U.S. Equity Markets were choppy and mixed on Tuesday with the macro focus on the further plunge in New York Community Bancorp (NYCB) shares, stoking banking/CRE fears and weighing on the regional banks more broadly. Treasury Secretary Yellen was in the Senate, where she said she has concerns over commercial real estate, noting the FSOC is currently focused on it. Meanwhile, China stocks outperformed with more momentum around state support and selling restrictions. Treasuries rallied amid the banking fears in a data-light US session; the decent 3yr auction prefaced the 10yr and 30yr offerings on Wednesday and Thursday, respectively. In FX, the Dollar was sold broadly through the US session as yields fell, with EUR/USD recovering off a fresh Year-To-Date low, while the Australian Dollar outperformed after the RBA maintained its hawkish guidance after holding rates unchanged at a time when many central banks are softening their guidance. Oil prices were firmer, aided by the softer Dollar, but settled off highs amid promising geopolitical updates in the Middle East, where Hamas has given a response to a hostage release agreement which intermediaries say gives them confidence an agreement can be reached. Fed voter Mester (hawkish) in a speech, said monetary policy is in a good place, where the strength in the labour market and strong spending data give the Fed the opportunity to keep rates where they are while it gathers more evidence that inflation “truly is on a sustainable and timely path back to 2 percent.” The Cleveland Fed President, who retires in June, said if the economy evolves as expected she believes cuts can occur “later this year”, albeit her base case is that the cuts are made at a “gradual pace”, but potentially at a faster pace “if downside risks materialise”. On the other hand, Mester warned that if inflation appears to be stalling above target, “we would have the opportunity to maintain a restrictive stance for longer.” In a set of post-speech comments to journalists, Mester said she does not want to offer timing on a rate cut, repeating that she sees no need to rush, but she clarified that she still leans towards three rate cuts in 2024. On the balance sheet, she said the Fed should not rule out asset sales, whilst also saying she expects balance sheet run-off to slow before being stopped. Meanwhile, Fed Member Kashkari (non-voter, hawkish) largely just echoed his comments from his essay published on Monday at an event on Tuesday, highlighting the “conundrum” that inflation has come down very quickly, but the labour market is very strong. With the election looming, the Minneapolis Fed President towed the party line and said the Fed does not think about politics or the election when it sets rates. He also played down the inverted yield curve as being a reliable indicator of recession as he said the disinflation seen is not being mostly caused by the Fed. Meanwhile, on the consumer, Kashkari noted household savings are being spent down more slowly than had been expected. Elsewhere, Oil rose 0.95% while Gold closed 0.4% after a small fall in the Dollar.
To mark my 2925th 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 still ahead by 542 points for February after closing January with a gain of 3675 points. December saw a gain of 1890 points after finishing November with a gain of 1734 points. October ended with a gain of 3184 points, after closing September with a small gain of 228 points, after finishing August with a gain of 1485 points, 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 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 0.23% higher at a price of 4954.
The Dow Jones Industrial Average closed 141 points higher for a 0.37% gain at a price of 38,521.
The NASDAQ 100 closed 0.23% lower at a price of 17,572.
The Stoxx Europe 600 Index closed 0.63% higher.
Yesterday, the MSCI Asia Pacific closed 0.7% lower.
Yesterday, the Nikkei closed 0.53% lower at a price of 36,160.
Currencies
The Bloomberg Dollar Spot Index closed 0.26% lower.
The Euro closed 0.1% higher at $1.0751.
The British Pound closed 0.4% higher at 1.2599.
The Japanese Yen rose 0.3% closing at $147.90.
Bonds
Germany’s 10-year yield closed 3 basis points lower at 2.28%.
Britain’s 10-year yield closed 6 basis points lower at 3.95%.
U.S.10 Year Treasury closed 7 basis points lower 4.09%.
Commodities
West Texas Intermediate crude closed 0.95% higher at $73.42 a barrel.
Gold closed 0.4% lower at $2035.10 an ounce.
The morning on the Economic Front we have German Industrial Production at 7.00 am, followed by U.S. MBA Mortgage Applications at 12.00 pm and the Trade Balance at 1.30 pm. Finally, we have speeches from Fed Members Kugler, Barkin and Bowman at 4.00 pm, 5.50 pm and 7.00 pm respectively.
Cash S&P 500
An incredible statistic from last Monday’s trading session. ‘’The S&P closed within 0.35% of an all-time high yet fewer than 20% of NYSE issues rallied’’ This has never happened since 1962. There were only two days when fewer than 30% of issues rallied: November 22, 1999, and January 18, 2018. This is mind boggling with select tech shares rallying while even Apple is lower on the year. The broader market is seeing carnage underneath. Just look at Regional Banks which have been cremated, not helped by the further 22% fall in NYCB shares yesterday. This explains why technical signals like the $NYSI are maximum oversold despite the three main American Indexes trading close to all-time highs. The message: The broader market is correcting hard which ironically is now setting itself up for a buy as mad as this sounds. Today, I will raise my S&P buy level to 4912/4927 with a higher 4899 ‘’Closing Stop’’. I will continue to be a small seller on rallies. The S&P has resistance from 4980/4998. I will raise my sell level to this area with a higher 5015 ‘’Closing Stop’’.
EUR/USD
No Change: I am still long from last Friday at an average rate of 1.0808. I will leave my 107.15 ‘’Closing Stop’’ unchanged. I will now lower my T/P level to 1.0835. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
The Dollar traded in a narrow range yesterday as the market tries to consolidate Monday’s large rally. I am still short at an average rate of 104.35 with the same 105.05 ‘’Closing Stop’’. I will now raise my T/P level on this position to 103.95. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
I am still flat as the DAX never came close to yesterday’s buy range. I will now raise my buy level to 16800/16890 with a higher 16725 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 16960. I still do not want to be short the DAX at this time. If this view changes, I will be back with anew update for my Platinum Members.
Cash FTSE
I am still flat. The FTSE rallied yesterday, testing the 7700-resistance area as I go to press. I still have no interest in being short the market preferring to be a buyer of dips. I will now raise my buy level to 7560/7630 with a higher 7495 ‘’Closing Stop’’.
Dow Rolling Contract
For the most part Tuesday was a boring session with little or no price movement, before a late rally saw the Dow close higher on the day. I am still flat. I will now raise my buy level to 38010/38260 with a higher 37795 ‘’Closing Stop’’. I no longer want to be short the Dow at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
Frustratingly, the NDX missed yesterday’s initial 17460 buy level with a 17473 low print before rallying 100 points into the close. I am not going to chase the NDX higher, leaving my 17310/17460 buy level unchanged with the same 17175 ‘’Closing Stop’’. I still do not want to be short the NDX at this time. If this view changes, I will be back with a new update for my Platinum Members.
March BUND
The Bund made a morning low at 133.75 before rallying 70 points into the European Close. I am still flat. I will now raise my buy level to 133.10/133.80 with a higher 132.45 ‘’Closing Stop’’. Despite the low yield of 2.28%, I still do not want to be short the Bund at this time. If this view changes, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Just like Silver, the volatility and daily ranges for precious metals has collapsed. Silver has been in a 200 points range for almost six months while Gold continues to have daily ranges of $10/$15 making it difficult to make points in these contracts. I am still flat Gold. I will now raise my buy level to 2000/2015 with a higher 1989 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2024.
Silver Rolling Contract
No Change. I still believe in the bull case for this precious metal. I will continue to hold my 24.40 average long position with no stop or T/P level for now. This morning, Silver is trading 10 points lower at a price of 22.43. I will continue to look to add to my existing long position on any further move lower to 21.50. If this view changes, I will be back with a new update for my Platinum Members.
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