Morning Reads


Todays Open Interest Change




Are central bank rate hikes coming to an end? It sure is Down Under - at least for now. The Reserve Bank of Australia is pausing its aggressive tightening cycle, holding rates on Tuesday for the first time in almost a year. Policymakers kept the official cash rate at 3.60%, taking a key timeout to size up the latest market happenings and economic developments.

More ammo if required: "The decision to hold interest rates steady this month provides the board with more time to assess the state of the economy and the outlook, in an environment of considerable uncertainty," explained Philip Lowe, Australia's central bank governor. "Some further tightening of monetary policy may well be needed."

While keeping the door open for a return to rate hikes, growth and stability concerns might soon overtake inflation threats in terms of central banks' top priorities. Other global banks have also been tightening at a rapid pace, with the Federal Reserve hiking interest rates by 475 basis points in nine successive meetings. In a new Seeking Alpha article, contributor Trading Ahead highlights What The Fed Really Wants, citing a "window of opportunity this year to cure the macroeconomic problem before it gets worse."

Go deeper: The financial turmoil erupting from the collapse of Silicon Valley Bank (OTC:SIVBQ), Credit Suisse (CS) and others hasn't helped the situation, as central banks attempt to engineer a soft landing to avoid a recession. Events in the banking system might also "contribute to significant tightening in credit conditions over time, and in principle, that means that monetary policy may have less work to do," Jerome Powell noted at the last FOMC meeting, possibly foreshadowing a coming decision. Whether the Fed ends up pulling the trigger on another 25 bps rate hike in May remains to be seen, but according to the CME's FedWatch Tool, those chances have been split down the middle for much of the past week. (3 comments)

The response

Comments from U.S. administration officials are pouring in following the surprise production cut from OPEC+. WTI crude oil futures (CL1:COM) held on to their gains overnight, climbing 1% to $81.24/bbl. It follows a nearly 5% gain on Monday, and while twelve of the top 15 S&P 500 gainers were seen in the oil and gas sector, not every analyst is seeing $100 oil as imminent. "It's not going to be as bad as you think," President Biden said before boarding Air Force One on a trip back to Washington, but check out the other remarks from Treasury Secretary Janet Yellen and National Security Council spokesman John Kirby. (51 comments)

Filing for bankruptcy

Aftershocks from SPAC craze that enveloped Wall Street in 2021 are continuing to be felt in the current market environment, with many investors steering clear of loss-making companies. The latest casualty is Virgin Orbit (VORB), which failed to secure more cash months after a historic mission from British soil ended in failure. Without another funding lifeline, Virgin Orbit filed for bankruptcy late Monday after laying off approximately 85% of its staff on March 30. The firm, which hasn't turned a profit as a public company, is down 25% premarket to $0.15/share, and said it would continue a sale process. (7 comments)

Worse than ’09?

Bank of America’s Sell Side Indicator, which measures equity allocation recommendations, is below its lows during the Financial Crisis. But as a contrarian indicator, that could be good news for bulls. For those looking for underappreciated stocks, this Raymond James thematic stock pick list has outperformed its benchmark by 30 percentage points since its inception. (51 comments)

Today's Markets

In Asia, Japan +0.4%. Hong Kong -0.7%. China -0.3%. India closed.
In Europe, at midday, London flat. Paris +0.6%. Frankfurt +0.9%.
Futures at 6:30, Dow +0.2%. S&P +0.3%. Nasdaq +0.4%. Crude +1% to $81.24. Gold -0.2% to $1997.40. Bitcoin flat at $28,295.
Ten-year Treasury Yield +4 bps to 3.47%

Today's Economic Calendar

10:00 Factory Orders
10:00 Job Openings and Labor Turnover Survey
6:45 PM Fed's Mester Speech

Companies reporting earnings today »

What else is happening...

Survey results: WSB community is bullish on the energy sector.

Disney's (DIS) Iger slams DeSantis moves as 'anti-business, anti-Florida.'

Paris votes to ban e-scooters, possibly setting precedent.

AMC slides, APE rises on filed settlement of stock conversion lawsuit.

Dogecoin (DOGE-USD) spikes after Twitter home button replaced with token's symbol.

Illumina (ILMN) prepared to divest GRAIL if FTC appeal fails.

FDA poised to authorize second Omicron COVID boosters for some.

Monster Beverage (MNST) expected to make a play for Bang energy drink.

Brookfield (BAM) to sell stake in one of world's largest wind farms.

DWAC on watch as Trump faces historic criminal charges in New York.

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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