Apart from the small rally in the Dow American Indexes closed lower across the board yesterday. The Russell 2000 again led the declines, closing lower by 1%. Fed President Loretta Mester said that inflation remains too high and that it could potentially take until 2025 to see it fall back down to the Fed’s 2% target. Economic weakness saw the 30-Year Mortgage Rate fall for a fourth straight week as recent banking sector turmoil drove treasury yields lower. As a result investors are expecting the U.S. Dollar to weaken further against most major currencies this year as the Federal Reserve approaches the end to its rate hike cycle that fuelled a rally for the Dollar over the last year. Ever since the Federal Reserve and its chairman, Jerome Powell, declared war on inflation more than a year ago, the labour market has been a thorn in the sides of policymakers and investors hoping to see some reprieve from the central bank’s policy tightening. Since March 2022, the Fed has raised rates nine separate times. As a result it started to see the economic repercussions – from housing to manufacturing – over the past year. The labour metrics kept pointing to a strong economy- in some cases, just days after several other economic indicators would say the opposite. And we had to dissect the government’s data with a stronger magnifying glass each time to try and uncover the truth of just how stable the labour market was. But on Tuesday, the labour market finally gave investors a reason to be optimistic about the rate-hike campaign ending. The U.S. Bureau of Labour Statistics’ (“BLS”) came out with its latest Job Openings and Labour Turnover Survey (“JOLTS”). This survey estimates the number of jobs available in the economy. It reported that the February job openings fell below 10 million for the first time since May 2021. February’s 9.93 million job openings declined by 642,000 from January’s downward-revised figure of 10.56 million (originally 10.82 million). Since the start of the year, job openings had their second-largest two-month decline on record. Job openings have dropped 1.3 million, year to date, only beaten out by early 2020 during the pandemic-related lockdowns. A contraction of this magnitude in job openings signals that the Fed’s tightening has finally reached the deepest parts of the economy. But more important, the Fed needs to pay attention to the overall trend in recent labour data. Slowing economic growth reported in the Institute for Supply Management’s Manufacturing Purchasing Managers’ Index earlier this week – combined with the latest job-openings figure – would signal that pricing pressures are easing and Powell’s plans to rebalance supply and demand are coming to fruition. Tomorrow’s Non-farm Payroll data will come under heavy scrutiny for further evidence of an easing labour market. The bottom line is that we are seeing more major trends pointing toward a sizable economic slowdown. This should give the Fed an easy exit ramp from its unprecedented rate-tightening cycle, paving the way for a market rally. Within the S&P 500 Index, seven of 11 sectors finished lower. European Markets closed lower. German First Quarter Economic Output is forecasted to grow by 0.1% after shrinking by 0.4% in the final quarter of last year. The Ifo institute said that purchasing power regained some traction as energy prices have fallen. Bank of England Chief Economist Huw Pill said that the central bank must be fully convinced that interest rates are restrictive enough to tame inflation. German Factory Orders rose for a third consecutive month, a promising sign for the region’s largest economy that has been struggling with falling goods’ demand. In Asia, the Reserve Bank of New Zealand announced a surprise 50-basis point rate hike despite recent signs of slowing economy activity and contrary to the recent pauses seen from the central banks of Canada and Australia. Japan’s Trade Minister declared his nation’s commitment towards the domestic production of advanced chips, pledging financial support to chipmaking firm Rapidus. Elsewhere, Oil fell 0.4% while Gold closed flat after a quiet 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.combryan@tradernoble.com for details
For anyone following my Platinum Service it made 120 points yesterday and is now ahead by 585 points for April after closing March with a gain of 6168 points, while 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 HEREHERE Please subscribe to this for new interview notification
Equities
The S&P 500 closed 0.25% lower at a price of 4090
The Dow Jones Industrial Average closed 80 points higher for a 0.24% gain at a price of 33,482.
The NASDAQ 100 closed 1.01% lower at a price of 12,967.
The Stoxx Europe 600 Index closed 0.16% lower.
Yesterday, the MSCI Asia Pacific rose 0.49%.
Yesterday, the Nikkei closed 1.68% lower at a price of 27,813.
Currencies
The Bloomberg Dollar Spot Index closed 0.4% higher.
The Euro closed 0.4% lower at $1.0902.
The British Pound closed 0.2% lower at 1.2458.
The Japanese Yen rose 0.2% closing at $131.30.
Bonds
Germany’s 10-year yield closed 7 basis points lower at 2.18%.
Britain’s 10-year yield closed 1 basis points higher at 3.43%.
U.S.10 Year Treasury closed 3 basis points lower at 3.31%.
Commodities
West Texas Intermediate crude closed 0.40% lower at $80.39 a barrel.
Gold closed 0.05% lower at $2020.10 an ounce.
This morning on the Economic Front we have German Industrial Production at 7.00 am, followed by U.K. Construction PMI at 9.30 am. The only other data of note is U.S. Weekly Jobless Claims at 1.30 pm.
Cash S&P 500
The S&P traded in a narrow range over the past 24 hours. I am still flat. Ahead of the long weekend I will continue to be a buyer on any dip lower to 4038/4053 with a lower 4023 ‘’Closing Stop’’. The S&P has resistance from 4120/4140 where I will be a small seller with a 4155 ‘’Closing Stop’’ level to 4040/4055 with a higher 4029 tight ‘’Closing Stop’’.
EUR/USD
The Euro had a small sell-off yesterday and I am still flat. Ahead of the long weekend I will now lower my Euro buy level to 1.0770/1.0850 with a lower 1.0695 wider ‘’Closing Stop’’. The Euro has resistance from 1.1060/1.1130. I will continue to be a seller in this range with the same 1.1185 ‘’Closing Stop’’.
June Dollar Index
I am still flat. The Dollar had a small rally yesterday, trading 40 points higher at 101.90 as I go to press. Given how oversold the Dollar is trading I will now raise my buy level to 100.50/101.20 with a higher 99.85 ‘’Closing Stop’’.
Cash DAX
The DAX was weak yesterday. I am still flat as the market never came close to my sell range. I will now lower my sell level to 15720/15820 with a lower 15935 ‘’Closing Stop’’.
Cash FTSE
The FTSE is trying to consolidate its large move higher from the end of March. Yesterday was the lowest price range in the FTSE for the year-to-date as the market traded in a 40 point range. With the Cash FTSE closed tomorrow and Monday I will not chase the market higher. Therefore, I will leave my 7490/7570 buy level unchanged with the same 7415 ‘’Closing Stop’’.
Dow Rolling Contract
The Dow outperformed the other American Indexes yesterday. I am still short at an average rate of 33325 with the same 33555 ‘’Closing Stop’’. Ahead of Non-Farm Payrolls tomorrow when the Cash Markets are closed for the Good Friday Holiday, I will now raise my exit level on this position to a small loss at 33380. I want to try and protect this week’s hard-earned gains ahead of the long weekend. If any of the above levels are hit, I will be back with a new update for my Platinum Service.
Cash NASDAQ 100
As expected, the NDX has traded heavy every day this week. This is no surprise given how severely overbought the market had become after rising 1400 points in the last week of March. The NDX has support from 12650/12800 where I will be an aggressive buyer with a 12535 ‘’Closing Stop’’. Today, I will continue to be a seller from 13280/13430 with a tight 13505 ‘’Closing Stop’’.
June BUND
I am still flat the Bund as the market missed yesterday buy range before having a nice 120-point rally into the close. The Bund has resistance from 139.00/139.80 where I will be a small seller with a 140.50 ‘’Closing Stop’’.
Gold Rolling Contract
No Change. Gold traded in a narrow range, and I am still flat. I will continue to be a small buyer on any dip lower to 1983/1997 with a higher 1971 ‘’Closing Stop’’.
Silver Rolling Contract
As I wanted to bank some points for yesterday’s Daily Commentary, I emailed my Platinum Members to exit their 23.75 long position at 24.95 and I am still flat. Today, I will again be a buyer from 23.70/24.50 with a 22.95 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 25.30.
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