U.S. Indexes closed lower on Tuesday, with weakness seen in the wake of reports in the Information that internal data shows the financial challenge of renting out NVIDIA (NVDA) chips and its impact on margins. This hit the large-cap tech sectors and weighed on Indices before then hovering into the close. Oracle also sold off aggressively but closed off lows as several analysts were out defending the name, describing it as a buying opportunity. The downside in equities resulted in upside in T-notes, while Gold had been pushing higher anyway, with futures hitting USD 4,000/oz. Gold did briefly move off highs, tracking other metals (silver and copper), but managed to reclaim the brief bout of weakness, while silver and copper did not. In FX, the Dollar climbed further, supported by a weaker Euro and Yen as the currencies continue to take a beating after the French PM resignation and Takachai winning the LDP leadership election. However, the New Zealand Dollar underperformed ahead of RBNZ tonight, where market pricing is leaning towards a 50bps rate cut. As I go to post, the RBNZ have cut rates by 50 basis points. Oil prices were choppy in thin news flow, ultimately settling flat. Data highlights saw the New York Fed SCE post higher inflation expectations in the one and five-year forecasts, while the RCM/TIPP Economic Optimism index declined slightly – neither sparked a market reaction. Fed speak saw Miran continue to toe a dovish line while Kashkari appeared more concerned about inflation than the labour market. Elsewhere, the 3-year T-note auction was well received. New York One and Three-year-ahead inflation expectations rose to 3.4% (prev. 3.2%) and to 3.0% (prev. 2.9%), respectively. The three-year-ahead inflation expectation was unchanged at 3.0%. Concerning labour, one-year ahead earnings growth expectations fell 0.1% to 2.4%, its lowest reading since April 2021. The mean probability that the unemployment rate will be higher one year from now increased 2% to 41.1%, the mean perceived probability of losing one’s job in the next 12 months rose 0.4% to 14.9%, and the perceived probability of finding a job in the next three months if one’s current job was lost rebounded from a series low of 44.9% in August to 47.4%. Regarding households, the expected growth in household income was unchanged at 2.9% (in line with TTM avg), while nominal household spending growth expectations fell 0.3% to 4.7%. Expectations about year-ahead financial situations deteriorated slightly, with a smaller share of respondents reporting that their households are expecting to be better off a year from now. For stocks, the perceived probability that US stock prices will be higher 12 months from now jumped 0.9% to 39.8%. The gauge of US consumer confidence slipped slightly in October to 48.3 from 48.7, marking two consecutive months below 50, signalling continued pessimism. The report also notes it is below the 297-month historical average of 49.2. Within the survey, investor confidence declined 2.0%, while non-investor confidence rose 1.2%. Meanwhile, the Personal Financial Outlook improved to 55.6 from 53.4. The Confidence in Federal Economic Policies declined to 46.4 from 47.3. Looking ahead, the six-month economic outlook index fell to 42.8 from 45.5. It also highlights that the Financial-Related Stress Index fell to 63.3 from 65.3, noting that a reading above 50 signals increased stress. The last time it was sub-50 was in February 2020, before the COVID pandemic. Meanwhile, this month’s reading is above the 60.4 average since December 2007, signalling heightened financial stress relative to the long-term average. Raghavan Mauyr, President of TechnoMetrica, which conducted the survey, said, ” Concerns about inflation and the impact of tariffs remain high, with food prices standing out as the leading economic worry.” Fed Member Miran remains optimistic going forward, citing the removal of uncertainty and a more sanguine inflation outlook than other Fed members. Miran believes average recent inflation should moderate and does not see tariffs driving inflation by that much. Keep in mind, these are all well-known views of the Fed dove. Miran remarked on other known views, noting the real neutral rate is likely 0.5%, and he has a preference for policy to be forward-looking, given the lags of policy impact. Miran is optimistic the Fed will have the needed data by the October FOMC but added that private data does not fill the gap. Kashkari the Minneapolis Fed president says it is too soon to know if inflation will be sticky from tariffs, noting data is sending some stagflation signals. He is bullish on labour as workers have a very important role in the economy. He also said there is a lack of evidence supporting declarations of AI replacing workers. He believes it is far too soon to know the impact of AI on the economy. On rates, he reiterated that the Fed is committed to making decisions based on data and analysis, not political considerations. He is not convinced that a few rate cuts will translate to lower mortgage rates, and if the Fed were to drastically lower rates, he would expect the economy to have a burst of high inflation. Kashkari added that if there’s massive demand for investment in data centres, that will push up interest rates. Elsewhere, Oil closed higher by 0.3% and Gold by +0.5%.
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 470 points yesterday and is now ahead by 310 points for October after closing September with a gain of 3774 points 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 0.38% lower at a price of 6714.
The Dow Jones Industrial Average closed 91 points lower for a 0.20% loss at a price of 46,602.
The NASDAQ 100 closed 0.55% lower at a price of 24,840.
The Stoxx Europe 600 Index closed 0.15% lower
This Morning, the MSCI Asia Pacific closed 0.4% lower.
This morning, the Nikkei closed 0.32% lower at a price of 47,795.
Currencies
The Bloomberg Dollar Spot Index closed 0.48% higher.
The Euro closed 0.55% lower at $1.1655.
The British Pound closed 0.43% lower at $1.3426.
The Japanese Yen fell 0.94% closing at $151.76
Bonds
U.K.’s 10-Year Gilt closed 1 basis points lower at 4.73%.
Germany’s 10-Year Bund Yield closed 1 basis points lower at 2.71%
U.S.10 Year Treasury closed 3 basis points lower at 4.13%.
Commodities
West Texas Intermediate crude closed 0.49% higher at $61.99 a barrel.
Gold closed 0.5% higher at $3980.10 an ounce.
This morning on the Economic Front we already had the release of German Industrial Production which fell a huge 4.3% for August versus -1.1% m/m expected. Next, we have the MBA Mortgage Applications at 12.00 pm and Construction Spending at 3.00 pm. Finally, we have speeches from Fed Members Barr and Goolsbee at 2.30 pm and 3.0 pm respectively. Due to the Government shutdown there will be no U.S. data released until further notice.
Cash S&P 500
The 14-Day RSI hit 73 yesterday afternoon leading to an extremely overbought market at new-all-time highs. This higher move saw my 6752-sell level triggered before the market fell over 50 Handles. This move lower saw my 6725 T/P level triggered and I am now flat. So far, the key short-term support at 6700 is holding meaning we have no breakdown as yet. If we do break and close below 6700 the next major support level is at 6663. This is where the Weekly 5 EMA comes in. Incredibly the S&P is now in week 25 of not breaking this key EMA support. I cannot remember the last time that this happened if ever. We have gone through a bunch of relentless rallies over the past 20 years, but I have to say this rally since April is the most bizarre yet. This has been the trend since COVID as the rallies get ever more extreme and ever more disconnected from everything fundamental and that breeds a certain type of danger but as I have said countless times we do not know the ‘’WHEN AND FROM WHERE’’ this market will break. Today, I will again be a small seller from 6733/6753 with a lower 6771 ‘Closing Stop’. With the Weekly 5 EMA offering short-term support on any tag, I will be a buyer from 6647/6667 with a tight 6632 ‘Closing Stop’. If I am taken short, I will have a T/P level at 6708. If I am taken long, I will have a T/P level at 6692.
EUR/USD
I am still flat as the Euro never came close to Tuesday’s sell range. I will now lower my sell level to 1.1700/1.1780 with a lower 1.1865 ‘Closing Stop’. If I am taken short, I will have a T/P level at 1.1630. I still do not want to be long the Euro at this time.
Dollar Index
I am still flat. The weakness in the Japanese Yen saw the Dollar close higher by a further 0.6% yesterday. Today, I will now raise my Dollar buy level to 97.70/98.50 with a higher 96.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 99.20.
Russell 2000
I am still short the Russell from last week at 2470 with the same 2430 T/P level. I will add to this position at 2530 while leaving my tight 2575 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
FTSE 100
Frustratingly the FTSE missed Tuesday’s sell range by three points before selling off into the London close. This morning the FTSE is a touch higher. I will continue to be a seller from 9520/9580 with the same 9651 ‘Closing Stop’. If I am taken short, I will have a T/P level at 9450. I still do not want to be long the FTSE at this time. If this view changes, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
I am still flat. Today, I will lower my sell level 46900/47150 with a lower 47305 ‘Closing Stop’. If I am taken short, I will have a T/P level at 46680.
Cash NASDAQ 100
My NASDAQ plan worked well as the market rallied to my 25060-sell level before trading lower to my revised 24860 T/P level and I am now flat. Tuesday’s sell-off occurred despite AMD building on Monday’s gains. AMD alone has added over $105 billion in market cap this week which is just insane. We are now witnessing the largest and most concentrated instant market cap expansions in history with no proven future revenue/cost/earnings. Tuesday’s reversal off the latest 25068 new all-time high may be significant or else buyers return as has been the case almost every day since the April 8 Low. Today, I will again be a seller of the NDX from 24970/25150 with a lower 25305 ‘Closing Stop’. If I am taken short, I will have a T/P level at 24790
December BUND
I am still flat as the Bund again traded in a narrow range. Today, I will continue to be a buyer on any dip lower to 127.90/128.70 with the same 127.15 ‘Closing Stop’. If I am taken long, I will have a T/P level at 129.30.
Gold Rolling Contract
Gold made another new all-time high above 3990 yesterday on a day that we saw plenty of two-way price action. Overnight, Gold made a new all-time high at 4045 before having a small sell-off. This move higher saw the whole of my Gold sell range triggered for a now 3992 average short position. I will leave my 4015 ‘Closing Stop’ unchanged. I will now raise my T/P level to 3974. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
Silver hit a new 2025 high at 48.70 before having a small reversal off this high into the New York close. I am still flat. Silver has short-term support from 45.80/46.80. I will leave my buy level unchanged in this range with the same 44.15 ‘Closing Stop’. If I am taken long, I will have a T/P level at 47.90.
Recent Comments