State of OptionsPlayers Letter Released
Before diving into today’s news, don’t forget that the State of OptionsPlayers letter was released last night! It’s available for viewing in the news feed on the website and app. This letter provides a comprehensive update on our platform, recent accomplishments, and what’s ahead. Be sure to check it out!
Wall Street Awaits Employment Data
US stock futures are trading slightly higher this morning as investors brace for a week packed with crucial economic reports. At the forefront is Friday’s US employment report, which is expected to show 154,000 jobs added in December, keeping the unemployment rate steady at 4.2%.
November’s job growth rebounded with 227,000 new jobs following disruptions from strikes and hurricanes. However, December’s expected total would bring 2024’s annual job creation to just over 2.1 million—the lowest non-COVID-affected figure since 2019.
Investors are eyeing this data closely as it may influence the Federal Reserve’s decision on rate cuts. Currently, the Fed forecasts just two additional cuts in 2024, down from the four projected in September.
Shortened Trading Week and Key Data Ahead
It’s a shortened week as the New York Stock Exchange will be closed Thursday to honor former President Jimmy Carter. Leading up to the closure, the Job Openings and Labor Turnover Survey (Tuesday) and the ADP Employment Survey (Wednesday) will set the stage for the jobs report.
Last week’s market dip was driven by concerns over the Fed’s commitment to future rate cuts. This week’s data could offer critical insight into the strength of the US economy and the Fed’s next moves.
Eurozone Inflation in Focus
Germany will release its December inflation data today, followed by the Eurozone’s flash CPI report tomorrow. Analysts expect inflationary pressures to remain subdued, which could support the European Central Bank’s (ECB) plans to cut rates by 100 basis points in early 2025.
However, higher-than-expected energy prices in Spain’s inflation data have raised concerns about whether inflation is easing fast enough. A colder winter and elevated natural gas prices could further complicate the ECB’s policy outlook.
Political Turmoil in Canada
Reports suggest Canada’s Prime Minister Justin Trudeau may resign as early as today after nine years in office. If confirmed, this could accelerate calls for a quick election amidst growing pressure from the new Trump-led administration in the US, which is proposing fresh trade tariffs.
An early election could help stabilize Canada’s political landscape, with polls suggesting the ruling Liberal Party may face significant losses to the Conservatives. The Canadian dollar has strengthened slightly on this news, with USD/CAD trading down 0.6% at 1.4365.
Oil Prices Slip Ahead of Key Reports
Oil prices edged lower this morning, with WTI crude futures down 0.4% at $73.66 per barrel and Brent crude falling to $76.20.
Crude prices have seen two consecutive weeks of gains on optimism surrounding China’s economic stimulus plans and colder weather in the US and Europe, boosting demand for heating fuels. However, traders remain cautious ahead of this week’s US economic data and President-elect Trump’s emerging tariff plans, which could disrupt global trade.
NQ- Last week we had mentioned “For the shortened week, the focus will once again be how price trades versus 21700. … Of note, 22100 will be a significant pivot in the coming weeks, as this is a potential lower high in the making. With that in mind, sellers will be looking for weakness below 21700, with price targeting 21300 and 21000.” The week opened with price directly at 21700. This level was immediately rejected, marking the high for the week, with the weekly low being found right near our final downside target at 21000 before buyers stepped in.
For THIS shortened week (the market is closed on Thursday) the main focus is how price trades versus the 21550 level of interest. If sellers fail to defend this level, price can test 21700, 22100 (lower high pivot) and 22400 (prior all-time high zone). If sellers are successful in defending 21550, price will target 21300, 21000 (key support), and 20800.
Keep an eye on these developments, and don’t miss the insights shared in the State of OptionsPlayers letter. Let’s Stack Your Gains!
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