Despite U.S. 10-Year Treasuries hitting a 42-Month high of 2.94%, Equity Markets finished the day higher led by a 2.15% rise in the NASDAQ 100. Federal Reserve Bank of St. Louis President James Bullard said the central bank may pursue an interest-rate hike of 75 basis points, or 0.75%. He noted that a 50-basis-point increase is his base-case scenario for the Federal Open Market Committee’s May meeting… But Bullard added that he would not rule out a potentially larger bump. The Central-Bank President also remains optimistic about the domestic economy. He said economic output can move “above trend” in 2022 and 2023, indicating growth of 2.3% or more. Still, borrowing costs are expected to rise, which could weigh on the balance sheets of households and businesses. In turn, we could see analysts lower their estimates and outlooks for economic growth and earnings. Meanwhile, the U.S. Census Bureau released data for Housing Starts and Building Permits. For March, there were 1.793 million housing starts compared with the estimated 1.748 million and the prior revised figure of 1.788. In terms of Building Permits, the agency recorded a reading of 1.873 million versus the anticipated 1.820 million and February’s 1.865 million. This could suggest that while mortgage rates and home prices are pushing away prospective buyers, lower inventories are continuing to support elevated demand. Within the S&P 500, 10 of the 11 sectors finished higher. European Markets closed mixed. Germany’s Finance Minister said the country will spend $3.2 billion to build floating liquified natural gas terminals for importing more energy from Australia, Qatar, and the U.S. Russian Security Council Deputy Chairman Dmitry Medvedev said the country will bolster its military presence in the Baltic Sea if Finland and Sweden join NATO. Recent polling data shows French President Emmanuel Macron is anticipated to easily beat his opponent Marine Le Pen in next week’s election. In Asia, the People’s Bank of China said it would introduce more targeted measures to support domestic banks and the housing market. Chinese Health Minister Ma Xiaowei said the government will stick to its zero-tolerance COVID-19 policy to prevent the spread of the virus. Japanese Finance Minister Shunichi Suzuki said he may establish a meeting with U.S. officials to discuss improving the stability of Foreign Exchange Markets and the Yen. During a parliamentary testimony, Bank of Korea Governor nominee Rhee Chang-yong said he will focus on controlling inflation and household debt. Elsewhere, Oil fell 5.28% after the IMF cut its Global Economic Forecast, resulting in fears that demand for Oil and Gas will tumble, while Gold fell 1.5% after a volatile session.
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 315 points yesterday, and is now ahead by 1754 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 1.61% higher at a price of 4462.
The Dow Jones Industrial Average closed 500 points higher for a 1.45% gain at a price of 34,911.
The NASDAQ 100 closed 2.15% higher at a price of 14,210.
The Stoxx Europe 600 Index closed 0.3% higher.
Yesterday, the MSCI Asia Pacific Index rose 0.4%.
Yesterday, the Nikkei closed 0.69% higher at a price of 26,985.
Currencies
The Bloomberg Dollar Spot Index closed 0.4% higher.
The Euro closed 0.1% higher at $1.0789.
The British Pound closed 0.1% lower at 1.2997.
The Japanese Yen fell 1.7%, closing at $128.90.
Bonds
Germany’s 10-year yield closed nine basis points higher at 0.93%.
Britain’s 10-year yield closed nine basis points higher at 1.98%.
US 10 Year Treasury closed eight basis points higher 2.94%.
Commodities
West Texas Intermediate crude closed 5.28% lower at $102.32 a barrel.
Gold closed 1.50% lower at $1949.10 an ounce.
This morning on the Economic Front we have German PPI at 7.00 am, followed by Euro-Zone Trade Balance and Industrial Production at 10.00 am. Finally, we have U.S. Existing Home Sales at 3.00 pm and the Fed’s Beige Book at 7.00 pm.
Cash S&P 500
Thankfully we have had no sell level in any of the Equity Markets that I cover as I said a vertical rally can occur at any stage. It is too early to declare victory in that regard especially given the sell-off in both the NDX and S&P after the close, following more awful results from Netflix. The S&P managed to regain its 50-Day MA (4415) helping the market to rally 90 Handles to a late high at 4471 before selling off to sit at 4446 as I go to press. Earlier, the S&P traded lower to my 4380 buy level before rallying to my 4395 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 4408/4428 with a wider 4389 stop. The S&P will have strong resistance at 4496 which is the 200 Day MA. As a result I will be a small seller from 4493/4510 with a tight 4521 stop. A break and close over 4510 will be short-term bullish for at least a move higher to 4650.
EUR/USD
My Euro plan worked well with the market rallying to my 1.0805 T/P level on my latest 1.0770 long position and I am now flat. Today, I will again be a buyer on any dip lower to 1.0680/1.0740 with a wider 1.0595 stop. I still do not want to be short the Euro at this time.
March Dollar Index
The incredible weakness in the Japanese Yen which has now fallen near 10% over the past few weeks helped the Dollar rally to my second sell level at 100.95 for a now 100.70 average short position. I will leave my 101.41 stop unchanged while raise my T/P level to 100.45. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Cash DAX
I am still flat as the market never came close to yesterday’s buy range before accelerating higher into the New York close. I will now raise my buy level to 13950/14030 with a tight 13785 stop.
Cash FTSE
No Change. I am still a seller on any further rally to 7670/7730 with the same 7771 stop.
Dow Rolling Contract
My Dow plan worked well with the market trading lower early yesterday morning to my 34350 buy level before rallying over 600 points, hitting my too tight 34480 T/P level and I am now flat. This has been a nasty trading environment for Fund Managers’ as the rout in the Bond Market means Bond Investors are experiencing the worst drawdown ever following the insane QE Programme orchestrated by the Central Banks who are now sitting on paper losses that run into the Billions. In 2018, the 10-Year Treasury Note hit a high of 3.2% and the Fed reversed course knowing that the system could not take much higher rates. Yesterday’s 2.94% close means we are very close to this trigger point as the Fed does not want to have a stock market crash on their watch. My own view is the market will hold up until we get next month’s FOMC Meeting out of the way and then we will see. The Dow has support from 34550/34750 where I will be a small buyer with a 34395 tight stop. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
No Change. I am still aggressively long at an average price of 14327. The NDX rallied over 2% yesterday and I am now close to breakeven on this latest long position. Although we are trading lower this evening on the back of Netflix shares falling 17% I would not chase the NDX lower. Today, I will continue to have no stop on my long position while leaving my 14360 T/P level unchanged.
June BUND
The Bund traded the whole of yesterday’s buy range for a now 153.70 average long position. I will now lower my T/P level to 154.30 with no stop for now
Gold Rolling Contract
I am still flat. Thankfully we did not chase the price of Gold higher given its 1.5% fall yesterday. I will now lower my buy level to 1910/1925 with a tight 1897 stop.
Silver Rolling Contract
No Change. I am still a buyer on any dip lower to 24.10/24.70 with a lower 23.45 stop
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