evening wrap, may 7

market vibes

“It is often said that second thoughts are best. So they are in matters of judgment but not in matters of conscience.” John Henry Newmwn 1866

Occassionaly empty hours pass quickly and very little happened in the NY session after the 2 PM FOMC decision that had not already happened prior to it. Although … not to see a day go by without and EO… Trump rescinded global curbs on chips imposed by Biden, which was briefly positive for stocks.

Checking the markets

Gold was down $40 at 7 AM, and it was down $48.00 at 4:30 PM EDT. Volume was unusually high. I would expect the TWD/gold longs entering in Asia above $3,400 to be the first to manage risk if gold fizzles.

The down time waiting for Powell to do nothing and say nothing about doing nothing, took a lot of tension out of the board. Silver fell $0.80 in quiet trading.

Stocks were both sides of unchanged in very choppy trading, but indexes ended a few ticks higher despite an 8% drop in Alphabet. Apple has been exploring integration of its own Apple Intelligence platform into its products and said they are considering their own AI-powered search feature in their Safari browser. Which would be bad for Google.

It has been my experience that Google is the least user friendly and weakest of several AI products I have tried. That may have something to with being a writer who needs to verify sources for data and color. The best by far for that is Grok. I get 10 sources for any inquiry without even asking. And I can leverage them if I want to go deeper. If you ask the same question more than once or twice on Google it defaults to its advertisers! But I digresss…

I had the feeling there was some cosmetic buying after Powell left the podium. Or CTAs may have withheld their orders for the press conference and twapped them at an accelerated rate in the final 30 minutes. In the end, prices closed +/- where they settled last night and opened this morning.

July WTI was down $1.13 at 4:30 PM. Prices were higher in London pre-NY but turned lower when Nymex opened and trended quietly down through the session. DOE stats were a non-event.

We have plenty of oil, full stop. Demand is better than last week, but not great. Gasoline cracks were a little weaker, and heat cracks were quite weak.

Dec Red Dec barely managed a rally with flat prices $2.50 higher yesterday and gave it all back today.

In other markets, bonds and the dollar rallied. Bitcoin held its gains.

my vibe

Powell’s demeanor is always informative. He can be sour and cranky or jocular and chatty. Today he was tolerant and weary. The same question was asked over and over, to which he replied, “I don’t know.” He didn’t attempt to color his uncertainty, and he used the word uncertainty interchangeably with “I don’t know.” The Q&A today was understandably brief.

Scott Bessent replied to a question in an interview on Tuesday evening about clarity. He said, “The president is using a form of strategic uncertainty.” He may have coined it in the moment. At any rate, I think it will stick.

love this

Night all…

JJ

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Charts and data CQG and Bloomberg

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