U.S. Equity Markets were choppy on Tuesday amid hawkish Fed speeches and mixed earnings reports as the Indices attempted to find some ground after recent selling, with the VIX back under 19 and a lack of response (so far) from Israel. There were two key Fed speeches with both Vice Chair Jefferson and Chair Powell himself walking back comments around rate cuts, that weighed on Treasuries as yields continued to climb higher. There are now 40bps of cuts priced for the year in Money Markets vs 44bps beforehand. Banks were an area of weakness with Bank of America (BAC) and Bank of New York Mellon (BK) dipping post-earnings, although Morgan Stanley (MS) outperformed. Meanwhile, tech found some general recovery, while a solid UNH report supported Healthcare. The Dollar was ultimately flat. Note a mini-flash crash in USD/JPY in the NY morning ignited suspicions of Bank of Japan intervention, although note the pair has recovered already. Oil prices were flat, although Natural Gas saw a late session spike which was followed by TC Energy (TRP) announcing it was responding to an incident in Yellowhead County involving NGTL with the affected section of pipeline having been shut down. Fed Chair Powell noted the recent data shows a lack of further progress on inflation this year and has not given greater confidence, and as such if higher inflation persists the Fed can maintain its current rate as long as needed. In terms of Core PCE (the Fed’s preferred gauge of inflation) he said 12-month expected to be little changed at 2.8% in March. Further still, the Chair added the current situation is not the standard case of inflation driven by overheated demand. By way of comparison, when Powell last spoke before the March inflation data, he often referenced expectations for rate cuts later this year, which are absent from these comments. More so, the Chair had also previously been eager to express that it is too soon to say if the recent inflation readings are more than just a bump, but he again has not used that language in these latest remarks. Meanwhile, Vice Chair Jefferson in a keynote speech, made no references to rate cuts, unlike his last policy remarks in February. “My baseline outlook continues to be that inflation will decline further, with the policy rate held steady at its current level, and that the labour market will remain strong, with labour demand and supply continuing to rebalance”, Jefferson said. He also warned that if the data suggests inflation is more persistent than he currently expects it to be, “it will be appropriate to hold in place the current restrictive stance of policy for longer.” Building Permits, the more forward-looking gauge of housing activity, fell 4.3% in March to 1.458 million from 1.523 million, and shy of the expected 1.515 million, while Housing Starts tumbled 14.7% to 1.321 million (prev. 1.549 million), well short of the expected 1.487 million and outside the lower bound of the forecast range of 1.487 million. As Oxford Economics states, “The drop in permits and the spike in mortgage rates following the release of the March CPI report lend some downside risk to our forecast for a modest rise in housing starts over the rest of 2024.” Nonetheless, the consultancy adds their current baseline assumes housing starts will rise to an annual pace of about 1.5 million in the second half from 1.42 million in Q1. In addition, Oxford expect single-family starts, where there continues to be a shortage of supply, to drive the gains in housing starts in 2024. Elsewhere, Oil closed flat while Gold ended Tuesday with a 0.5%, following another volatile trading session.
To mark my 2975th 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 672 points yesterday and is now ahead by 2276 points for April after ending March with a gain of 2113 points. February closed with a gain of 1606 points, 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 0.21% lower at a price of 5051.
The Dow Jones Industrial Average closed 63 points higher for a 0.17% gain at a price of 37,798.
The NASDAQ 100 closed 0.04% higher at a price of 17,713.
The Stoxx Europe 600 Index closed 1.53% lower.
This Morning, the MSCI Asia Pacific closed 0.7% lower.
This Morning, the Nikkei closed 1.32% lower at a price of 37,961.
Currencies
The Bloomberg Dollar Spot Index closed 0.05% higher.
The Euro closed 0.1% lower at $1.0628.
The British Pound closed 0.1% lower at 1.2440.
The Japanese Yen fell 0.7% closing at $154.60.
Bonds
Germany’s 10-year yield closed 4 basis points higher at 2.49%.
Britain’s 10-year yield closed 6 basis points higher at 4.34%.
U.S.10 Year Treasury closed 2 basis points higher at 4.66%.
Commodities
West Texas Intermediate crude closed 0.02% lower at $85.39 a barrel.
Gold closed 0.5% higher at $2392.10 an ounce.
This morning on the Economic Front we already had the release of U.K. CPI which came in at +3.2% Y/Y versus +3.1% expected. Next, we have Euro-Zone CPI and a speech from ECB Member Cipollone at 10.00 am. At 12.00 pm we have U.S. MBA Mortgage Applications, followed by a speech from ECB President Lagarde at 6.45 pm. Finally, we have a 20 -Year Treasury Auction at 6.00 pm and the Fed’s Beige Book at 7.00 pm.
Cash S&P 500
In contrast to Monday, my S&P plan worked well yesterday as the market traded lower in the morning to my 5042-buy level before rallying to my revised 5066 T/P level. Subsequently, I emailed my Platinum Members to buy the S&P again at 5042 before rallying to my 5054 T/P level and I am now flat. The S&P is now trading 225 Handles lower than the March 28 top and all-time high of 5265. There is still one large ‘’Open Gap’’ outstanding from the close on February 21 from 4981/4991 which is just below my key 5000 support zone. Today, I will be a buyer on any further dip lower to 5012/5027 with no stop for now. I will add to this position at 4985. If this second buy level is triggered, I will be back with a new update for my Platinum Members. If my first buy zone is executed, I will have a T/P level at 5051. If this view changes, I will be back with a new update for my Platinum Members.
EUR/USD
The next major support level for the Euro is last October’s 1.0448 low print. Given how oversold the Euro is at this time I do not see the Euro testing this October low anytime soon. Yesterday, the Euro hit my 1.0610 buy level. I am still long, and I will add to this position at 1.0540 while leaving my 1.0495 ‘’Closing Stop’’ unchanged. I will now lower my T/P level on this position to 1.0675. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
The Daily Sentiment Index for the Dollar closed at 91 last night. This is the highest reading since reaching 93 on September 27, 2023. The Dollar made a high at 107.35 on October, four trading days later. The DSI’s current extreme suggests that prices are nearing a short-term high. I am still short the Dollar at 106.05. I will add to this position at 106.85 while leaving my 107.35 ‘’Closing Stop’’ unchanged. Meanwhile I will leave my 105.60 T/P level unchanged. 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 traded lower to my 17750-buy level before rallying 100 points. This move higher saw my revised 18000 T/P level triggered and I am now flat. This morning, the DAX is trading at 17750. We have strong support from 17580/17660 where I will again be a buyer with a 17495 ‘’Closing Stop’’. Despite the recent weakness in the DAX, I still do not want to be short the market at this time.
Cash FTSE
Just like the DAX above, the FTSE got hit hard yesterday, trading the whole of my buy range for a now 7825 average long position. I will now lower my T/P level to 7880 while leaving my 7745 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
The Dow was the strongest of the American Indexes yesterday. This move higher saw the Dow hit a morning high above 38000. I used this rally to exit Monday’s 37750 long position at my revised 37902 T/P level and I am now flat. The Dow is severely oversold and trading outside the bottom of its Daily Bollinger Band. History tells us that this scenario does not last with a meaningful rally first. Today, I will again be a buyer of the Dow on any further move lower to 37400/37650 with a lower 37195 ‘’Closing Stop’’.
Cash NASDAQ 100
No Change. I am still long the NDX from Monday at an average rate of 17780. I will leave my 17595 ‘’Closing Stop’’ unchanged, while lowering my T/P level slightly to 17830. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
March BUND
Higher Treasury Yields saw the Bund hit my second buy level at 131.10 for a now 131.50 average long position. With ECB President Lagarde speaking this evening, I will now lower my T/P level on this position to 132.05. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
My Gold plan worked well as the market rallied to my 2397 sell level before having a small sell-off to my 2386 T/P level and I am now flat. Given how overbought Gold is trading, I will continue to be a seller of rallies. The next resistance level for Gold is last Friday’s 2440 all-time-high. I will be a small seller from 2430/2445 with a higher and wider 2461 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 2415.
Silver Rolling Contract
Silver just missed my initial 27.80 buy level before having a small rally into the New York close. I am not going to chase the market higher, leaving my 27.00/27.80 buy level unchanged with the same 25.95 ‘’Closing Stop’’. I still do not want to be short Silver at this time.
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