OIL: Oil End of Day Summary: WTI Plunges

• Stocks are drifting near midday highs late Wednesday semiconductor stocks helping SPX Eminis climb back near early December all-time highs (6178.75).
• Currently, the DJIA trades up 110.69 points (0.25%) at 44137.46, S&P E-Minis up 41.25 points (0.68%) at 6126, Nasdaq up 251.1 points (1.3%) at 20009.01.
• Information Technology and Communication Services sectors continued to outperform in the second half, chip stocks supporting the former as noted: Monolithic Power +8.53%, Nvidia +4.63%, Lam Research +3.66%, while Applied Materials gained 3.01%.
• Interactive media and entertainment stocks led gainers in the Communication Services sector: Netflix still up over 10% after some profit taking in the second half as subscriptions soar, Warner Bros +2.35%, Meta +1.77%.
• On the flipside, Utilities and Real Estate sectors continued to underperform in late trade, gas and multi-energy providers weighing on the former: Dominion Energy -4.54%, PG&E -3.01% while Edison International declined 3.63%.
• Investment trusts, particularly health care and industrial REITs weighed on the Real Estate sector: Ventas -2.95%, Healthpeak Properties -2.56% and Prologis -2.0%.
• Earnings expected to be announced after the close include: Steel Dynamics, Discover Financial Services, Hexcel Corp, Alcoa Corp, Knight-Swift Transportation and Kinder Morgan Inc.

• +50,000 TYH5 102 puts 1 ref 108-18. Total volume in the OTM put only 2,900 coming into the session.

We’ve updated our Hawk-Dove Spectrum for 2025, with the rotation of regional president voters bringing in Chicago Fed’s Goolsbee (dove), KC’s Schmid (hawk), St Louis’s Musalem (hawk), and Boston’s Collins (neutral/dove) for 2024. (Out are the neutral/hawkish Bostic and Barkin, hawk Hammack, and neutral/dovish Daly).

• All participants remain on the dovish side of the Hawk-Dove line in absolute terms, reflecting the Committee’s overall easing bias.
• However most of the Dots have been moved in a more hawkish direction in the last 6 weeks, in light of the more limited cuts seen in the December Dot Plot and the growing sentiment that the FOMC can remain patient in deciding when to cut next.
• We now regard Hammack as the FOMC’s biggest hawk, though only marginally over her colleagues Bowman, Schmid and Musalem.
• Conversely, Gov Waller has ensconced himself as one of the pre-eminent doves on the Committee, seeing potential for 3-4 cuts this year, and possibly restarting the easing cycle earlier than market pricing implies (though he spoke after the December CPI data).