1. Canada CPI Comes In Higher — And It’s Getting Complicated
Canada’s March inflation number just landed this morning: 2.4% year over year, up sharply from 1.8% in February, but little bit below the consensus.
Take out gas prices, CPI is at 2.2%. The jump is mostly energy — up 13.1% on the month.
The Bank of Canada was already walking a fine line between slowing growth and sticky inflation. This data doesn’t make that any easier — a rate cut in June just got a little harder to justify.
But some silver lining: the CPI didn’t go as wild. And, bond yields actually dropped on this. However, it’s still very early in the game.
2. Hormuz Is Closed Again — and Oil Doesn’t Know What to Do
Oil has been whipsawing in a way that should make everyone uncomfortable.
WTI was trading near $113 at the recent highs, crashed to around $50.50 last week when Iran briefly signaled it would reopen the Strait, and is back near $86 as I write this.
Over the weekend, Iran fired on a tanker, and a container ship was hit by an unknown projectile. Then, U.S. seized Iranian tanker.
In case you forgot: the Strait of Hormuz carries roughly 20% of the world’s oil — if it goes dark, don’t be surprised if you see another leg higher. The ceasefire deadline is approaching, and these two sides are not exactly talking nicely.
Key thing to note when looking at oil price: $80-$82 is a big region, and sort of area where buyers seem to be sitting for now. A move below this range could bring some selling. On the upside, $95-100 is looking like a resistance zone for now.
3. Gold and Silver Taking a Breather?
Overnight Gold was trading much lower, but since morning buyers have come in. Once again, gold and silver are essentially looking like inverse oil. Do these metals take a breather if oil prices swing higher?
Silver – closed above its 50-day moving average on Friday. If it remains above it, buyers can come in. But know that $85-$95 is almost like a war zone – it needs to cross if you are looking for upside.
Gold is trading below its 50-day moving average. Worth watching closely. Near-term, a move above this moving average could bring buyers. But, the big level remains $5,600
Copper though seems like its on a launch pad and waiting for a liftoff. So much resilience above $6.00. I fear a near-term vertical move here. However, risks for downside are equally high.
4.S&P 500 Needs A Pullback? — After Last Week’s Record Highs
The S&P 500 and Nasdaq hit fresh all-time highs last week. It’s been one of those violent rallies that if you are against it, you likely lost sleep.
Relentless move to the upside since essentially March 31st.
Here’s the thing: great if you own stocks, but this rally went unchecked. Also, very few names dragged the indices higher. There are gaps that need to be taken care of…eventually.
Also, keep in mind: we are in the midst of an earnings season. Guidance is going to be important here. Financial world seems to think nothing is wrong – earnings estimates are still relatively unchanged. Sentiment towards stocks is bullish again.
Can stocks go higher? Absolutely – momentum says so. Trade the direction but having stops in place won’t hurt. What happens on the backend of it all is the big question – the war, inflation, etc.
5. Bitcoin, Dollar, Yield, & Beef
Bitcoin is holding up better than you’d expect, trading around $75,000. There’s something happening here.
The DXY sits near 98.70, still well below the important 100 level. The question right now: does the market buy this Iran dip again — as it has done every single time over the past month.
Yields cooling off. Has bond market called the end of the war?
Meat prices, especially beef, are getting into record high territory. Steaks are very high these days.