CoT Speculators Raise Dow Net Sell Bias Notably to 74%

Indices:

- U.S. equity index futures are in clear retreat gapping lower as oil prices climb following President Trump’s announcement regarding the naval blockade of the Strait of Hormuz, and follows a week where the S&P 500 (w/w +3.5% to 6,816), Nasdaq 100 (w/w +4% to 25,116), Dow 30 (w/w +3.1% to 47,916), and Russell 2000 (w/w +4.1% to 2,630) all enjoyed sizable gains on expectations that there would be a resolution to the conflict, with the latest updates hurting risk appetite instead; Treasury yields move higher across the curve following the latest update, and market pricing (CME’s FedWatch) expects a hold out of the Fed this year on rates with minority likelihoods of a reduction dwindling further

Stocks:

- Shares of Nvidia (NASDAQ:NVDA) (+2.6%) closed higher on Friday in a session that saw decent gains for semiconductor and AI infrastructure names, with Marvell (NASDAQ:MRVL) (+7.2%), Broadcom (NASDAQ:AVGO) (+4.7%), Advanced Micro Devices (NASDAQ:AMD) (+3.6%), and Taiwan Semiconductor Manufacturing (NYSE:TSM) (+1.4%) all advancing with the latter reporting record revenue that was up 35% y/y, and even larger gains for Coherent (+8.2%) and CoreWeave (+10.9%), the latter surging on its multi-year Anthropic partnership to support its Claude model

- Memory and storage names stayed bid with Western Digital (NASDAQ:WDC) (+1.6%) higher as Mizuho stuck to its outperform rating on the sphere and hiked its price target on several names

- Software remained under pressure with ServiceNow (NYSE:NOW) (-7.6%) dropping sharply after a downgrade from UBS to neutral from buy, and broader weakness hit cybersecurity names as well including Palo Alto Networks Inc (NASDAQ:PANW) (-6.7%), CrowdStrike (NASDAQ:CRWD) (-4%), Zscaler (NASDAQ:ZS) (-3.4%), and Akamai Technologies (-16.7%)

- Tough session for shares of Nike (NYSE:NKE) (-3.1%) suffering a downgrade out of Piper Sandler to neutral and a price target reduction to go along with it, with even larger losses for DocuSign (NASDAQ:DOCU) (-5.8%) cut by Citi to neutral and its price target cut in half

- Meme stock movers: Kohl’s (-3.1%), GoPro (+3.7%)

- Most crypto stocks tracked cryptocurrencies lower and based on weekend action are expected to open lower: Coinbase (-0.7%), MicroStrategy (-0.2%), Mara Holdings (-1.3%), Gemini Space Station (-9.3%), Bullish (+0.3%)

Commodities:

- Gold started over 1% lower, but a significant chunk of that gap got filled as it got back above $4,700, with larger percentage losses this morning for silver even with its partial recovery to $74

- Oil prices (WTI) surge briefly reaching $99 following a weekend escalation in U.S.–Iran tensions, as Washington moves to implement a naval blockade of ships entering or leaving Iranian ports after failed peace talks, raising concerns over a major supply disruption through the Strait of Hormuz; weekly rig count data out of Baker Hughes shows number of US oil rigs rising to 411 from 409

FX/Central Banks/Crypto:

- Bitcoin hovers near $71K after a tough Sunday where it fell over 3% as the risk-off news and dollar strength hurt the crypto sphere, with a similar story playing out for Ether, breaking beneath $2.2K

- US Dollar Index gaps higher, reaching the upper 98 handle as both energy-exposed and risk-related currencies take a hit, with USD/JPY not far off the 160 ‘red line.’

- Federal Reserve’s Daly said that the economy is fundamentally solid, but an oil shock would mean that getting inflation down would take longer, and if oil prices come back down, then a rate cut wouldn’t be out of the question

Capital.com Client Sentiment (w/w):

- Indices: Remain majority long in all U.S. equity indices in the report but are on the verge of shifting in the Nasdaq (slight buy 51% from 55% at the start of last week) while moving further into heavy buy territory in the Dow (67% from 63%); elsewhere reached heavy long in both DAX (67% from 64%) and FTSE (69% from 56%) while moved closer to the middle in the Nikkei (55% from 71%) after an outperforming week

- Commodities: Back in extreme buy territory in gold (79% at the start of this week from 76% a week ago) while trim their exposure slightly but remain extreme long in silver (81% from 84%); WTI experiences a shift in sentiment from a majority short 57% to a heavy buy 68% as shorts closed out on the pullback and longs entered

- FX: Shifted in EUR/USD (from a majority long 56% last Monday to a majority short 57%), GBP/USD (from a majority long 61% to a slight sell 54%), AUD/USD (from a slight buy 52% to a slight sell 54%), and GBP/JPY (from a majority long 58% to a majority short 58%)

CoT Speculator Sentiment (w/w):

- Indices: Generally hold on their net sell bias in the S&P (slight short 54%) and Russell (short 55% from 56%), raise their net sell bias notably in the Dow (from 62% to a heavy sell 74%), and trim their net buy sentiment in the Nasdaq (54% from 57%)

- Commodities: Extreme buy and little changed in gold (81% from 82%) and silver (78%) while opt to remain heavy buy in WTI (65%)

- FX: Shifts from the middle in EUR (to a slight sell 51%), raise their heavy short sentiment in GBP (to a heavier 69% from 67%), reduce their heavy long bias in AUD (from 67% to 70%), and reach heavy sell territory in JPY (67% from 64%; i.e., heavy buy USD/JPY 67% from a previous 64%)

Data:

- U.S. March CPI shows a clear jump in the headline figures but matches forecast both y/y at 3.3% from 2.4% prior and m/m at 0.9%, though core CPI was lighter than anticipated rising a notch to 2.6% with m/m growth still at 0.2%; UoM’s preliminary consumer sentiment for April drops to 47.6 well below expectations and a record low, with inflation expectations surging for the one-year print to 4.8% from 3.8% with a higher reading for the five-year as well at 3.4% from 3.2%; February factory orders come in flat again; March Treasury budget deficit narrows to -$164bn from -$308bn prior

Today:

- U.S. existing home sales (6pm Dubai time), bill auctions

o   Earnings from Goldman Sachs and Fastenal

This Week:

- U.S. PPI tomorrow, trade pricing data on Wednesday, and the weekly claims on Thursday, with plenty of FOMC members speaking throughout the week

o   Earnings from JPMorgan (NYSE:JPM), Citigroup (NYSE:C), Wells Fargo (NYSE:WFC), and Johnson & Johnson (NYSE:JNJ) tomorrow, Bank of America (NYSE:BAC) and Morgan Stanley (NYSE:MS) on Wednesday, Netflix and PepsiCo on Thursday Wednesday, and State Street on Friday