Higher than expected Inflation data saw U.S. Equity Markets sell-off into close as the three main Indexes all lost 1.55%, following one of the most volatile Quarters in history. Personal Consumption Expenditures (“PCE”), the Federal Reserve’s preferred inflation gauge, rose 6.4% on a year-over-year (“YOY”) basis in February. On a core basis, PCE rose 5.4%. The core data remain at the highest level since March of 1983. For the overall number, we must go back to January of 1982. This pushed markets lower, as it indicates that the Fed (which has already guided to seven rate hikes this year) will need to act more aggressively to combat inflation. The fear is that any significant tightening from the Fed could choke off and cause a recession. The other big news was the White House’s Strategic Petroleum Reserve (“SPR”) release. The White House announced a plan to release 1 million barrels of crude per day for the next six months. This pushed oil prices lower, though crude did rebound off the lows after the announcement was officially made (sell the rumour, buy the news). The White House’s two previous SPR releases – which added 80 million barrels of crude to the market – did little to nothing to stop crude’s march higher. Defensive sectors – utilities and real estate – were the leaders today. These sectors – utilities especially – are seen as safer because of their low volatility, steady returns, and healthy dividends. Investors flock to these sectors in times of uncertainty, and that is what we saw yesterday. Growth names underperformed, as concerns over rising interest rates hurt the growth outlook for this sector. Wall Street views these companies as ones that need to borrow to fuel growth, and rising interest rates make it more expensive for the companies to borrow and keep growing. Advanced Micro Devices (AMD) dragged tech stocks lower, after a downgrade from analysts at Barclays… which cited risks across several of AMD’s markets. Within the S&P 500 Index, all 11 sectors finished lower. European Markets closed lower. French preliminary consumer price index (“CPI”) figures for March rose more than anticipated, hitting the highest level since 1997. The German Council of Economic Experts cut its 2022 growth outlook from 4.6% to 1.8%, citing uncertainty surrounding the conflict between Russia and Ukraine. European Central Bank Governing Council member Pierre Wunsch said he is worried it could be forced to enact tighter monetary policy if inflation continues to rise rapidly. Rising energy prices could add $255 billion to consumer expenses in Europe, lowering economic growth by 1.8%, according to an analysis from Bloomberg. In Asia, Chinese Premier Li Keqiang called on government officials to focus on economic stability, pledging to meet the country’s 5.5% growth target for 2022. China’s official composite purchasing managers’ index (“PMI”) numbers for March declined versus February, falling into contraction territory for the first time since August. Japan’s preliminary Industrial Production data for February grew for the first time since November as automotive production rebounded. South Korean Business Confidence amongst manufacturing and non-manufacturing companies declined in April versus March as respondents worried about domestic demand. Elsewhere, Oil fell 6.49% after the White House announced the largest-ever release from the Strategic Petroleum Reserve, while Gold rose 0.15% on little news.
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 lost 195 points yesterday, closing March with a gain of 5883 points. 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 1.57% lower at a price of 4530.
The Dow Jones Industrial Average closed 550 points lower for a 1.56% loss at a price of 34678.
The NASDAQ 100 closed 1.55% lower at a price of 14,838.
The Stoxx Europe 600 Index closed 1.1% lower.
Yesterday, the MSCI Asia Pacific Index fell 0.6%.
Yesterday, the Nikkei closed 0.73% lower at a price of 27,821.
Currencies
The Bloomberg Dollar Spot Index closed 0.4% higher.
The Euro closed 0.6% lower at $1.1084.
The British Pound closed 0.1% higher at 1.3149.
The Japanese Yen rose 0.1%, closing at $121.70.
Bonds
Germany’s 10-year yield closed 11 basis points lower at 0.55%.
Britain’s 10-year yield closed six basis points higher at 1.61%.
US 10 Year Treasury closed two basis points lower 2.32%.
Commodities
West Texas Intermediate crude closed 6.49% lower at $100.82 a barrel.
Gold closed 0.15% higher at $1936.10 an ounce.
This morning on the Economic Front we have German Euro-Zone and U.K. Markit Manufacturing PMI at 8.55 am, 9.00 am and 9.30 am respectively. This is followed by Euro-Zone CPI at 10.00 am. Next, at 1.30 pm, we have U.S. Non-Farm Payrolls, including the Unemployment Rate and Average Earnings. At 2.45 pm we have Markit Manufacturing PMI. Finally, at 3.00 pm we have Construction Spending and ISM Manufacturing.
Cash S&P 500
I mentioned in yesterday’s commentary that S&P has become tricky to trade. I can vouch for that. After the S&P hit my aggressive 4562 buy level I was stopped out near the close at 4539 and I am now flat. This late sell-off was nasty but I am reluctant to chase the S&P lower despite how overbought the U.S. Indexes are at this time. Stocks have gained in April in 15 of the past 16 years for an average of +3.1%. The exception was 2012 when the S&P closed lower by just 0.7%. Rising Bond Yields have yet to leave a mark on Equity Markets but this cannot last long and apart from Russia could be one of the main reasons why April has a down month. The sell-off over the past two days came after the main Moving Averages were tested and rejected. Add to the mix the NFP release at 1.30 pm and today promises to be another wild session. The S&P has resistance from 4580/4600. I will lower my sell level to this area with a tight 4621 stop. The S&P has support from 4495/4515 where I will be a strong buyer with a 4479 stop.
EUR/USD
The Euro reversed Wednesday’s rally, trading the whole of my buy range for a now 1.1095 average long position. I will leave my stop unchanged at 1.1029 while lowering my T/P level to 1.1125. If any of the above levels are hit I will be back with a new update for my Platinum Members.
March Dollar Index
No Change. I am still long at 98.40 from Tuesday. I will add to this trade at 97.60 with a now lower and tight 97.25 stop. Meanwhile, I will leave my 98.60 T/P level unchanged and if any of the above levels are filled I will be back with a new update for my Platinum Members.
Cash DAX
The DAX got hit hard again yesterday and I am still flat. The DAX has now fallen over 600 points since Tuesday’s rebound high. I will now lower my sell level to 14600/14700 with a lower 14525 stop. The DAX has short-term support from 14050/14150 where I will be a small buyer with a 13975 stop.
Cash FTSE
The FTSE just missed my initial 7605 sell level before having a small sell-off into the New York close. I will now lower my sell level to 7570/7620 with a tight 7665 stop. I still do not want to be long the FTSE at this time. If I am taken short I will have a T/P level at 7525.
Dow Rolling Contract
Thankfully, we had no buy level in the Dow yesterday on a day when the Dow fell 600 points from where I marked prices 24 hours ago. As I go to press the Dow has rallied over 100 points off its late New York sell-off. The Dow has strong support from 34350/34600 where I will be an aggressive buyer with no stop for now. Ahead of both the NFP and the weekend I do not want to be short the Dow especially on a Friday.
Cash NASDAQ 100
The NASDAQ led both the S&P and Dow lower yesterday and I am still flat as unfortunately I had no short position on board despite being bearish technology stocks. The NDX is trading at 14860 as I go to press. We have strong support from 14670/14520 where I will be an aggressive buyer with no stop for now. I no longer want to be short the NDX at this time.
June BUND
No Change. Despite the Bund rallying 150 points yesterday, I am going to stay flat and take a closer look for Monday’s commentary.
Gold Rolling Contract
Gold tried to sell-off again yesterday, before a late rally saw Gold close higher at 1936. I am still flat and I will now raise my buy level to 1900/1915 with a higher 1887 stop.
Silver Rolling Contract
My Silver plan worked well with the market trading lower to my 24.50 buy level before rallying to my 24.85 T/P level and I am now flat. Silver has support from 23.60/24.20 where I will again be a buyer with a lower 23.05 stop.
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