U.S. Equity Markets closed a new all-time high on Friday led by the 1% gain in the Dow Jones, with all sectors aside from Consumer Discretionary in the green, as it was weighed on by Tesla (TSLA) (-8.8%) whose Robotaxi event disappointed investors. Financials sat atop the pile and was buoyed by JPMorgan (JPM), Wells Fargo (WFC), and BlackRock (BLK) who were all firmer post-earnings (details below), with the former beating on top and bottom line as well this year’s NII guidance impressing. The Dollar was flat, with Antipodeans outperforming and safe-havens lagging, reversing some of Thursday’s moves. The Canadian Dollar saw two-way action, as it initially strengthened against the Dollar in wake of the strong Canadian jobs report, but faded into the close. Treasuries curve steepened and chopped to US PPI and soft University of Michigan Survey but ultimately settled in the green with a dovish leaning Logan and lower oil prices supporting the move. On the crude complex, participants continue to await Israel’s response to Iran after Friday night’s Israeli security meeting concluded with no votes. Back to US data, PPI was mixed as the core was hotter-than-expected Y/Y but inline M/M, while headline M/M was underneath forecasts, while Y/Y was above. UoM disappointed, as the headline and both conditions and expectations all surprisingly declined. On the inflation footing, 1yr ahead ticked up to 2.9% from 2.7%, while the longer-term 5-10yr fell to 3.0% from 3.1%. Overall, the PPI data was mixed. The headline M/M was unchanged in September, softer than the 0.1% forecast and easing from the prior 0.2%. The Y/Y rose 1.8%, not as quick as the upwardly revised previous 1.9% (initially 1.7%), but above the 1.6% analyst consensus. The core numbers saw a M/M rise of 0.2%, in line with expectations and down from the prior 0.3%, but the Y/Y rose 2.8%, above the 2.7% forecast and prior 2.4%. The super core metrics however, both eased from the prior months. The data, in conjunction with the US CPI released on Thursday, will be used to help gauge the PCE numbers released on 31st October. Analysts at Oxford Economics warn that their nowcast of the US PCE deflators imply inflation is not falling as smoothly as they had anticipated, but suggest inflation is on a path, albeit a bumpy one, back to 2%. The desk expects headline PCE to rise 0.18% M/M, with the core at 0.25%, with the yearly prints, for headline and core, easing to 2.1% from 2.2% and 2.6% from 2.7%, respectively. Prelim University of Michigan headline for October fell to 68.9 from 70.1, beneath the expected 70.8. Current Conditions fell to 62.7 (exp. 64.3, prev. 63.3), and outside the bottom end of the forecast range, while forward-looking Expectations also declined to 72.9 (exp. 75.0) from 74.4. On the inflation metrics, 1yr ahead rose to 2.9% from 2.7%, while longer-term 5-10yr dipped to 3.0% from 3.1%. The report notes, while inflation expectations have eased substantially since then [June 2022], consumers continue to express frustration over high prices. Still, the report adds, long-run business conditions rose to their highest reading in six months, while current and expected personal finances both softened slightly. In addition, despite widespread news coverage about the Middle East and Ukraine, few consumers connected these developments to the economy. Looking ahead, the report notes, with the upcoming election on the horizon, some consumers appear to be withholding judgment about the longer-term trajectory of the economy. Last Thursday U.S. CPI came in hotter than expected across all gauges, core CPI rose 0.3% M/M (exp. 0.2%), and headline M/M rose 0.2% (exp. 0.1%). Core Y/Y rose 3.3% (exp. 3.2%), edging slightly higher from the prior 3.2%, whereas headline Y/Y increased by 2.4% (exp. 2.3%), though waned from August’s 2.5%. Concerning annualised rates (Core), they mostly ticked up from September, namely, the 3 month rising to 3.1% (prev. 2.1%), while the 6 month eased to 2.6% (prev. 2.7%) but the 12 month rose to 3.3% (prev. 3.2%). Regarding shelter and food, the two indexes contributed to over 75% of the monthly increase, BLS said, albeit on a positive note, the owner’s equivalent rate rose 0.3%, which Oxford Economics highlights is the lowest print since June. On the hot report, OxEco believes it does not signal a reacceleration of inflation, nor will it deter the Fed from cutting by 25bps at the November meeting. In addition, the recent FOMC minutes downplayed a reignition in inflation, as almost all participants agreed upside risk to inflation had diminished. As to why OxfordEco won’t alter near-term inflation and monpol forecast changes, they think that there might have been some idiosyncratic factors that contributed to the hot report as prices for tobacco/smoking products, admission to sporting events, and college textbooks saw large gains, which many “won’t be duplicated over the next couple months”. On the 2024 rate outlook, the report further cements the recent repricing in Fed pricing, in which money markets have unwound the possibility of a 50bps rate cut at the November meeting, as the debate on November policy decision now involves a 25bps cut or a hold (Refinitiv pricing – 85% for 25bps cut, 15% for a hold). That said, October’s Jobs report and September’s PCE report lie ahead before the next Fed policy decision. Elsewhere, Oil closed 0.38% lower while Gold surged, ending Friday with a gain of 1.7%.
To mark my 3075th issue of TraderNoble Daily Commentary I am offering a special 2-Year rate of Euro 2750 for my Platinum Service which includes 1 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 286 points on Friday is now ahead by 989 points for October after ending September with a gain of 4402 points following a 301-point loss for August after closing July with a gain of 1918 points while June closed with a gain of 2074 points, having made 1843 points in May. The Platinum Service made 4010 points in 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 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 0.61% higher at a price of 5815.
The Dow Jones Industrial Average closed 409 points higher for a 0.97% gain at a price of 42,863.
The NASDAQ 100 closed 0.15% higher at a price of 20,271.
The Stoxx Europe 600 Index closed 0.55% higher.
Last Friday, the MSCI Asia Pacific closed 0.7% higher.
Last Friday, the Nikkei closed 0.57% higher at a price of 39,605.
Currencies
The Bloomberg Dollar Spot Index closed 0.07% lower.
The Euro closed 0.1% lower at $1.0935.
The British Pound closed 0.1% higher at 1.3072.
The Japanese Yen rose 0.1% closing at $149.12.
Bonds
Germany’s 10-year yield closed 1 basis points higher 2.27%.
Britain’s 10-year yield closed 3 basis points higher at 4.21%.
U.S.10 Year Treasury closed 4 basis points higher at 4.10%.
Commodities
West Texas Intermediate crude closed 0.38% lower at $75.56 a barrel.
Gold closed 1.7% higher at $2657 an ounce.
Today we have no Economic data of note on either side of the Atlantic. Some of the American Markets are closed for the Columbus Day Holiday. Meanwhile we have speeches from Fed Members Kashkari and Waller at 2.00 pm and 8.00 pm respectively.
Cash S&P 500
The S&P closed at yet another all-time high on Friday as ‘’My Nothing Matters’’ theme continues to grow. Despite higher-than-expected CPI on Thursday and higher PPI on Friday buyers again bought every dip. I just cannot be a buyer against this background especially as the Buffet Market Cap to GDP signal closed above 200% on Friday. No wonder Buffet is selling most his holdings on new highs. In my opinion there is no solid risk/reward in buying the S&P at these levels. Apart from last Wednesday my strategy of selling rallies at or near new highs has worked well over the past two months. While seasonality including higher Bond Yields and a stronger Dollar have so far not prevented a new high in the S&P the fact that buybacks are stopping now for a few weeks has to have a negative effect on the S&P. The reality is we have negative divergences everywhere as no dips are allowed in the market ahead of the Presidential Election which is now just three weeks away. The S&P has now closed higher for 10 of the past 11 months and 9 of the past 10 weeks. Another peculiar stat is the fact that VIX again closed over 20 despite both the S&P and Dow closing at new highs. Although the McClellan Oscillator improved on Friday it still closed negative (-30) while the Fear & Greed Index closed with a reading of ‘’Extreme Greed’’. Friday’s late rally saw the whole of my sell range triggered for a now 5815 short position. I will add to this trade at 5835 with a now higher 5851 ‘’Closing Stop’’. I will now raise my T/P level to 5796. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
EUR/USD
I am still long the EURO from last week at an average price of 1.1015. I will now lower my ‘’Closing Stop’’ to 1.0895 which is just below Friday’s low. Meanwhile, I will leave my 1.1035 T/P level unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
No Change: I am still short the Dollar from 10 days ago at an average rate of 102.40 with the same 103.15 ‘’Closing Stop’’. Meanwhile, I will leave my 102.10 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 the whole of Thursday’s sell range for a 19275 average short position. Subsequently, the DAX traded lower to my revised 19200 T/P level as emailed to my Platinum Members and I am now flat. As I go to press the DAX is trading higher at 19340 in the ‘’Grey Market’’. The DAX has further resistance from 19440/19540 where I will again be a seller with a higher 19615 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 19370.
Cash FTSE
I am still flat the FTSE as the boring action in this market still shows no sign of ending. Despite how heavy the FTSE is trading I have no interest in shorting the market. Today, I will again be a buyer on any dip lower to 8130/8200 with a lower 8065 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 8250.
Dow Rolling Contract
After the Dow hit my initial 42820 sell level we had a small sell-off to my revised 42715 T/P level as emailed to my Platinum Members and I am still flat. On Friday, the Dow was the strongest Index registering a new intraday and closing high. The biggest movers of the Index were two financials, JP Morgan Chase and Goldman Sachs following better earnings reports from both banks. The Dow has further resistance at 43350 which is a major trendline. Today, I will be an aggressive seller from 43200/43450 with a higher 43705 ‘’Closing Stop’’. Despite the bullish price action in the Dow I still do not want to be long the market at this time.
Cash NASDAQ 100
The NDX never came close to Thursday’s buy range and I am still flat. I will now raise my buy level to 19730/19890 with a higher 19595 ‘’Closing Stop’’. If triggered, I will have a T/P level at 19995. I still do not want to be short the NDX at this time.
December BUND
My Bund plan worked well as the market sold off to my 132.90 buy level before rallying to my revised 133.43 T/P level and I am now flat. Today, I will again be a buyer on any further dip lower to 132.00/132.80 with a now lower 131.45 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 133.40. I still no longer want to be short the Bund at this time.
Gold Rolling Contract
Frustratingly, Gold missed my buy range with a 2597 low print before rallying $60 off this low into Friday’s New York close. Today, I will move my buy level higher to 2595/2611 with a higher 2579 tight ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2625.
Silver Rolling Contract
Silver followed Gold higher on Friday, hitting my revised 31.58 T/P level on my latest 31.05 average long position and I am now flat. Silver has support below from 30.40/31.20 where I will again be a buyer with the same 29.55 ‘’Closing Stop’’.
Recent Comments