Following a volatile start to April, U.S. Equity Markets rallied in the last hour to close higher, led by the 0.4% gain in the Dow. The two-year and 10-year Treasury curves inverted again on Friday, marking another recession indicator that has been triggered. This could put some fear into the markets, but it does not mean a recession is imminent. In fact, it usually takes 18 months after the yield curve inverts for stocks to peak, while the S&P 500 Index has averaged a 19.1% gain between inversion and the peak. The U.S. Bureau of Labour Statistics’ Non-Farm Payroll data showed 431,000 new hires last month compared with the expectation of 490,000. February’s 678,000 figure was bumped up to 750,000, making it the strongest monthly gain since September 2020. Wall Street sees strong jobs data as a sign of a strong economy, making it another reason for the Federal Reserve to raise interest rates. With seven rate hikes “pencilled in” for 2022, it’s not a matter of if the Fed will hike, but whether they do so by 0.25% or 0.50%. The latter could be seen as a drastic move, which could choke off even more growth. In other economic data, March ISM Manufacturing Purchasing Managers Index (“PMI”) fell and came in below estimates, with new orders declining and raw materials prices rising. This could spark fears of continued high inflation with softening economic demand. Within the S&P 500, eight of the 11 sectors finished higher. European Markets closed higher. Ukrainian Chief Negotiator David Arakhamia said his country is set to resume talks with its Russian counterparts online today. Euro-Zone preliminary consumer price index (“CPI”) growth for March was much higher than expected, driven by rising energy prices. The International Energy Agency is set to hold an emergency meeting to decide on another release of crude reserves. Another coordinated reserve release could push oil prices down and ease inflation. European Central Bank Chief Economist Philip Lane said it must be prepared to adjust interest rates as rising energy prices are pushing inflation higher. In Asia, S&P Global Caixin China manufacturing PMI data for March was weaker than anticipated as COVID-19 lockdowns weighed on output. Japanese large manufacturer’s Quarterly Business Confidence index declined for the first time since June 2020 on concerns about increasing costs. South Korea’s export growth for March eased versus February as automobile and vessel shipments abroad slowed. S&P Global’s Taiwan manufacturing PMI figures for March fell for the third consecutive month as new order growth continued to ease. Elsewhere, Oil fell 1.01%, closing below $100 for the first time in two weeks, while Gold fell 0.68% 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 290 points on the first trading session for April, after, 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 0.34% higher at a price of 4545.
The Dow Jones Industrial Average closed 139 points higher for a 0.4% gain at a price of 34818.
The NASDAQ 100 closed 0.15% higher at a price of 14,861.
The Stoxx Europe 600 Index closed 0.5% higher.
Last Friday, the MSCI Asia Pacific Index fell 0.3%.
Last Friday, the Nikkei closed 0.56% lower at a price of 27,665.
Currencies
The Bloomberg Dollar Spot Index closed 0.2% higher.
The Euro closed 0.3% lower at $1.1051.
The British Pound closed 0.3% lower at 1.3111.
The Japanese Yen fell 0.7%, closing at $122.55.
Bonds
Germany’s 10-year yield closed one basis points higher at 0.56%.
Britain’s 10-year yield closed one basis points higher at 1.62%.
US 10 Year Treasury closed seven basis points higher 2.39%.
Commodities
West Texas Intermediate crude closed 1.01% lower at $99.27 a barrel.
Gold closed 0.68% lower at $1924.10 an ounce.
This morning on the Economic Front we have German Trade Balance and Current Account at 7.00 am. This is followed by Euro-Zone Sentix Investor Confidence at 9.30 am and a speech from U.K. Governor Bailey at 10.05 am. Finally, we have U.S. Factory Orders at 3.00 pm.
Cash S&P 500
My S&P plan worked well on Friday as the market hit my 4512 buy level before rallying to my revised 4525 T/P level and I am now flat. Although the Fed are behind the curve as wage growth continues to surge, it is still difficult to be short given the April positive seasonality as outlined in Friday’s Daily Commentary. I cannot see the Fed hiking Interest Rates seven times this year as I do not feel that Fed Chair Powell has the stomach for such aggressive price action. Remember apart from a 25- basis point increase the Fed have done nothing yet as QE does not end until next month. At the same time both Japan and the ECB should no sign of ending their respective QE’s any time soon. Today, I will again be a buyer on any dip lower to 4503/4523 with the same 4479 wider stop. I will not chase the S&P lower, leaving my 4580/4600 sell level unchanged with the same 4621 stop.
EUR/USD
No Change. I am still long from last Thursday at an average rate of 1.1095. I will now lower my T/P level to 1.1110 while leaving my 1.1029 tight stop unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
March Dollar Index
My latest long Dollar position worked well as the market traded higher to my 98.60 T/P level following the release of the stronger than expected Payroll data and I am now flat. The Dollar has support from 97.60/98.20 where I will again be a buyer with a tight 97.15 stop. I still do not want to be short the Dollar at this time.
Cash DAX
No Change. The DAX traded in a narrow range on Friday, and I am still flat. I will continue to be a strong seller from 14600/14700 with the same 14525 stop. The DAX has short-term support from 14110/14210 where I will be an aggressive buyer with a higher 14035 stop.
Cash FTSE
I am still flat the FTSE which like the DAX above had a narrow trading range on Friday. I will now raise my sell level to 7600/7660 with a higher 7705 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 7555.
Dow Rolling Contract
Friday’s idea of buying dips certainly worked well as after the Dow hit my 34570 buy level we rallied to my revised 34710 T/P level and I am now flat. This morning, the Dow is trading higher at 34770 as I go to press. Today, I will again be a buyer on any dip lower to 34300/34550 with again no stop for now. I still do not to be short the Dow especially at this time, especially given the record number of buybacks in the market.
Cash NASDAQ 100
The NASDAQ just missed my initial 14670 buy level with a 14720 low print before rallying over 100 points into the close and I am still flat. The NDX is trading at 14810 as I go to press. We have strong support from 14650/14520 where I will continue to be an aggressive buyer with no stop for now. Given the April positive seasonality, I no longer want to be short the NDX at this time.
June BUND
Following Thursday’s impress 150- point rally, the Bund traded in a narrow range on Friday, and I am still flat. The Bund has support from 157.10/157.80 where I will be a small buyer with a 156.55 stop. If I am taken long, I will have a T/P level at 158.25.
Gold Rolling Contract
Gold reversed most of Thursday’s rally and I am still short. I will now lower my Gold buy level to 1893/1908 with a tight 1881 stop.
Silver Rolling Contract
No Change. I am still an aggressive buyer on any dip lower to 23.60/24.20 with the same 23.05 stop.
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