U.S. Equity Markets reversed all of Monday’s gains as one Fed Member called for a rapid rate rise. The NADAQ 100 led yesterday’s session lower, closing with a loss of 2.24%. Federal Reserve Board member Lael Brainard said inflation is growing too quickly and that the central bank needs to act more boldly. As a result, Brainard anticipates interest rates will “methodically” move higher. In layman’s speak, it means we should anticipate rate hikes at the six meetings left in 2022. In addition, she favours a “rapid” shrinking of the central bank’s balance sheet. Meanwhile, Kansas City Fed President Esther George said she could see the Fed pushing rates past neutral and into restrictive territory. Thus, the central bank is set to speed up its policy tightening, which sparked fears that the Fed could choke off growth. Elsewhere, March ISM Non-Manufacturing data came in slightly above estimates, with a big beat in new orders – showing strong demand. But the prices component rose to the second-highest level ever, showing that inflation is not going away just yet. Utilities and real estate outperformed again as defensive sectors. With rising interest rates sending investors to the exits in high-growth names (tech, communications, and discretionary), these investors rotated into the safer sectors. Twitter (TWTR) bucked the selling trend in technology, after announcing that Elon Musk would be joining its board. Within the S&P 500, seven of the 11 sectors finished lower. European Markets closed mixed. Ukraine’s President Volodymyr Zelenskyy said negotiations with Russia will become increasingly difficult the longer Moscow delays a Presidential Meeting. European Central Bank Governing Council member Klaas Knot said raising interest rates sooner than later allows for less reactionary moves in the future. German Economy Minister Robert Habeck said it would nationalise a unit of Gazprom PJSC operating in the country to stabilise operations at the country’s largest gas storage facility. In Asia, Bank of Japan Governor Haruhiko Kuroda, while testifying in parliament, categorised the Yen’s recent drop as rapid, implying the government could step in to support the currency. China’s National Health Commission said daily COVID-19 infections in Shanghai rose to more than 13,300 versus 9,000 the day prior, increasing lockdown-extensions potential. Japanese household spending growth for February was weaker than expected, signalling economic growth continues to cool. Stock markets in mainland China, Hong Kong, and Taiwan were closed for the festival of ancestor remembrance. Elsewhere, Oil fell 3% on little news while Gold closed 0.44% lower on continued 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 370 points yesterday, and is now ahead by 594 points 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 1.26% lower at a price of 4525.
The Dow Jones Industrial Average closed 280 points lower for a 0.8% loss at a price of 34,641.
The NASDAQ 100 closed 2.24% lower at a price of 14,824.
The Stoxx Europe 600 Index closed 0.8% lower.
Yesterday, the MSCI Asia Pacific Index fell 0.1%.
Yesterday, the Nikkei closed 0.19% higher at a price of 27,787.
Currencies
The Bloomberg Dollar Spot Index closed 0.5% higher.
The Euro closed 0.6% lower at $1.0905.
The British Pound closed 0.6% lower at 1.3070.
The Japanese Yen fell 1.3%, closing at $123.60.
Bonds
Germany’s 10-year yield closed 10 basis points higher at 0.61%.
Britain’s 10-year yield closed nine basis points lower at 1.65%.
US 10 Year Treasury closed 17 basis points higher 2.55%.
Commodities
West Texas Intermediate crude closed 3% lower at $100.95 a barrel.
Gold closed 0.44% lower at $1923.10 an ounce.
This morning on the Economic Front we have Euro-Zone PPI at 10.00 am. This is followed by speeches from ECB Members, De Guindos, Panetta and Lane at 8.00 am, 10.00 am and 11.45 am respectively. Next, we have U.S. MBA Mortgage Applications at 12.00 pm. Finally, we have the FOMC Minutes from last Month’s Fed Meeting at 7.00 pm.
Cash S&P 500
The S&P traded in a wide 75 Handle range since I posted yesterday morning with plenty of two-way price action. This move lower saw the VIX spike, closing 13% higher at 21.05. Shortly, after the Cash Markets opened, the S&P traded lower to my 4568 T/P level on Monday’s late 4583 short position. Subsequently, the S&P traded the whole of my buy range for a now 4527 average long position, falling hard after Fed Member Brainard called for aggressive rate hikes. Brainard is normally a dove so for her to be so aggressive yesterday saw Bond Yields fly higher with the 10-year now sitting a year-to- date, high rate of 2.55%. We have the Fed Minutes this evening and these will make crucial reading as to see whether the Fed Members are serious about rate hikes to combat inflation. I will have a T/P level at 4537 on my long S&P position. I will look to sell the S&P again from 4565/4585 with a tight 4601 stop. I will also look to buy the S&P on any further move lower to 4470/4490 with a 4453 stop. If I am taken long at this second buy level I will have a T/P level at 4508. If I am taken short I will have a T/P level at 4551.
EUR/USD
I am still flat. The Euro fell 0.6% yesterday which is the fourth consecutive fall. I will now lower my buy level to 1.0780/1.0840 with a now lower 1.0725 stop. The Euro has resistance from 1.0950/1.1010 and I will lower my sell level to this range with a tight 1.1055 stop.
March Dollar Index
The Dollar rallied a further 0.5% yesterday and I am still flat as the market again never came close to my buy range. The Dollar is short-term overbought. We have resistance from 99.95/100.65 where I will be an aggressive seller with a 101.05 stop. If I am taken short I will have a T/P level at 99.40.
Cash DAX
I am still flat as the DAX fell just shy of my 14670 sell level, falling over 200 points into the New York close. I will now lower my sell level to 14520/14620 with a tight 14705 stop. I still no longer want to be long the DAX at this time.
Cash FTSE
In contrast to the DAX and U.S. Indexes, the FTSE closed higher yesterday. Just before the New York close the FTSE traded higher to my 7610 sell level. I am still short with a now higher 7575 T/P level. I will add to this trade at 7670 while leaving my stop unchanged at 7705. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Dow Rolling Contract
No Change. I am still flat as the Financials continue to weigh on the Dow which is a surprise given the rise in Bond Yields. Ahead of the Fed Minutes, I will now lower my buy level to 34100/34350 with a tight 33985 stop. I was lucky with my Dow sell level call yesterday as the market rallied to my initial 35100 sell level, before trading lower to my 34880 T/P level and I am still flat. Today, I will again be a seller on any rally higher to 34900/35150 with a 35305 stop.
Cash NASDAQ 100
In contrast to Monday, the NASDAQ led both the S&P and Dow lower yesterday as higher Bond Yields weighed heavily on Technology Stocks. The NDX has strong support from 14680/14580 where I will be a strong buyer with a wider 14445 stop. I will now lower my sell level to 15100/15220 with a tight 15305 stop.
June BUND
The Bund market continues to be tricky to trade. Yesterday, the Bund traded the whole of my narrow buy range for a now 158.30 average long position. I will now lower my T/P level to 158.70 while having no stop for now given the expected volatility surrounding the FOMC Minutes which will be released at 7.00 pm.
Gold Rolling Contract
No Change. I am still a buyer on any dip lower to 1888/1903 buy level with a lower 1875 tight stop.
Silver Rolling Contract
I am still flat and today I will continue to be a buyer from 23.20/23.80 with a lower 22.65 stop.
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