Despite a much higher expected PPI print both the Bond Yields and U.S. Dollar weakened. 10-Year Treasuries have now fallen over 30 basis points since last Friday’s much higher than expected Non-Farm Payrolls. U.S. Equity Markets saw plenty of two-way price action before having a nice rally into the close, led by the 0.72% gain in the NASDAQ 100. The across-the-board late rally saw the VIX close lower by 5% having been higher by 4% post the release of PPI. German sandal maker Birkenstock began trading under the symbol “BIRK” yesterday morning. The company priced its initial public offering (“IPO”) at $46 per share. The move is aimed to raise as much as $1.48 billion, which would value the company at roughly $8.64 billion. This IPO will be one of the last major listings of the year in the U.S., and its performance could set the tone for the 2024 IPO market. Pepsi Co (PEP) exceeded its earnings expectations in its most recent quarter, and it also raised its growth forecast as consumers have coped with higher prices on its products. While volume fell, overall revenue rose due to these price hikes. Plus, the company has remained resilient against appetite-suppressing drugs like Ozempic. Pepsi Co says it has not seen an impact on its sales so far but will be closely monitoring consumer trends. If anything changes, it is prepared to adapt its package sizes and focus on portion control. The company remained optimistic about its outlook and ability to deliver solid results. Atlanta Federal Reserve President Raphael Bostic doubled down on his stance that further interest-rate hikes are not necessary. He emphasised that the current rate is sufficiently restrictive to bring inflation down to the central bank’s 2% target, while Bostic did acknowledge that an unexpected change in economic outlook could spark another increase, he thinks that is unlikely. Bostic is not alone in this opinion, either. There is a growing sentiment among top Fed officials that the recent surge in Treasury yields may reduce the need for further monetary-policy tightening. According to a Federal Reserve Bank of New York survey, U.S. consumers expect slightly higher inflation and tighter credit conditions over the next few years. Overall, the survey revealed that sentiment is worsening among average Americans. They now expect inflation to be 3% in three years, which is up from the previous month’s 2.8% and the highest reading in nearly a year. And for the one-year forecast, they are expecting inflation of 3.7% – the highest reading in three months. Additionally, the perceived likelihood for missing a minimum debt payment over the next three months rose to 12.5%, the highest reading since May 2020. The survey highlights consumers’ ongoing concerns about financial stability and the damage caused by inflation. European Markets again closed higher. European Central Bank (“ECB”) Governing Council member Francois Villeroy de Galhau recently stated that there is no monetary justification for increasing reserve requirements for banks. His comments come after some officials had suggested increasing the requirement, including Austria’s Robert Holzmann who suggested an increase as high as 10%. The current system requires banks to deposit only 1% of select liabilities at the ECB. Though there are proponents on both sides of the debate, others, such as Dutch central bank chief Klaas Knot, believe further analysis is needed before any decisions are made. In Asia, China is reportedly considering issuing at least 1 trillion yuan, or $137 billion, of additional sovereign debt. These funds would be spent on infrastructure projects and could potentially raise the year’s budget deficit well above its 3% cap. China’s move to stimulate its economy is seen as an effort to meet its official gross domestic product (“GDP”) growth target of 5% for the year. While the impact to GDP is estimated to be a mere 0.7%, this stimulus would be seen as a positive message given the country’s tight fiscal conditions and worsening real estate sector. Elsewhere, Oil fell 2.88% while Gold closed higher by 0.5% following another quiet session.
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 was flat yesterday and is none of my calls were hit and is still ahead by 1522 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 0.43% higher at a price of 4376.
The Dow Jones Industrial Average closed 65 points higher for a 0.19% higher at a price of 33,804.
The NASDAQ 100 closed 0.72% higher at a price of 15,241.
The Stoxx Europe 600 Index closed 0.17% higher.
Yesterday, the MSCI Asia Pacific closed 0.5% higher.
Yesterday, the Nikkei closed 2.59% higher at a price of 31,936.
Currencies
The Bloomberg Dollar Spot Index closed 0.20% lower.
The Euro closed 0.1% higher at $1.0617.
The British Pound closed 0.2% higher at 123.12.
The Japanese Yen fell 0.3% closing at $149.10.
Bonds
Germany’s 10-year yield closed 4 basis points lower at 2.71%.
Britain’s 10-year yield closed 16 basis points lower at 4.34%.
U.S.10 Year Treasury closed 7 basis points lower at 4.56%.
Commodities
West Texas Intermediate crude closed 2.88% lower at $83.49 a barrel.
Gold closed 0.5% higher at $1874.10 an ounce.
This morning on the Economic Front we have U.K. Trade Balance, Industrial Production and GDP at 7.00 am. This is followed by Bank of England Credit Conditions at 9.30 am. Next, we have the ECB’s Minutes from the September Meeting at 12.30 pm. At 1.30 pm we have U.S. CPI and Weekly Jobless Claims. Finally, we have a 30 Year Treasury Bond Auction at 6.00 pm and the Monthly Budget Statement at 7.00 pm.
Cash S&P 500
Wednesday was a frustrating session as the S&P missed my 4343-buy level by 2 handles, before rallying 40 Handles to sit at 4385 as I go to press. It is no surprise that the S&P has surged given the charts that I follow were at their most oversold levels in many years. The $NYSI had it most lengthy oversold stochastics in many years. The Quarterly 5 EMA held in September having been tested a number of times last month. In the last 50 years there have been just two times that the Quarterly 5 EMA has been broken for two or more years. The successful test of the 200 Day Moving Average probably means the low is in for the year at last Thursday’s 4201 print. Incredibly the charts are suggesting that a move to the upper trendline in the S&P suggests a move higher to 5400/5800 over the coming months. I know this is insane but as I have said many times if the market cannot break on the Highest inflation in decades and Bond Yields at a 23-year high what else can knock this market. The war in Israel is now seen as bullish. With Asset Managers and CTA’s so short this melt up in stocks will continue. Ahead of CPI this afternoon, I will now raise my S&P buy level to 4347/4365 with a higher 4335 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 4382.
EUR/USD
Despite the higher-than-expected PPI print, the Euro traded in a narrow range yesterday and I am still flat. Today, I will continue to be a buyer on any dip lower to 1.0500/1.0570 with the same 1.0425 ‘’Closing Stop’’.
September Dollar Index
No Change. Just like the Euro above, the Dollar also traded in a narrow range, and I am still flat. I will now lower my sell level to 106.35/106.95 with a lower 107.55 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 105.90.
Cash DAX
The DAX hit a high yesterday at 15485 before having a small sell-off into the close. I am still flat. A head of this afternoon’s ECB Minutes from last month’s meeting I will not chase the DAX price higher. The DAX has strong support from 15190/15280 where I will continue to be an aggressive buyer with the same wider 15095 ‘’Closing Stop’’. If this view changes I will be back with a new update for my Platinum Members.
Cash FTSE
Despite Gilt Yields closing lower by 16 basis points yesterday, the FTSE could not hold on to its morning gains, closing unchanged on the day. I am still flat the FTSE and will not chase the market higher from here. Therefore, I will continue to be a buyer on any dip lower to 7480/7560 with the same 7405 ‘’Closing Stop’’.
Dow Rolling Contract
The Dow missed yesterday’s buy range by 30 points before a late rally saw the market close at its 200 Day Moving Average at a price 33804. Today, I will now raise my buy level to 33400/33650 with a higher 33295 ‘’Closing Stop’’ Despite the key resistance at 33800, I have no interest in being short the Dow. If this view changes I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
For the second consecutive trading session, the NDX closed above its 50 Day Moving Average (15073) and I am still flat as the market never came close to yesterday’s buy range. I will now raise my buy level to 15000/15150 with a tight 14895 ‘’Closing Stop’’.
December BUND
Despite a higher-than-expected U.S. PPI print, the Bund surged for the second consecutive session, trading at 129.80 as I go to press. This move higher sees Bund Yields lower by 25 Basis points on the week. I am still flat the Bund. I will now raise my buy level to 128.50/129.20 with a higher 127.95 ‘’Closing Stop’’.
Gold Rolling Contract
The weaker Dollar saw Gold continue to build value above last Friday’s 1810 low print. I am still flat. Ahead of CPI, I will not chase Gold higher, leaving my 1833/1848 buy level unchanged with the same 1819 ‘’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 22.02. If this view changes, I will be back with a new update for my Platinum Members.
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