U.S. Indexes closed higher on Friday led by the S&P 500 hitting fresh record highs while the majority of sectors were green. Upside was led in Tech with the heavy cap stocks outperforming, leading to the NASDAQ 100 outperforming, while the Russell 2000 pared from its prior day rally. Several Fed speakers spoke on Friday. Dissenting Governor Miran confirmed he was the bottom dot in the 2025 dot plot; he does not think 50bps would spook markets, and he is going to try to persuade others on the FOMC to share his dovish views. Kashkari pencilled in two more rate cuts this year, while Daly acknowledged labour market softness. T-notes sold off, adding to the losses this week, with T-notes now a whole point lower from the post-FOMC statement peak. On trade, US President Trump and Chinese President Xi spoke on Friday. China said talks were positive and constructive, and Trump said progress was made on fentanyl, adding he will visit China early next year, and Xi would visit the US at an appropriate time. Meanwhile, the EU announced the 19th sanctions package on Russia (as expected), banning imports of Russian LNG into European markets and sanctioning 118 additional vessels from the shadow fleet. Rosneft and Gazpromneft are also on a full transaction ban. Russia also flew over Estonian airspace, and Estonia is calling on NATO to invoke Article 4. Oil prices were little phased and settled lower. In FX, the Dollar Index was strong but both the Canadian Dollar and Japanese Yen outperformed, with JPY buoyed against other currencies after a hawkish Bank of Japan (unchanged as expected, two voted for a hike, announced sale of J-REIT and ETF holdings, Governor Ueda also signalled that they do not have to wait for the impact of US tariffs to hike). However, the broad US Dollar strength saw USD/JPY flat. Gold prices also continued to push to fresh record highs, while Silver also rallied. Sterling lagged after larger-than-expected borrowing figures resulted in Chancellor Reeves facing further pressure ahead of the Autumn budget in November. Note, Bloomberg reported that Oracle (ORCL) is in talks with Meta (META) on a USD 20 bilion AI cloud computing deal. FedEx (FDX) was bid after strong earnings, while Trump is to sign an EO that would charge companies a USD 100,000 fee for H-1B visas, hitting Infosys (INFY), Accenture (ACN) and Cognizant (CTSH). Fed Member Miran when asked why he dissented, said in his own view, he does not see material inflation from tariffs. On the dot plots, Miran confirmed he was the bottom dot in 2025, which he pencilled in at a rate of 2.75-3.00%. For the meeting on Wednesday, Miran said he was the only support for a 50bps at the meeting and hopes to persuade others on the Fed to support aggressive rate cuts, and will attempt to do that over the coming weeks and months. Further on policy, the new Governor noted that being so far above neutral means policy is very restrictive, and the longer the Fed stays restrictive, the greater the risks to the job market; his 2026 Dot Plot is not so far from others, does not think a 50bps cut would worry markets, and stated it is a measured pace. Regarding inflation, the dissenter noted he is clearly in the minority in not being concerned about inflation from tariffs, and he added that the removal of migrants will have a disinflationary impact. As expected, Miran was asked about Fed independence and said it is silly to say he is doing the bidding of the White House, and he would resign immediately if he were asked by US President Trump to stay beyond January. While we have yet to get a text release from Miran on why he dissented in favour of a 50bps, as is the Fed norm and usually on the first Friday post-rate decision, Miran said he will give a full, detailed review of his views on Monday. Meanwhile, Fed Member Kashkari supported the 25bps rate cut this week, and noted the risk of a sharp increase in unemployment warrants some Fed action. On data, Kashkari said it is hard to see inflation climbing much higher than 3% from tariffs, and if the labour market proves resilient or inflation rises, it should pause and hold policy rate but can always cut rates more quickly if the labour market weakens more than expected. Ahead, the Minneapolis Fed President sees two more quarter-point rate cuts this year as appropriate and adds the neutral rate has likely risen to 3.1% (Fed median projection is 3.0%). Fed Chair Candidate Bullard said that 75bps of cuts by year-end would be significant, noting the Fed decision was good and it looks like a sequence of three cuts to year-end. He believes the Fed is in a pretty good position at the moment and said he does not think he would have voted for a 50bps rate cut at the September confab. Bullard estimates the neutral rate at 3.25% (above the Fed’s median view of 3.0%). He added that inflation remains above target, but he would not abandon the Fed’s inflation goal. On the Fed framework, he suggested that the dot plot has its problems and thinks the Fed can do better than it has on the dot plot. Regarding the balance sheet, Bullard said current policy is appropriate, while on the balance sheet said Mortgage Backed Securities will take a long time to go off the balance sheet, noting how the Fed added too much MBS to the balance sheet from COVID. Elsewhere, Oil closed lower by 1.2% on Friday while Gold ended session with a gain of 0.3%.
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For anyone following my Platinum Service it made 748 points on Friday and is now ahead by 2390 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
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