U.S. Indexes ended Wednesday’s session with notable gains after a downbeat start as initial AMD weakness post-earnings weighed with investors touting lofty valuations, but this soon pared. Sectors were mainly green with Communication Services and Consumer Discretionary sitting atop of the pile, with Consumer Staples, Tech, and Real Estate sitting in the red, albeit marginally. US data came via ADP and ISM Services, both of which came in hotter than anticipated, with both garnering a Dollar bid and pressuring the Treasury Market. ADP, which is receiving more attention due to the US government shutdown and lack of data, rose to 42k from -29k, and above the expected 28k. ISM Services rose to 52.4 (exp. 50.8, prev. 50.0), and above the top end of the analyst forecast range, while prices paid saw an unwelcome rise to a three-year high. Following the hotter-than-expected data, the Dollar Index rose to session highs, while both US indices and Treasuries sold off. In FX, after the aforementioned peak, the Dollar sold to be more-or-less flat at pixel time and paused its recent rally to the benefit of high beta FX amid the broader risk environment. The Japanese Yen was the clear laggard. Oil swung from gains to losses in a choppy day of trade amid a lack of much oil-specific newsflow. Overall, T-Notes were sold after ADP and Services ISM beat, while the Treasury began preliminary discussions on boosting future auction sizes, which was disclosed at QRA. Precious metals strengthened, albeit with spot gold not giving a real test to USD 4k/oz, and Bitcoin lifted back above USD 100k. The ISM Services PMI headline rose to 52.5, above the expected 50.8 and the highest estimate of 52.3, after being 50.0 in September. Business activity moved into expansion, 54.3 from 49.9. Employment contracted at a lesser rate (48.2 from 47.2), New Orders accelerated to 56.2 from 50.4, and Prices Paid hit 70.0 from 69.4, the highest reading in three years. Respondents cited tariffs behind the move higher in Prices Paid, while there was no indication of widespread layoffs or reductions in force, but the government shutdown was mentioned several times as impacting business activity and generating concerns for future layoffs. Eleven industries reported growth in October, one more than in September, while the number reporting contraction decreased from seven to six. On prices paid, Oxford Economics says the move higher does not alter their assumption that the tariff-related hit to activity and inflation is close to peaking for the year, but “is a reminder of the upside risks to inflation and another reason for the Fed to be more cautious lowering interest rates from here”. The ADP National Employment for October rose to 42k from -29k, above the expected 28k. Median change in job stayers was unchanged at 4.5%, with job changers rising to 6.7% from 6.6%. Given the US Government is on shutdown, which means a halt to the majority of data, the private ADP report garners more attention and comes under greater focus as the FOMC committee looks to gain a clear picture of the economy. In wake of the metrics there was a marginal hawkish shift in pricing, but nothing dramatic. ADP chief economist Nela Richardson noted that private employers added jobs in October for the first time since July, but hiring was modest relative to what was reported earlier this year. Meanwhile, Richardson adds, pay growth has been largely flat for more than a year, indicating that shifts in supply and demand are balanced. Elsewhere, Oil closed lower by 1.6% while Gold rebounded, ending the day with a gain of 1.4%.
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For anyone following my Platinum Service it made 300 points yesterday and is now ahead by 1235 points for November, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while 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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