Last Wednesday, the Fed hiked rates by 25 basis points. The Federal-Funds target rate now sits at a range of 0.25% to 0.50%. That marked the first time the Fed has hiked rates since 2018. The Fed noted that job gains have been strong in recent months, and this strong labour market (coupled with elevated inflation) are reasons for the Fed to begin hiking rates again. This was not news to Wall Street. Money managers have largely expected a 25-basis-point rate hike at this meeting (after earlier estimates for a 50- or even 75-basis-point hike). But markets initially sold off sharply from their early afternoon highs after the release. For once, markets rebounded as Fed chair Jerome Powell spoke. Powell said that the U.S. economy is strong – with a solid labour market and elevated consumer demand. In fact, he said that it was so strong that he is confident that the economy can withstand the Fed’s tightening cycle. Multiple times, he reiterated that the Fed is committed to bringing down inflation. With the labour market strong again, inflation is now the part of the Fed’s dual mandate that needs to be dealt with now. Powell said that the Fed could continue to raise rates without hurting the labour market. This eased concerns that the tightening cycle would lead to a rise in unemployment. More importantly, Powell did not say anything that the market did not already seem to have priced in. Wall Street money managers had already predicted multiple rate hikes this year, given the high inflation. Thus, nothing Powell said was taken as a huge surprise and Equity Markets rallied as a result. On Friday, U.S Indexes again closed higher, led by the NASDAQ 100 which ended the day with a gain of 2.14%. Russia and Ukraine news continued to dominate the headlines. Russian President Vladimir Putin reportedly said that Russia was willing to work faster in negotiations, boosting optimism that a diplomatic agreement could be reached sooner than later. It was a big day of geopolitical headlines. Elsewhere, the U.S. State Department said it was close to agreeing to a renewed nuclear deal with Iran, which could help ease inflation as the country’s oil re-enters the market, while, President Joe Biden held a call with Chinese President Xi Jinping, where Xi reportedly tried to present China as a neutral party in the Ukraine conflict. St. Louis Fed President James Bullard said that he would support the Fed raising rates to 3%, from today’s range of 0.25% to 0.50%. That would be the equivalent of 12 separate 25-basis-point (0.25%) hikes. But since there are only six meetings left in 2022, Bullard is essentially calling for a 50-basis-point rate hike at each meeting throughout the rest of the year. But markets shrugged off Bullard’s comments, finishing the day (and the week) higher. Growth stocks were the leaders on Friday, with software and semiconductor stocks leading the way. FedEx (FDX) was one of the big laggards, after supply-chain disruptions caused a fourth-quarter earnings miss. Within the S&P 500, 10 of the 11 sectors finished higher. European Markets closed higher. The Bank of England hiked rates for the third straight meeting, with warnings that inflation could soon surpass 10%. ECB President Christine Lagarde said it was unlikely that inflation would return to its pre-pandemic low levels. Italian Prime Minster Mario Draghi is set to approve another aid package, aimed at helping consumers deal with higher energy costs. U.K. Chancellor Rishi Sunak called for $92 billion in funding to lessen the impact of Russian sanctions on the British economy. In Asia, The Bank of Japan left interest rates unchanged, as Governor Haruhiko Kuroda said long-term inflation still remains below the central bank’s 2% target. Chinese President Xi Jinping urged government officials to stop the latest wave of COVID-19 cases without the economy taking a major hit. The South Korean government called for the removal of COVID-19 restrictions, despite the country dealing with another spike in cases. Elsewhere, Oil rose 1.47% on little news, while Gold fell 1.16% on Dollar strength.
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 1158 points on Friday and is now ahead by 4323 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 1.17% higher at a price of 4463.
The Dow Jones Industrial Average closed 274 points higher for a 0.80% gain at a price of 34,754.
The NASDAQ 100 closed 2.14% higher at a price of 14,420.
The Stoxx Europe 600 Index closed 0.8% higher.
This morning, the MSCI Asia Pacific Index rose 0.3%.
This morning, the Nikkei closed 0.65% higher at a price of 26,827.
Currencies
The Bloomberg Dollar Spot Index closed 0.4% higher.
The Euro closed 0.3% lower at $1.1049.
The British Pound closed 0.5% higher at 1.3176.
The Japanese Yen fell 0.5%, closing at $119.14.
Bonds
Germany’s 10-year yield closed two basis points lower at 0.36%.
Britain’s 10-year yield closed five basis points lower at 1.50%.
US 10 Year Treasury closed four basis points lower 2.15%.
Commodities
West Texas Intermediate crude closed 1.47% higher at $105.04 a barrel.
Gold closed 2.19% lower at $1921.10 an ounce.
This morning on the Economic Front we already had the release of German PPI which came in at +1.4% versus +1.7% expected. The only other data of note on either side of the Atlantic is Chicago Fed National Activity Index which will be released at 12.30 pm.
Cash S&P 500
The S&P registered its strongest week since November 2020. This move higher saw the S&P close above its 50 Day Moving Average (4432) and just below the 200 Day MA which comes in at a price of 4470 this morning. In points terms, the S&P rose 330 Handles from its 4138 Tuesday morning low. The S&P rallied to my initial 4335 sell level ahead of the FOMC Statement, before selling off to my 4250 buy level. I covered my short position at 4318 before the market rallied to my too tight 4278 T/P level on my post-Statement long-position. Subsequently, I emailed my Platinum Members to sell the S&P again at 4370 before covering this position at 4355 and selling again at a price of 4385, before getting stopped out of this trade at 4421 on Friday and I am still flat. The last couple of weeks have been challenging but we stuck to our strategy of buying dips given how oversold the technicals were and this game-plan has paid off. On Friday, the McClellan Oscillator closed at a very overbought reading of +230. As a result, I am now looking for a good place to go short over the coming days. This rip-roaring rally has been very difficult for short positions and any funds who are under-invested. The S&P has short-term support from 4405/4425 where I will be a buyer with a 4389 stop. The S&P has resistance from 4480/4500 where I will be a strong seller with no stop for now.
EUR/USD
The Euro rallied to my initial 1.1060 sell level before selling off to my 1.1035 revised T/P level and I am now flat. This morning the Euro is trading at 1.1050. We have resistance from 1.1090/1.1150 where I will be a small seller with a 1.1205 stop. The Euro has support from 1.0940/1.0990 where I will be a strong buyer with a 1.0895 tight stop.
March Dollar Index
After the Dollar traded lower to my 98.30 buy level I emailed my platinum Members to exit any long position at 98.58 and I am still flat. This morning, the Dollar is trading lower at 98.20. We have strong support from 97.40/97.90 where I will be a buyer with a 96.95 tight stop.
Cash DAX
Wow!! The insane rally continued in the DAX las week as the market hit a rebound high of 14550, over 2000 points higher from the 12500 low print, two weeks ago. The DAX is now overbought, has resistance from 14550/14650 where I will be an aggressive seller with a 14745 stop. The DAX has short-term support from 14000/14100 and I will move my buy level to this area with a higher 13895 stop.
Cash FTSE
The FTSE never came close to my buy level last week and I am still flat. Even though the Bank of England again raised rates and voiced their concerns about inflation possibly hitting 10%, the FTSE ignored this news and made new rebound highs, trading at 7420 this morning. The FTSE has resistance from 7470/7530 where I will be a strong seller with a 7585 stop. I no longer want to be a buyer of the FTSE at this time.
Dow Rolling Contract
My Dow plan worked well as both my short and long positions were hit on Wednesday, allowing me to go short at 34050 before covering this position at my revised 33900 T/P level. Subsequently, post the FOMC Statement, the Dow traded lower to my 33400 buy level before rallying to my 33650 T/P level and I am now flat. The Dow subsequently surged to hit a rebound high above 34800 on Friday, before having a small sell-off overnight and is currently trading at 34630 as I go to press. Just like the S&P above, the Dow is now overbought and will have strong resistance at its 200 Day MA which comes in at 34957 this morning. I will be an aggressive seller from 35000/35300 with no stop for now. The Dow has short-term support from 34300/34500 where I will be a small buyer with a tight 34185 stop. The ‘’Fear & Greed’’ Index closed with a reading of 38 last Friday night, with a now lower ‘’Fear’’ print.
Cash NASDAQ 100
The NDX was the strongest of the U.S. Indexes last week which is no surprise given my commentary last Wednesday when I mentioned that the market had become has oversold as the German DAX. As a result, the NDX rallied over 1400 points for an 11% gain. The Platinum Service managed to make 335 points in the NASDAQ since my last Commentary and I am now flat. This morning, the NDX has support from 14200/14300 where I will be a small buyer with a 14050 stop. We have short-term resistance from 14900/15100 where I will be a strong seller with a wider 15255 stop.
June BUND
My Bund plan worked well with the market trading lower to my 160.70 buy level before rallying to my 161.25 T/P level and I am still flat. The Bund traded in a narrow range over the past couple of days, trading at a price of 160.90 this morning. The Bund has strong support from 160.10/160.60 where I will be an aggressive buyer with a 159.55 stop.
Gold Rolling Contract
My Gold plan worked well with the market trading lower to my aggressive 1898 buy level before rallying to my 1908 revised T/P level and I am now flat. Gold hit a rebound high above 1945 before selling off to sit at 1923 this morning, Today, I will again be a buyer on any further dip to 1883/1898 with the same 1869 stop. If I am taken long, I will have a T/P level at 1913.
Silver Rolling Contract
My Silver plan worked well with the market trading lower to my 24.40 buy level before rallying to my 24.75 T/P level and I am still flat. Today, I will again be a buyer on any dip lower to 23.80/24.40 with the same 22.95 stop.
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