Despite a much stronger than expected Non-Farm Payrolls Report on Friday, U.S. Equity Markets reversed earlier losses to close higher across the board. The NASDAQ 100 led the gains, closing higher by 1.70% while the VIX ended the session lower by 6% at a price 0f 17.45. Clorox (CLX) shares fell nearly 8% during midday trading, reaching their lowest level since June 2022. The consumer staples company revealed the financial impact of an August cyberattack that shut down production at various U.S. factories. The attack led to product shortages and a substantial impact on sales and profits for the first quarter of fiscal year 2024. The company now expects organic sales for the quarter to decline as much as 26%, compared with the mid-single-digit growth it had expected. Additionally, the attack’s impact has led to downgrades and price-target cuts from several Wall Street firms. BlackBerry (BB) is spinning off an Internet of Things (“IoT”) division from its core cybersecurity operations through an initial public offering (“IPO”). The move will enable shareholders to assess the performance of BlackBerry’s core business separately, while allowing each business to pursue its unique strategy. BlackBerry initiated a strategic review of its options with advisers and determined an IPO was the best choice for its IoT division. The split is expected to take place in the first half of its next fiscal year. Third-quarter job cuts for U.S. companies fell 22% quarter over quarter to 146,305. That is the fewest job cuts in a quarter since last year. Notably, in the volatile technology sector, layoffs decreased to the lowest level since June 2022. The report suggests the labour market has remained resilient despite the Federal Reserve’s aggressive monetary-tightening campaign. Additionally, companies announced plans to fill over half a million seasonal positions in September, marking a 54% year-over-year increase. Republican Kevin McCarthy became the first speaker ever voted out of the U.S. House of Representatives. The unprecedented move by members of his own party has raised concerns about dysfunction in Washington. In September, Moody’s, the only remaining major credit grader to give the U.S. a top rating, shared doubts about the U.S.’s “governance.” This loss in leadership now only worsens these doubts. Plus, the U.S. is facing a funding deadline in November to prevent a government shutdown. McCarthy’s removal from office complicates this situation and any future congressional decisions, as there is no clear successor in sight. Chicken prices in the U.S. just reached new highs, as well as chicken-producer profit margins. With consumers shifting from more expensive proteins like beef and pork to poultry due to rising inflation, producers such as Tyson Foods (TSN) and Pilgrim’s Pride (PPC) have cut production to boost their margins, only exacerbating the problem. Chicken consumption in the U.S. is set to hit more than 100 lbs. per person this year for the first time ever. And beef and pork are expected to see their lowest consumption levels since 2018 and 2015, respectively. While the move bodes well for earnings, it will continue to apply financial pressure on an already struggling consumer. European Markets closed higher. The World Trade Organization (“WTO”) has halved its global goods trade growth forecast in just six months, from its 1.7% year-over-year gain forecast in April to just 0.8%. The revised growth is largely due to high inflation in the U.S. and Europe, the prolonged war in Ukraine, and China’s slow recovery. The slowdown involves many countries and categories of goods – from iron and steel to telecom equipment. Despite the revision for this year, the WTO predicts a 3.3% increase in growth for 2024. It acknowledges there are risks with its forecast and that uncertainty in the global landscape could make matters worse. Euro-Zone Retail Sales fell more than expected in August, dropping by 1.2% month over month and 2.1% year over year. Economists had forecast a decline of 0.3% and 1.2%, respectively. The monthly decrease was due to a significant drop in mail orders and fuel sales. Dwindling food, drink, and tobacco sales also contributed to the decline. Overall, the slump in retail sales suggests that high inflation is taking its toll on consumers’ wallets and hurting demand. In Asia, the Nikkei was closed today for a bank holiday. Elsewhere, Oil rose 0.58% and Gold by 0.4%. However, on the back of the Hamas attack on Israel both Commodities are trading higher by a further 3.5% and 1% respectively this morning.
To mark my 2875th 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 1190 points on Friday and is now ahead by 1054 points for October after closing September with a small gain of 228 points, after finishing August with 1485 points gain following a small gain of 285 points gain in July, after closing June with a gain of 2683 points. May closed with a gain of 3205 points. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made 3164 points in February, 4687 points in January 2054 points in December, 4789 points in November and a record 9619 points last October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1900 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 1.18% higher at a price of 4308.
The Dow Jones Industrial Average closed 268 points higher for a 0.87% higher at a price of 33,407.
The NASDAQ 100 closed 1.70% higher at a price of 14,973.
The Stoxx Europe 600 Index closed 0.82% higher.
This morning, the MSCI Asia Pacific closed 0.8% lower.
Last Friday, the Nikkei closed 1.80% higher at a price of 31,075.
Currencies
The Bloomberg Dollar Spot Index closed 0.27% lower.
The Euro closed 0.6% higher at $1.0586.
The British Pound closed 0.7% higher at 122.37.
The Japanese Yen fell 0.2% closing at $149.33.
Bonds
Germany’s 10-year yield closed 2 basis points lower at 2.91%.
Britain’s 10-year yield closed 5 basis points lower at 4.59%.
U.S.10 Year Treasury closed 8 basis points higher at 4.80%.
Commodities
West Texas Intermediate crude closed 0.58% higher at $82.79 a barrel.
Gold closed 0.4% higher at $1832.10 an ounce.
This morning on the Economic Front we already had the release of German Industrial Production which fell 0.2% versus -0.1% expected. Due to the U.S. Bank Holiday the only other data of note is Euro-Zone Sentix Investor Confidence which will be released at 9.30 am.
Cash S&P 500
Following a nice reversal in Treasury Yields and the U.S. Dollar, the S&P surged on Friday rallying over 110 Handles off its post 4209.50 NFP spike lower. After five consecutive down weeks and the most oversold conditions for the year-to-date the market was ripe for a rally especially as Asset Managers had severely cut their long exposure over the preceding two months. The S&P held its 200 Day Moving Average (4201) as speculated in Thursday’s Daily Commentary. Remember the old adage ‘’a market that cannot sell-off on bad news has to be respected’’ certainly proved to be correct on Friday as yet again one short position after another was taken out. With the positive seasonality chart about to kick in, we could be in for a really bullish 4th Quarter. I know that this correction has been persistent and relentless given my stubbornness in not being short, but Friday proved that the chart signals that I follow were severely oversold and pointing to a mega rally. Bears were never able to break key support levels as shown by the Quarterly 5 EMA which was tagged as it held its support. The VIX hit an important trendline at 22 before selling off aggressively on Thursday and Friday. The S&P had its most powerful up day that we have seen in a long while and it happened at key levels where bears had every excuse to make new lows but thankfully failed to do so. My S&P plan worked well over the past two trading sessions helped by the seven updated emails that I sent to my Platinum Members. My Platinum Service generated 565 points on the four S&P trades that I sent, and I am now flat. This morning the S&P is trading lower on the back of the Middle East Conflict. The S&P has support from 4253/4271 where I will be a strong buyer with a 4239 wider ‘’Closing Stop’’. I still do not want to be short the S&P at this time.
EUR/USD
A single digit Daily Sentiment Index and a 28 print in the 14-Day RSI finally led to the expected rally in the Euro. The Euro hit a high at 1.0600 on Friday before having a small sell-off this morning, sitting at 1.0554 as I go to press. The Euro hit my revised 1.0540 T/P level on my latest 1.0510 average long position before selling off on Friday to my second buy level at 1.0490 post NFP sell-off. Subsequently, we rallied to my 1.0550 T/P level and I am now flat. Today, I will again be a strong buyer from 1.0460/1.0530 with a lower 1.0395 ‘’Closing Stop’’.
September Dollar Index
I am still flat the Dollar which is trading 50 points lower from where I last marked prices on Thursday morning. I will now lower my sell level to 106.70/107.40 with a lower 108.05 ‘’Closing Stop’’.
Cash DAX
The DAX finally rallied to my 15280 T/P level late Friday on my 15245 average long position and I am still flat. This morning, the DAX is trading lower at 15170. We have support from 15040/15110 where I will again be a buyer with a lower 14975 ‘’Closing Stop’’.
Cash FTSE
No Change. I am still long the FTSE at an average rate of 7530 with the same 7445 ‘’Closing Stop’’. The FTSE managed to close over 7500 which is positive. Today, I will continue to leave my T/P level unchanged at 7560. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
It took a while but finally the Dow had a nice rally on Friday. The Dow hit a high at 33556 late Friday before having a small sell-off in the close. This initial move higher saw the Dow hit my 33505 revised T/P level as emailed to my Platinum Members on my 33325 average long position and I am now flat. This morning the Dow is trading lower at 33220. We have support from 32900/33130 where I will again be a strong buyer with a 32795 tight ‘’Closing Stop’’. Given the strong possibility of war escalating in the Middle East it will be interesting to see what the price action is in the American Indexes today. Although the Bond Markets are closed for the Columbus Day Holiday, it is a normal trading session for the stock market. The trading environment has just got more complicated with the Hamas invasion of Israel on Saturday morning with Oil trading higher by 4% as I go press. If I am taken long the Dow, I will have a T/P level at 33290.
Cash NASDAQ 100
My NDX plan worked well as the market traded lower to my 14640 buy level before rallying to my revised 14723 T/P level. Subsequently, I emailed my Platinum Members to buy the NDX again at a price of 14590 which was filled post the NFP release, before rallying to my 14782 T/P level and I am now flat. Friday’s 1.70% rally in the NDX saw the market hit a high at 15021 before selling off overnight, sitting at 14890 as I go to press. The 50-Day Moving Average for the NDX comes in at 15108. The market should encounter strong resistance at this price level initially. However, I have no interest in being short. This morning, I will be an aggressive buyer form 14700/14850 with a 14595 tight ‘’Closing Stop’’.
December BUND
The Bund never came close to Thursday’s buy range, and I am still flat. This morning the Bund is trading higher at 128.50. I will now raise my buy level to 127.10/127.80 with a higher 126.35 ‘’Closing Stop’’.
Gold Rolling Contract
Gold traded lower to my second buy level at 1815 for a 1823 average long position. Post Friday’s NFP, Gold hit a low at 1810 before rallying to my revised 1827 T/P level and I am now flat. Frustratingly, Gold is trading higher at 1852 this morning. Gold has support from 1823/1838 where I will be a small buyer with a 1809 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. I am still long Silver from three weeks ago at 24.05. In a change of strategy, I will have no stop or no T/P level on this position. This morning Silver is trading higher at 21.85. If this view changes, I will be back with a new update for my Platinum Members.
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