1. It’s Fed Week
While there’s a lot of war and peace deal noise out there, don’t forget that this is also Federal Reserve rate decision week.
Wednesday, 2:00 p.m. EST — the Fed will likely hold rates, but the statement and press conference should provide more insight.
Also keep in mind that the day before a Fed decision, the market tends to be relatively flat. After the announcement, you’ll usually get a move, but many times, that initial move is wrong.
The real trend often shows up on Thursday and Friday.
2. War Headlines Continue to Drive Oil
On the war…
Apparently, Trump is giving peace a chance by holding off on further bombing. There’s also a lot of noise about the U.S. running low on defensive weapons.
Meanwhile, Ukraine has hit an Iranian ship.
On top of that, the Houthis in Yemen are targeting Saudi oil infrastructure.
WTI crude oil is retesting its 50-day moving average. Let’s see whether it holds or breaks.
There are plenty of headlines here that could create major whiplashes.
3. Gold Is Trying to Hold On
Bond yields are easing a little, but the U.S. dollar remains elevated.
That’s putting some pressure on gold and silver.
For gold, $4,100 remains a major level. It’s having a hard time staying above it.
For silver, $60 is becoming a resistance zone.
It must also be said that, for now, sellers don’t appear to be as active. But let’s see. We are cautiously optimistic for now. It all changes if gold drops below $4,000.
4. Chip Stocks Face a New Threat
China’s CXMT Corp. raised money through an IPO, and the stock surged 466%. That’s raising concerns among other chipmakers and memory companies that CXMT could pressure industry margins. The company raised capital to mass-produce memory wafers.
Meanwhile, the S&P 500 has now posted two consecutive closes below its 50-day moving average. Will today make it three? Don’t be surprised if more selling follows.
Over the past few years, breaks below this moving average have often led to meaningful downside. If the index recovers above the 50-day moving average, the upside target remains 7,600.
5. Canada, Mining & Japan
The Canadian dollar continues to weaken amid ongoing tariff noise. That’s not good for sentiment.
That said, as we’ve said before, this is probably the worst of Canada’s pain. The bigger concern is stagnant economic growth over a long period. That would hurt the most.
It also seems like mining companies are entering another wave of acquisitions. There is a lot of cash flow in the sector, and production costs remain low relative to current commodity prices. Just know what you own.
Meanwhile, the Japanese yen remains at multi-decade lows.