U.S. Equity Markets reversed Monday’s sell-off closing higher, led by the S&P ending Tuesday with a gain of 1.86%. Speaking before the U.S. House Committee on Financial Services, Powell said that he is in favor of raising rates by 25 basis points at the March meeting. This essentially ended the chances of the Fed surprising markets and raising rates by 50 basis points, easing some concerns among investors and why we saw markets rally throughout the day. Economic data also pointed to the Fed raising rates. Payroll-processing firm ADP’s recent Employment Report showed that the economy added 475,000 jobs in February, more than Wall Street estimated while the January data was revised from a loss of 301,000 jobs to a gain of 509,000. The strong jobs data likely means that the Federal Reserve will push ahead with rate hikes, beginning at its policy meeting later this month. In the eyes of Wall Street, a strong economy means the Fed has more reason to pull back on economic support. There were only a handful of declines in the S&P 500 yesterday. Ford Motor (F) was among the big winners after announcing that it would split its electric-vehicle and combustion-vehicle businesses into two separate segments. Dollar Tree (DLTR) was among the few decliners on a weak 2022 sales forecast. Within the S&P 500, all 11 sectors finished higher. European markets closed higher. Kremlin spokesman Dmitry Peskov said Russia is prepared for additional talks with Ukraine this morning to pursue a cessation of current hostilities. Russia’s invasion of Ukraine turned to more traditional military tactics of bombardment, signaling the conflict will likely drag on longer than Moscow anticipated. In terms of the financial markets, Bundesbank President Joachim Nagel said German inflation would likely come in above 5% this year while adding he also sees Euro-Zone inflation at a record high in 2022. In Asia, Chinese Foreign Minister Wang Yi urged Russia and Ukraine to find a resolution to their current conflict through negotiation and respecting territorial integrity. Japanese Prime Minister Fumio Kishida said he would work with other nations to boost oil production and bring stability to energy markets. South Korea’s Industrial Production data for January unexpectedly expanded, signaling technology demand remains strong. Australia’s fourth-quarter gross domestic product growth was in line with expectations, as household spending rebounded following the removal of coronavirus sanctions. Elsewhere, Oil rose 6.95% as OPEC said it would stick to its gradual production increases, easing concerns that the cartel could flood the market with supply, while Gold fell 0.84% as traders rotated back into risk assets.
To mark my 2500th issue of TraderNoble Daily Commentary I am offering a special 2-Year Rate of Euro 2750 for my Platinum Service which includes 1 to 4 updated emails throughout the trading day to demonstrate this value, a monthly subscription over the same period would cost 4440 euro in total This offer represents a 38% discount and is open to both new and existing members. If anyone is interested in this offer can you please email me on bryan@tradernoble.com for details
For anyone following my Platinum Service it made 25 points yesterday and is now ahead by 280 points for March. The Platinum Service made an impressive 5324 points gain in February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss, having made 2466 points in November, 1028 points in October, 2866 points in September, 1543 points in August, and 996 points in July. The Platinum Service made 1366 points in June, 1439 points in May, 1244 points in April, after ending March with an impressive gain of 3769 points. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
Equities
The S&P 500 closed 1.86% higher at a price of 4386.
The Dow Jones Industrial Average closed 596 points higher for a 1.79% gain at a price of 33,891.
The NASDAQ 100 closed 1.70% higher at a price of 14,243.
The Stoxx Europe 600 Index closed 0.8% higher.
This morning, the MSCI Asia Pacific Index rose 1.1%.
This morning, the Nikkei closed 0.7% higher at a price of 26,577.
Currencies
The Bloomberg Dollar Spot Index closed 0.2% lower.
The Euro closed 0.1% lower at $1.1110.
The British Pound closed 0.6% higher at 1.3389.
The Japanese Yen fell 0.6%, closing at $115.60.
Bonds
Germany’s 10-year yield closed six basis points higher at 0.03%.
Britain’s 10-year yield closed 16 basis points higher at 1.26%.
US 10 Year Treasury closed 13 basis points higher 1.86%.
Commodities
West Texas Intermediate crude closed 6.95% higher at 110.60 a barrel.
Gold closed 0.84% lower at $1,925.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone and U.K. Markit Services PMI at 8.55 am, 9.00 am and 9.30 am respectively. Next, we have Euro-Zone PPI and Unemployment at 10.00 am, followed by the ECB Minutes from last Month’s Meeting at 12.30 pm. At 1.30 pm we have U.S. Weekly Jobless Claims, Non-Farm Productivity and Unit Labour Costs. This is followed by Markit Services PMI at 2.45 pm. Finally, at 3.00 pm we have Factory Orders, and the second day of Fed Chair Powell’s Testimony before Congress.
Cash S&P 500
As expected, the S&P rallied hard yesterday, completely reversing Monday’s aggressive sell-off. This move higher saw my 4330 T/P level filled on my latest 4320 long position and I am still flat as the S&P never came close to me second buy level. Fed Chair Powell managed to calm markets confirming that we will only see a 25-basis point Rate hike next week. By mentioning the ongoing war in Ukraine on numerous occasions it means the Fed will take rate increases slow and steady rather than aggressive, thus helping the S&P to end the day with a gain of 1.86%. The S&P has short-term resistance from 4400/4420 and a break and close above here will see a rally to 4470/4500 and then 4525/4565 where I will be an aggressive seller with no stop. The S&P has support from 4340/4360 where I will be a strong buyer with no stop for now.
EUR/USD
The Euro got hit hard again yesterday, stopping me out of my 1.1150 long position at 1.1075 and I am still flat. The Euro is oversold but with Oil rising a further $5 this morning, it will keep downward pressure on the Euro. The Euro has resistance from 1.1180/1.1230 where I will be a small seller with a 1.1305 wider stop. Despite the Euro being oversold I do not want to be long the market at this time.
March Dollar Index
No Change. The Dollar traded in a narrow range yesterday. I am still short at 97.30 with the same 97.10 T/P level. I will continue to have no stop for now.
Cash DAX
The DAX continues to struggle despite having a small rally yesterday. The market needs to break above the key 14300/14400 resistance area for bulls to regain control. I will be a small seller in this range with a 14505 wider stop. I will now raise my buy level to 13650/13750 with a 13495 wider stop.
Cash FTSE
The FTSE rallied all-day yesterday and I am still flat. We have support from 7290/7350 and I will raise my buy level to this area with a 7235 stop. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
The Dow is now trading 700 points higher from where I marked prices 24 hours ago. This move was not unexpected as the oversold charts are telling you that investors are looking to buy the American Indexes. The Dow has support from 33700/33900 and I will raise my buy level to this area with again no stop for now. My only interest in selling the Dow is from 34950/35250 where I will be aggressive with no stop.
Cash NASDAQ 100
The NDX closed above 14150, signaling traders to buy the market. I am still flat. Today, I will raise my buy level to 14080/14180 with a wider 13945 stop. I do not want to be short the NDX at this time.
March BUND
The Bund gave up some of Monday’s incredible 300-point rally, trading the whole of my buy range for a now 169.45 average long position. This morning the Bund is trading at 169.30 as I go to press. I will leave my 168.75 stop unchanged while lowering my T/P level to 169.70. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
No Change. Gold has resistance from 1970/1985 where I will be a very small seller with a 2001 stop.
Silver Rolling Contract
Silver just missed my 24.60 buy level before rallying to sit higher at 25.30 this morning. I am reluctant to chase Silver higher. Therefore, I will leave my 24.00/24.60 buy level unchanged with the same 23.35 stop.
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