and urged people to “vote carefully” as the consequences “will be important.”  Musk posted the poll just hours after his 9.2% stake in Twitter was made public.  Under sanctions put in place after Russia invaded Ukraine on Feb. 24, foreign currency reserves held by the Russian central bank at U.S. financial institutions were frozen.  But, according to a U.S. Treasury spokesperson, on Monday, as the largest of the payments came due, including a $552.4 million principal payment on a maturing bond, the U.S. government decided to cut off Moscow’s access to the frozen funds.  After two years of the coronavirus pandemic, a recession, and rapid recovery, Americans are worried that the economy may swiftly decline once again.  Some 81% of adults said they think the U.S. economy will likely experience a recession in 2022.   According to new data, Manhattan real-estate sales topped $7 billion in the first quarter, marking the strongest-ever start to a year as the market shows no signs of slowing.  In addition, the average price of a Manhattan apartment jumped 19% over the previous year’s period to $2,042,113.  Rising interest rates also have less impact on wealthy buyers, who dominate the Manhattan market.  As rates go up, they pay more cash.  Treasury yields rose in early Tuesday trading, with the 2-year at 2.461%, the 5-year up to  2.5924%, the 10-year traded at 2.4413%, and the 30-year rose to 2.499%.  The inversion continues, and recession fears linger as a result.

Monday trading has a slow start, but the bulls found inspiration in big tech names, lifting the indexes as volume remained relatively low.  However, worries of an aggressively hawkish combined with a bond yield inversion kept the activity subdued in most market sectors.  Brent crude prices pushed higher overnight as Europe, and the U.S. issued more sanctions against Russia.  Russia is not demanding payment of oil and gas in rubles and has made a move to somewhat back their currency with gold.  Russia and China continue to build stockpiles of precious metals.  Before the market opens, we get a reading on International Trade that continues to run in an alarming deficit, but the market continues to ignore it. 

Trade Wisley,

Doug