Nasdaq Climbs Post-Nvidia Despite Rising Treasury Yields
Nasdaq Climbs Post-Nvidia Despite Rising Treasury Yields
Also, 10-year T-note, silver, crude oil, and Japanese yen futures
Nasdaq-100 E-mini futures (/NQ): +0.40%
10-year T-note futures (/ZN): -0.29%
Silver futures (/SI): -2.80%
Crude oil futures (/CL): +0.64%
Japanese yen futures (/6J): -0.32%
Equity markets mostly opened higher Thursday morning, but technology stocks were the leaders, propelled by yesterday’s earnings announcement from Nvidia.
Despite the gains in tech, the S&P 500 quickly trimmed strength after the opening bell to trade unchanged in the first 30 minutes of trading. Elsewhere, Treasury yields rose, and crude oil gained alongside natural gas. Precious metals fell amid a rise in bond yields and the Japanese yen was lower ahead of a key inflation report.
Symbol: Equities | Daily Change |
/ESM4 | -0.02% |
/NQM4 | +0.40% |
/RTYM4 | -0.72% |
/YMM4 | -0.61% |
Nasdaq futures (/NQM4) rose as Nvidia (NVDA) helped propel the tech-heavy contracts higher following yesterday’s earnings report. NVDA guided revenue for the second quarter above analysts’ expectations and topped estimates on revenue. The report marks the conclusion for earnings season for Wall Street’s most-watched stocks.
The small-cap Russell (/RTYM4) fell nearly 1% as bond yields rose on stronger-than-expected labor market data.
Strategy: (36DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 18,800 p Short 18,900 p Short 19,300 c Long 19,400 c | 23% | +1,475 | -530 |
Short Strangle | Short 18,900 p Short 19,300 c | 53% | +9,685 | X |
Short Put Vertical | Long 18,800 p Short 18,900 p | 54% | +655 | -1,345 |
Symbol: Bonds | Daily Change |
/ZTM4 | -0.09% |
/ZFM4 | -0.22% |
/ZNM4 | -0.29% |
/ZBM4 | -0.40% |
/UBM4 | -0.45% |
Jobless claims
The United States reported 215,000 initial jobless claims for the week ending May 18, which was below the expected 220,000 and last week’s 223,000.
That data, along with PMI numbers for May that showed above-estimated services sector activity, pushed back Fed rate cut bets and caused Treasury yields to rise. A strong labor market is seen complicating the Fed’s path to cutting, for which it needs a cooler economy.
Today, the Treasury will auction off 10-year TIPS (treasury inflation protected securities).
Strategy (29DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 107.5 p Short 108 p Short 109.5 c Long 110 c | 28% | +265.63 | -234.38 |
Short Strangle | Short 108 p Short 109.5 c | 39% | +734.38 | x |
Short Put Vertical | Long 107.5 p Short 108 p | 71% | +109.38 | -390.63 |
Symbol: Metals | Daily Change |
/GCM4 | -1.65% |
/SIN4 | -2.80% |
/HGN4 | -0.59% |
Silver futures drop
Silver futures (/SIN4) were down nearly 3% Thursday morning, dented by a rise in Treasury yields.
Traders will be looking for support at the April swing high around the 29 to 30 level, which could provide a base for bulls to re-consolidate and reassess. Meanwhile, the metals will remain sensitive to changes in interest rate cut odds and the next data on tap that could influence those bets is tomorrow’s durable goods orders for April, due out in the morning.
Strategy (33DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 29.75 p Short 30 p Short 31.5 c Long 31.75 c | 24% | +940 | -310 |
Short Strangle | Short 30 p Short 31.5 c | 56% | +8,145 | X |
Short Put Vertical | Long 29.75 p Short 30 p | 59% | +560 | -695 |
Symbol: Energy | Daily Change |
/CLN4 | +0.64% |
/HOM4 | +0.96% |
/NGM4 | -0.98% |
/RBM4 | +0.67% |
Crude oil climbs
Crude oil (/CLN4) prices are up after three days of losses, with the (/CLN4) contract gaining 0.64% this morning.
Despite today’s gains, oil prices remain near the May lows set after falling from April highs of around $86 per barrel. Oil stocks rose this week according to the Energy Information Administration (EIA). Meanwhile, gasoline prices (/RBM4) are outpacing oil prices to the upside, which is expanding crack spreads slightly. Gasoline demand typically rises ahead of the Memorial Day holiday due to fuel stations stocking up, but that effect may not carry through the summer. Oil prices remain at risk amid a slowing global economy.
Strategy (55DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 75.5 p Short 76 p Short 79.5 c Long 80 c | 20% | +380 | -120 |
Short Strangle | Short 76 p Short 79.5 c | 53% | +4,310 | X |
Short Put Vertical | Long 75.5 p Short 76 p | 60% | +190 | -310 |
Symbol: FX | Daily Change |
/6AM4 | +0.18% |
/6BM4 | +0.02% |
/6CM4 | +0.03% |
/6EM4 | +0.12% |
/6JM4 | -0.32% |
Yen contracts dip
Japanese yen contracts (/6JM4) are down 0.32% Thursday morning and the move threatens to take out its May low, which was set on the opening day of the month.
A break below that level threatens intervention levels from late April and will test Japan’s resolve in fighting shorts if we get there. This move puts the currency in an interesting spot. Will shorts pile on and challenge the Ministry of Finance, or will profit taking appear near these levels?
Strategy (43DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 0.0063 p Short 0.00635 p Short 0.00655 c Long 0.0066 c | 44% | +287.50 | -337.50 |
Short Strangle | Short 0.00635 p Short 0.00655 c | 59% | +925 | X |
Short Put Vertical | Long 0.0063 p Short 0.00635 p | 81% | +125 | -500 |
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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