U.S. Indices closed mixed again on Friday in what was ultimately quiet trade with tech gains buoying the NASDAQ 100. The majority of sectors closed red, led by Materials and Health Care but Utilities and Technology outperformed. T-Notes were sold across the curve in likely profit taking after the recent rally with all eyes on the FOMC this week. The Dollar was flat, as was most of G10 FX albeit the Japanese Yen and New Zealand Dollar lagged peers ahead of the key risk week this week (US Retail Sales, Fed, BoE, BoJ, BoC). The crude complex ended the day, and week, with gains as Russia tensions continue to mount. Gold prices added to recent gains despite the move higher in yields as geopolitical risk premium kept the yellow metal bid. Preliminary University of Michigan for September saw sentiment fall to 55.4 from 58.2, way beneath the expected 58.0. Current conditions dipped to 61.2 from 61.7, again shy of the projected 61.3, and the forward-looking expectations tumbled to 51.8 (exp. 54.9, prev. 55.9), beneath the bottom end of the forecast range. 1 Year inflation expectations were left unchanged at 4.8%, but longer-term 5-10 year moved higher to 3.9% from 3.5%. Surveys of Consumers Director Joanne Hsu said, “buying conditions for durables improved, while all other index components fell. Consumers continue to note multiple vulnerabilities in the economy, with rising risks to business conditions, labour markets, and inflation.” On trade, Hsu added “Trade policy remains highly salient to consumers, with about 60% of consumers providing unprompted comments about tariffs, little changed M/M. Still, sentiment remains above April and May 2025 readings, immediately after the initial announcement of reciprocal tariffs.” Elsewhere, Oil closed higher by 0.51% while Gold was flat.
To mark my 3250th 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 made 140 points on Friday and is now ahead by 1047 points for September after ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 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 0.05% lower at a price of 6584.
The Dow Jones Industrial Average closed 273 points lower for a 0.59% loss at a price of 45,490.
The NASDAQ 100 closed 0.04% higher at a price of 23,834.
The Stoxx Europe 600 Index closed 0.09% lower.
This Morning, the MSCI Asia Pacific closed 0.6% higher.
This morning, the Nikkei closed 0.89% higher at a price of 44,768.
Currencies
The Bloomberg Dollar Spot Index closed 0.09% higher.
The Euro closed 0.14% lower at $1.1733.
The British Pound closed 0.11% higher at $1.3558.
The Japanese Yen fell 0.21% closing at $147.68
Bonds
U.K.’s 10-Year Gilt closed 6 basis points higher at 4.68%.
Germany’s 10-Year Bund Yield closed 6 basis points higher at 2.71%
U.S.10 Year Treasury closed 4 basis points higher at 4.07%.
Commodities
West Texas Intermediate crude closed 0.51% higher at $62.69 a barrel.
Gold closed 0.05% higher at $3642.10 an ounce.
This morning on the Economic Front we already had the release of German Wholesale Price Index for August which fell 0.6% versus -0.1 m/m expected. Next, we have the Euro-Zone Trade Balance at 10.00 am followed by a speech from ECB Member Schnabel at 12.30 pm. This is followed by U.S. New York Empire State Manufacturing Index at 1.30 pm. Finally, we have a speech from ECB President Lagarde at 7.30 pm.
Cash S&P 500
This coming week will feature both a Fed meeting and a Bank of Japan meeting. Equally important, Monday is a quarterly tax date, which should deliver a big boost to the Treasury General Account (TGA). On the same day, $78 billion in Treasury coupons will also settle. It is possible the TGA could reach the $850 billion mark by the end of Monday. As of Thursday, the TGA stood at $682 billion. The only piece of good news is that on September 16, there will be a paydown of about $50 billion, which should help alleviate some of the pressure on reserves. Still, by the time the SOMA report is released on Thursday, I would expect the TGA to be around $800 to $850 billion, with reserve balances at or below the $3 trillion mark. At that point, the liquidity drain from the TGA refill will essentially be complete. However, quarter-end pressures will likely push reserves even lower as we move toward September 30. SOFR swaps are already pricing in a Fed rate cut on Wednesday, which is why rates have been trading lower. What really matters, however, is the spread between SOFR and the effective Funds Rate. Assuming a 25-bps cut pushes the effective Funds Rate down to 4.08%, then an overnight rate of 4.17 to 4.21 would put the spread between 9 and 13 bps above the effective Fed Funds—slightly wider than the 8 bps observed on Friday, when SOFR was at 4.41 versus the Fed Funds rate of 4.33%. There is no doubt that liquidity will be tighter over the next two weeks, and the window for market turbulence is far from behind us. In fact, I would argue it still lies ahead, given the combination of liquidity pressures, VIX option expiration on Wednesday, quarterly options expiration on Friday, a Fed meeting on Wednesday, and both BOJ and Bank of England meetings on Thursday. Volatility is more likely to expand this week than contract. The 10-year yield looks a bit overdone to the downside and appears due for some consolidation or a bounce. Meanwhile, the stock market finds itself in an awkward position: overbought and flashing warning signs. A glance at the ‘’Wingstop indicator’’ shows the broader S&P 500 is not in a good place. In fact, it looks eerily similar to January. Wingstop has an uncanny ability to trade about a month ahead of the S&P 500. On top of that, we now have our “peak stupidity” indicator with Oracle, which has already given back 50% of the gains it made following the OpenAI contract. Everyone knows that we are in a bubble as it is the most obvious bubble in history. The difficulty is pinpointing when it will burst. In modern financial history we have never seen a mania of this magnitude. Surpassing the extremes of 1929 tells us we are in a bigger bubble, but it does not tell us quantitatively how much further the bubble might inflate before imploding. When markets push higher after breaking every recorded valuation metric, the only certainty is that we are in mania of Grand Supercycle (or greater) degree. If you are fully invested in equities in your pension you are playing with fire in my opinion. The S&P traded the whole of Thursday’s sell range for a now 6571 average short position. The S&P hit a high on Friday at 6600 before having a small sell-off into the Chicago close. Ahead of Wednesday’s FOMC Statement I will now raise my T/P level on this position to 6558 while leaving my 6601 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
EUR/USD
My short 1.1740 Euro position worked well as post the ECB leaving rates unchanged on Thursday the Euro traded lower to my 1.1670 T/P level and I am still flat. Today, I will again be a seller from 1.1770/1.1850 with a higher 1.1925 ‘Closing Stop’. If I am taken short, I will have a T/P level at 1.1700.
Dollar Index
No Change: One of the main factors contributing to the Dollar weakness this year was the increase in Dollar hedging by non-USD based asset managers. In 2024, the Dollar was the best performing G10 currency as the greenback rose on the tide of U.S. exceptionalism. Data from the Bank of Japan between 2021 and 2024 shows that the hedging ratio for major Japanese Life Insurers dropped from around 60% to 40% as fund managers took advantage of the upward trend in the value of the Dollar. The opposite has happened so far this year and may be running out of steam. For these reasons I am happy to be a buyer of dips in the Dollar. On Friday, the Dollar hit my buy range for a now 97.70 long position. I will add to this position at 97.00 while leaving my 96.45 ‘Closing Stop’ unchanged. I will leave my 98.50 T/P level unchanged for now. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
The Russell rallied to Thursday’s sell range for a now 2415 short position. I will add to this trade at 2465 while leaving my 2505 ‘Closing Stop’ unchanged. I will now raise my T/P level to 2385. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
FTSE 100
The boring sideways price action in the FTSE continues and I am still flat. I have no interest in shorting the market preferring to wait for a sell-off to my buy range before pulling the trigger. Therefore, I will continue to be a buyer on any dip lower to 9070/9150 with the same 8995 wider ‘Closing Stop’. If I am taken long, I will have a T/P level at 9205. If this view changes, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
Thursday’s surge saw the Dow hit my sell range for a 45970 average short position. Friday saw some profit taking. As I wanted to reduce risk I emailed my Platinum Members to exit and short Dow position at my revised 45900 T/P level and I am now flat. The Dow has short-term resistance from 46100/46350 where I will again be a seller with a higher 46505 tight ‘Closing Stop’. If I am taken short, I will have a T/P level at 45870. I still have no interest in buying the Dow at this time.
Cash NASDAQ 100
No Change. I am still short from last week at an average rate of 23890 with a now higher 23790 T/P level. I will leave my 24165 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
The Bund got hit hard on Friday. However, I am still flat. Today, I will lower my buy level to 128.40/129.10 while leaving my 127.85 ‘Closing Stop’ unchanged. If I am taken long, I will have a T/P level at 129.85. I still do not want to be short the Bund at this time.
Gold Rolling Contract
Gold continues to trade near all-time highs and I am still flat as neither my buy/sell levels were threatened over the past few trading sessions. Today, I will continue to be a seller from 3690/3710 with the same 3731 ‘Closing Stop’. Gold has support below from 3530/3550 where I will be a small buyer with the same 3505 ‘Closing Stop’. If I am taken short, I will have a T/P level at 3657. If I am taken long, I will have a T/P level at 3573.
Silver Rolling Contract
I am still flat. Today, I will raise my Silver buy level to 40.30/41.30 with a higher 39.25 ‘Closing Stop’. If I am taken long, I will have a T/P level at 42.05.
Recent Comments