Pre-Market Brief

Good morning. Futures are moderately lower, sp -12pts, we're set to open at 2093. Metals are bouncing, Gold +$6. Oil is a little weak, -0.5%.. but will certainly be prone to turning positive in the afternoon.


sp'60min

sp'weekly

Summary

*Equity bulls need a weekly close of 2102.07 for a net weekly gain, that still looks very possible.
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**awaiting CPI data.. due 8.30am
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So.. we're set to open somewhat lower, but its opex today, and it'd be very surprising if we close significantly lower (as in <sp'2085).

The broader trend remains very strong - as especially seen in EU/Asia markets, with the sp'500 set to break new historic highs before end month.

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GE results: EPS (pre items*) 31 cents (33 cents previous year) vs market exp' of 30. Rev' was a major miss, $29.4bn vs market exp' of $34bn.

So... roughly $1.25 EPS a year, giving a PE of around 21... somewhat above the market average. Regardless, with a monstrous stock buy back of $50bn, along with the planned asset disposal of GE Capital (should raise around $25bn), the long term outlook appears fine.

*GE wrote off $16bn from GE capital.. so.. technically, a Q1 loss of $13.6bn... $1.35 a share. As ever.. the finer details are always important to consider.
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In early trading the stock is lower by -0.5% @ $27.15.

GE, daily

There is extremely strong support in the $27.00/26.50 zone. Under no fair outlook can I see GE sustainably trading <26.50 any time soon.

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Update from Oscar



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Have a good Friday
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8.31am CPI: 0.2%   vs market exp. 0.2%

Indexes remain weak, sp -11pts, metals cooling from earlier highs, Gold +$4


9.05am.. sp -12pts.. 2093...   

GE has already turned positive, +0.6%.. as the buyers are starting to appear in the low $27s.

Eyes on the USD

Having ramped last May - from DXY 78.93, to a March high of 100.71, the USD continues to look vulnerable to a significant retrace. A break into the 96s would break the rising trend, and offer 93/92 by June. Regardless of the exact retrace... broader upside to the 120s looks due later this year.


USD, weekly

USD, monthly

Summary

... I'm tired.. so this needs to be brief..
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To be clear..

I am seeking a USD retrace to the low 90s... then soaring to the 120s.... the latter of which seems possible this year.. if a retrace is complete by June/July.


The implications of DXY 120s

If we do see the 120s - especially if it occurred quickly, would surely result in a broader capital market shock. Oil and the precious metals would be under renewed severe downward pressure.

Even the broader equity market would be hit.. although whether it'd lead to the long awaited 10%+ correction is difficult to guess right now.

Anyway.. first things first.. lets see if we can get the DXY 96s next week.. and then fall for another month or two.
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Looking ahead

Friday will see another batch of corp' earnings, inc' the industrial giant.. GE

Econ-data - CPI, consumer sentiment, leading indicators.

It will be opex.. so expect some increasing chop into the weekly close.
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Goodnight from London

Daily Index Cycle update

US equity indexes closed a touch weak, sp -1.6pts @ 2104 (intra high 2111). The two leaders - Trans/R2K, settled u/c and -0.2% respectively. Near term outlook remains broadly bullish, with new historic highs due for all US indexes.. even the Nasdaq Comp'


sp'daily5

NYSE Comp'

Summary

*a fractional new historic high in the NYSE Comp'
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There is little to note, on what was a quiet day of minor price chop.

It would still seem the sp'500 will be trading in the 2120/30s within the near term. Whether the market can keep on pushing.. to the 2170/80s by June... difficult to say.

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Closing update from Riley



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a little more later...