U.S Equity Markets closed mostly lower yesterday despite PPI dropping more than expected and further strengthened the Federal Reserve’s dovish narrative for rate policy. Although the NASDAQ 100 closed higher by 0.42% the Small Cap Russell 200 fell 2% as bank stocks continue to get pummelled following the worries over Credit Suisse whose shares closed lower by 14% in New York. Retail Sales for February fell 0.4% from January’s big gain, as economic activity continues to be volatile, while the New York State Manufacturing Survey showed worsening conditions overall but a softening in the prices-paid component – or producer prices. Investors continue to be split on what action the Fed will take with interest rates next week, but most are still predicting rate cuts by the year’s end. Within the S&P 500 Index, six of the 11 sectors finished lower. European Markets got slammed. Euro-Zone Industrial Production for January improved from the month prior, suggesting that the manufacturing sector may be rebounding. The ECB is still reportedly leaning toward a 50-basis-point rate hike this afternoon, according to Reuters. This against a background of crashing Bond Yields. The Ifo Institute’s latest economic update showed Germany’s economy stagnating this year and even falling into a minor contraction. U.K. Chancellor of the Exchequer Jeremy Hunt delivered his first budget yesterday, which included new business investment, an extension of the energy price cap, an expansion of early childhood care, and other tax measures. In Asia, Bank of Japan said that Japanese financial institutions have sufficient capital buffers and liquidity to adequately handle any losses caused by external factors, including the collapse of the U.S.’s Silicon Valley Bank. The Chinese economy experienced mixed results as industrial production came in below expectations, but retail sales and real estate saw a boost in output. Elsewhere, Oil fell 4.22% while Gold closed 0.61% higher after a volatile session.
To mark my 2750th 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 270 points yesterday and is now ahead by 3336 points for March after finishing February with a gain of 3164 points, after closing January with a gain of 4687 points, while finishing December with a gain of 2054 points. November ended with a gain of 4789 points, while finishing October with a record gain of 9619 points, making 6660 points in September, after closing August with a gain of 2228 points, having made 2660 points in July, following a gain of 3371 points in June. The Service made 3651 points in May, after making 762 points in April, following a gain of 5883 points in March. The Platinum Service made an impressive 5324 points in February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss. 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 0.73% lower at a price of 3892
The Dow Jones Industrial Average closed 280 points lower for a 0.87% loss at a price of 31,874.
The NASDAQ 100 closed 0.42% higher at a price of 12,251.
The Stoxx Europe 600 Index closed 3.01% lower.
Yesterday, the MSCI Asia Pacific rose 0.55%.
Yesterday, the Nikkei closed 0.03% higher at a price of 27,229.
Currencies
The Bloomberg Dollar Spot Index closed 1.20% higher.
The Euro closed 1.2% lower at $1.0585.
The British Pound closed 1.3% lower at 1.2051.
The Japanese Yen fell 0.1% closing at $133.44.
Bonds
Germany’s 10-year yield closed 23 basis points lower at 2.18%.
Britain’s 10-year yield closed 15 basis points lower at 3.32%.
U.S.10 Year Treasury closed 18 basis points lower at 3.46%.
Commodities
West Texas Intermediate crude closed 4.22% lower at $68.32 a barrel.
Gold closed 0.61% higher at $1918.10 an ounce.
This morning on the Economic Front we have no data of note from either the U.K or the Euro-Zone. At 12.30 pm we have U.S. Weekly Jobless Claims, Housing Starts and the Philly Fed Manufacturing Survey. At 1.15 pm we have the ECB Rate decision where a 50-basis point rate hike is expected. Finally, at 1.45 pm we have the Lagarde Press Conference. 12.45 pm
Cash S&P 500
I cannot remember the last time a Central Bank increased interest rates in the midst of a Global Banking Crisis and crashing Bond Markets. With the German Bund closing at 2.18% last night the market is voting with its feet to leave rates alone instead of running the serious risk of causing much wider damage to an already fragile situation. Lagarde and Powell have got to be the two worst heads of Monetary Policy ever and that is saying something given what has gone on before. Late Tuesday, Moodys downgraded the entire U.S. Banking Sector to negative. One day later rumours of the demise of Credit Suisse saw its shares fall 20%. The ECB needs to take a pause today and not hike rates giving the Fed the excuse to follow suit when it meets next week. Inflation is already coming down and there is no point in risking a systemic event when the financial sector is already freezing up. Adding to the fear is the Fear & Greed Index which closed last night at 20 which is a reading of Extreme Fear. Yesterday my S&P plan worked well. Yet again we needed patience as after the market traded the whole of my buy range for a 3880 average long position we made a low at 3831 before rallying to my revised 3895 T/P level shortly after the close and I am now flat. I am encouraged by the positive price action in the NASDAQ 100. The S&P has support from 3845/3865 where I will again be a buyer with a 3829 ‘’Closing Stop’’. I still do not want to be short the market at this time.
EUR/USD
The Euro got slammed yesterday, trading the whole of my buy range for a now 1.0670 average long position. I am still long as I have now lowered my exit level to 1.0545 ‘’Closing Stop’’. I will have a T/P level at 1.0740. If any of the above levels are hit I will be back with an update for my Platinum Members.
June Dollar Index
The Dollar surged yesterday, eventually closing higher by 1.20%. This move higher has me short at an average rate of 104.20 with the same 105.15 ‘’Closing Stop’’. I will now raise my T/P level to 103.70. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
The News of the potential demise of Credit Suisse saw the DAX get hit hard yesterday, trading the whole of my buy range for a 14800 average long position. As I had too many open positions, I covered this trade too early at 14830 and I am still flat. The DAX has now fallen over 1000 points in the past week. It is short-term oversold as a result. We have further support from 14630/14730 where I will again be a buyer with a 14495 wider ‘’Closing Stop’’.
Cash FTSE
The FTSE got hammered over the past 48 hours, down over 10% from its recent highs last month. The FTSE made new lows for 2023, trading well outside its Daily Bollinger Band but showing a positive divergence. The initial move lower had me long at an average rate of 7520 before stopping me out of this position at 7415. Even though I was stopped out of this position, the late rally has produced a positive divergence. The FTSE has support from 7280/7360 where I will again be a buyer with a wider 7195 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 7430.
Dow Rolling Contract
Another scary day in the Dow. When I went to bed early Wednesday morning London time the Dow was trading higher at 32180. You can imagine my shock when I woke up to see the Dow trading at 31550 on the back of the Credit Suisse disaster. This move lower had me long at an average rate of 31775, before rallying to my revised 31890 T/P level as emailed to my Platinum Members and I am now flat. The Dow saw plenty of two-way price action before a late 150-point rally into the close. Despite the Bank Index trading on the floor the Dow is actually holding in reasonably well. We have support from 31400/31650 where I will again be a buyer with a 31145 ‘’Closing Stop’’. Given how oversold the technicals are I still do not want to be short the market at this time.
Cash NASDAQ 100
The one comfort during yesterday’s carnage was the behaviour of the NASDAQ 100. The NDX had every chance to break lower but any sell-off is being bought aggressively by investors. After the NDX traded the whole of my buy range for a 12055 average long position I emailed my Platinum Members to exit any long position at 12135. Subsequently, I bought the NDX again at 12070 before the market rallied to my 12210 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 11920/12070 with a lower 11795 ‘’Closing Stop’’.
June BUND
Wow!! This incredible Bond volatility continues with 400-point ranges now the norm. This is reminiscent of the Italian Bond (BTP) of the 1990s when the BTP had an average 500-point daily range. As I had so many positions the same way I waited to sell the Bund which I did at the top of my range for anow 136.20 short position. I am still short with a higher 137.75 ‘’Closing Stop’’. I will now raise my T/P level to 135.40. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Unfortunately, Gold made a low at 1885 just missing my initial 1880 buy level before rallying to an afternoon high at 1937. Subsequently. Gold fell $20 into the close and I am still flat. Ahead of today’s ECB Meeting I will continue to be a buyer on any dip lower to 1875/1890 with a higher 1859 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. Silver traded again traded in a narrow range since I posted 24-hours ago. Silver is unchanged at 21.90 as I go to press. The ferocity of the move off last week’s 18.80 low print would suggest that the low for Silver is now in the market. I am glad that I was an aggressive buyer for my Pension Fund last week. I will leave my stop unchanged on this position to 20.45 while I will continue to have no T/P level. If this view changes I will be back with a new update for my Platinum Members.
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