Futures Trading Education

U.S. Indices were broadly lower on Tuesday, albeit in contained ranges, as participants await the US jobs report on Wednesday, followed by CPI on Friday. Data on Tuesday was largely subdued, as Retail Sales disappointed, and the weekly ADP only saw 6.5k jobs added per week, for the last four weeks. Import/export prices saw the former come in as expected, while the latter was slightly lower, in addition to soft employment costs. Sectors were mixed, as Utilities, Real Estate, and Materials outperformed, with Financials and Communications lagging as further Alphabet weakness weighed on the latter. For Financials, weakness was led by names such as Charles Schwab and Interactive Brokers Group, which saw a sharp sell off in the US afternoon, albeit with no clear driver, but some touted Altruist adding AI tax planning to its Hazel platform. One of the other stock-specific highlights included impressive DataDog (+11%) earnings, which helped support other software names. The Dollar pared some of its earlier weakness and stopped the rot from its sell-off on Monday, with the Yen the G10 outperformer and continuing to benefit post-election. CAD saw marginal gains, while other G10s saw losses to varying degrees. Oil was slightly lower, albeit within tight parameters, with the main update being Trump informing Axios that he is considering sending a second aircraft carrier strike group to the Middle East to prepare for military action if negotiations with Iran fail, adding that either we will make a deal or we will have to do something very tough like last time. Spot Gold was lower and fell back beneath USD 5,050/oz and Treasuries caught a bid after the aforementioned soft retail sales and ECI, and saw little reaction on an average 3 Year Treasury Auction. Elsewhere, there was hawkish Fed speak from Logan and Hammack, with both of them seemingly happy with where rates are presently. The latest New York Fed survey saw consumer delinquencies rise to the highest since 2017, while mortgage defaults surged in lower-income areas, with student loan delinquencies rising to a record. The December Retail Sales report was soft, with the headline unchanged versus November despite expectations for a 0.4% increase and cooling from the prior 0.6% pace in November. Within the report, ex-autos were also unchanged and softer than the 0.3% forecast, cooling from the prior 0.5%. The control group, a good gauge for consumer spending within the GDP report, was also soft, falling 0.1% after rising 0.1% in the prior month, missing expectations of a 0.4% rise. For the headline, across sectors, the only real strength was seen in building materials, rising 1.2%, while sporting goods rose 0.4% and gasoline stations +0.3%. On the flip side, miscellaneous and furniture stores declined by 0.9%, with other businesses around flat. Pantheon Macroeconomics writes that weak underlying sales are probably a sign of what is to come. The desk notes that this data, mapped with other leading indicators, points to a 0.1% increase in real consumer spending in December, and some slight downward revisions to spending growth in October and November. Pantheon adds that this suggests, albeit with a meaningful margin of error, to 2.5% spending growth in Q4, slower than the 3.5% in Q3. The Q4 Employment Cost Index rose 0.7%, a touch softer than the 0.8% forecast and prior. Within the report, wages and salaries rose 0.7%, while benefits costs also increased 0.7%, vs the prior 0.8%. Summarising the data, Pantheon Macroeconomics says labour cost growth is continuing to moderate despite solid productivity gains, which opens the door to further easing from the FOMC later this year. Pantheon highlights that “With 2% growth in productivity looking sustainable, unit labour costs are rising at a mere 1.5% pace, easily low enough to return core PCE inflation to the 2% target.” Fed Member Hammack said the Fed is in a good position with policy ‘to see how things play out’, and that the current Fed target rate ‘in the vicinity of neutral’ (Powell has previously said in a plausible range of neutral, albeit towards the higher end), adding that Fed rate policy could be on hold ‘for quite some time’. On the inflation side of things, the Cleveland Fed President remarked it is ‘still too high’ and tariff issues still in play, and she expects it to ease as year moves forward, but that is just a forecast. Added that there is a risk inflation could stick at 3% this year and needs to come down, worries that inflation could become entrenched, but expectations are currently contained, and that it is important to get to 2% inflation before changing rates again. On the labour market, Hammack said the job market stabilised into low hire, low-fire landscape. She further added she is ‘cautiously optimistic’ about the economic outlook. In the Q&A section, Hammack echoed that interest rates could remain on hold for an extended period while economic data is assessed, and flexibility will be maintained to raise rates if needed. Elsewhere, Oil closed higher by 0.63% while Gold closed lower by 0.5% following a session that saw plenty of two-way price action.

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For anyone following my Platinum Service it made 220 points yesterday and is now ahead by 4007 points for February, after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022.  Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking