Friday was an extremely volatile trading session as Equity Markets closed on their lows led by the 1.24% fall in the NASDAQ 100. Oil rising 6% did not help, leading to a massive 16% surge in the VIX. Equity Markets sold off on the fear of escalation in the Israel conflict over the weekend as the Israeli ground military moved to the Gaza Strip Border. The University of Michigan Survey for October was largely disappointing with sentiment, expectations and conditions all falling beneath expectations while the inflation expectations shifted higher. Delta Air Lines (DAL) reported quarterly earnings that exceeded analysts’ estimates. However, it also cut the upper end of its profit outlook for 2023. The cut was due to rising fuel prices and higher-than-expected maintenance costs. The company now expects adjusted earnings per share in the range of $6 and $6.25, still higher than analyst expectations of $6.03. Additionally, Delta lowered its projected free cash flow to $2 billion from $3 billion. The revised profit outlook is still better than expected, suggesting Delta’s fundamentals are not being significantly impacted by a slowdown in demand. Walgreens (WBA) missed its earnings expectations. It now forecasts annual adjusted profit earnings in a range of $3.20 to $3.50 per share, below the average estimate of $3.72 per share. But a proposed cost cut sparked 6%upward movement in its stock during mid-day trading Thursday. The company announced plans to cut at least $1 billion in costs in 2024. The plan will include shutting down stores and reducing its capital expenditure by roughly $600 million. Consumer prices rose at a steady pace for the second consecutive month. The core Consumer Price Index (“CPI”), which excludes food and energy, rose by 0.3% month over month in September, while the headline CPI rose by 0.4% month over month. Year over year, core CPI and headline CPI rose 4.1% and 3.7%, respectively. The data highlights the effects of a strong labour market on consumer demand, potentially keeping inflation above the Fed’s 2% target. The recent CPI data continues to leave investors guessing about the Federal Reserve’s highly anticipated November rate-hiking decision. The Federal Reserve has maintained a data-centric approach ahead of its next meeting, and the data from September did not reveal much. Increases in both the core Consumer Price Index (“CPI”) and headline CPI have left the annual rate of inflation well above the Fed’s 2% target. Meanwhile, the recent readings may lead to another interest-rate hike before year’s end. An increase in prices has been a particular concern for Fed Chair Jerome Powell, who has led the monetary-tightening campaign over the past 19 months. The pressure on the services sector from a tight labour market will be heavily scrutinised by Fed officials as they collect additional data ahead of its upcoming meeting. European Markets closed lower. Despite the lack of downward pressure that plagued its economy in July, especially in large-scale industrial action, the U.K.’s economic growth remained weak in August. Gross domestic product (“GDP”) rose only 0.2% following a 0.6% contraction in July. However, the waning economic pulse suggests that the economy is losing momentum due to high borrowing costs. The Bank of England predicts 0.1% growth in the third quarter. Its economy is teetering, with a contraction in the quarter possibly signalling it is already in a recession. Further adding to the pessimistic outlook, the International Monetary Fund (“IMF”) predicts that the U.K. will place at the bottom for growth among G-7 nations. Elsewhere both Oil and Gold surged on Friday, closing higher by 5.77% and 3.1% respectively.
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 made 637 points on Friday and is now ahead by 2159 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 0.50% lower at a price of 4327.
The Dow Jones Industrial Average closed 39 points higher for a 0.12% gain at a price of 33,670.
The NASDAQ 100 closed 1.24% lower at a price of 14,995.
The Stoxx Europe 600 Index closed 0.98% lower.
Last Friday, the MSCI Asia Pacific closed 0.5% higher.
Last Friday, the Nikkei closed 0.55% lower at a price of 31,315.
Currencies
The Bloomberg Dollar Spot Index closed 0.14% higher.
The Euro closed 0.8% lower at $1.0508.
The British Pound closed 1.2% lower at 121.41.
The Japanese Yen fell 0.3% closing at $149.56.
Bonds
Germany’s 10-year yield closed 3 basis points higher at 2.74%.
Britain’s 10-year yield closed 5 basis points higher at 4.39%.
U.S.10 Year Treasury closed 7 basis points lower at 4.62%.
Commodities
West Texas Intermediate crude closed 5.77% higher at $87.69 a barrel.
Gold closed 3.1% higher at $1932.10 an ounce.
This morning on the Economic Front we have Euro-Zone Trade Balance at 10.00 am. This is followed by U.S. New York Empire State Manufacturing Index at 1.30 pm. Finally, we have a speech from Fed Member Harker at 9.30 pm.
Cash S&P 500
Friday’s aggressive sell-off had nothing to do with Bond Yields or Bank earnings as they are actually working in favour of the bull thesis but is clear that the Geo-Political risk is now front and centre. Markets hate unpredictability as they wait for the imminent invasion by Israel on Gaza. Saudi Arabia putting the Israel Agreement on ice is not helping and I would not be surprised that this was Hamas’ objective to begin with to prevent that Agreement from happening. Whatever happens now is guaranteed to be a vast human tragedy with lots of innocents killed and a major humanitarian crisis. The VIX rising 16% on Friday shows a massive move to protection. The only surprise was that the S&P did not fall further. Friday’s move lower saw the S&P close below its 5 EMA and 20 Day Moving Average. The bottom line is Geo-Political risk events are never pleasant and have that big element of unpredictability. However, it has been a good 48 hours for my Platinum Service given the six updated emails sent to my Platinum Members since Thursday’s Daily Commentary. Shortly after I posted the S&P traded lower to my 4364-buy level before rallying to my revised 4375 T/P level. Subsequently, I did three more S&P deals triggering a gain of 360 points and I am now flat. The S&P has support from 4292/4310 where I will again be a buyer with a 4279 ‘’Closing Stop’’.
EUR/USD
The Euro sold off the whole of Thursday’s buy range for a now 1.0525 average long position. I will leave my 1.0425 ‘’Closing Stop’’ unchanged while lowering my T/P level to 1.0580. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
September Dollar Index
The Dollar has rallied 0.7% since Thursday. This move higher has me short at 106.60. I will add to this position at 107.20 with a now 107.75 higher ‘’Closing Stop’’. I will now raise my T/P level to 106.10. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
My DAX plan worked well as the market sold off to my 15265-buy level before rallying 160 points to a high at 15430 on Friday morning. Unfortunately, I covered this position too early at my revised 15301 T/P level and I am now flat. Thankfully I did not buy the market again given the aggressiveness of Friday’s sell-off. This morning as I go to press the DAX is trading lower at 15150. We have strong support from 14860/14960 where I will be an aggressive buyer with a 14725 wider ‘’Closing Stop’’. If this view changes I will be back with a new update for my Platinum Members.
Cash FTSE
I am still flat as the FTSE continues to ignore the volatility in both the DAX and American Indexes. I will continue to be a buyer on any dip lower to 7480/7550 with the same 7405 ‘’Closing Stop’’.
Dow Rolling Contract
My Dow plan worked well as the market traded lower to my 33650-buy level before rallying to a high on Friday at 33957. This move higher saw my 33750 revised T/P level triggered and I am still flat as I did not do any more trades since this exit. This morning the Dow is trading higher from Friday’s close at 33710 as I go to press. We have support from 33380/33530 where I will again be a buyer with a 33195 wider ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 33690. If this view changes I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
After the NDX hit my 15120-buy level I exited this trade at my revised 15198 T/P level. Subsequently, I emailed my Platinum Members to re-buy the NDX at 15050. I am still long, and I will add to this position at 14900. I will have a lower 14795 ‘’Closing Stop’’ on this position. My T/P level is at 15180. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
My Bund plan worked well with the market selling off hard on Thursday to my 129.12 buy level with a 128.71 low print. Subsequently we saw flight to Bond Safety on Friday, enabling me to cover this long position at my 129.75 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 128.50/129.20 with the same 127.95 ‘’Closing Stop’’.
Gold Rolling Contract
Last week again proved why you can never be short Gold as you need some Gold in your portfolio for political insurance. Gold has rallied over $115 off the post NFP low print of 1810. As I am still long Silver, I am going to stay flat Gold until the market settles down. I do not want to be short and I have no interest in buying Gold at these levels.
Silver Rolling Contract
No Change. I am still long Silver from five 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 22.75. If this view changes, I will be back with a new update for my Platinum Members.
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