U.S. Indices closed lower on Tuesday, in a choppy session, beginning in the US morning in futures after delayed US data. Recapping, the US November payrolls report headline came in at above expected, with the Unemployment Rate jumping to 4.6% from 4.4%, with some of the move explained by the participation rate rising, but the household survey is also subject to a larger standard error than usual, and it may be this way for a few months. On the Oct. headline, it fell 105k (exp. -25k), Retail Sales were soft but driven by a fall in auto sales, while S&P Global Flash PMIs disappointed. Akin to US indices, Treasuries saw two-way action, as they initially spiked higher amid a jump in the November unemployment rate, but it quickly faded as it was overall a mixed bag of data. Despite T-Notes then printing fresh troughs, they ground higher through the duration of the US afternoon to settle with a 3-5bps gains across the curve. The crude complex was once again underpinned by more promising Ukraine/Russia updates, while some traders also cite a surge in China buying oil from Venezuela in anticipation of sanctions. In FX, the Dollar saw slight losses, albeit well off earlier lows, as the Pound outperformed on hotter UK wage data ahead of the Bank of England on Thursday. Sectors were predominantly lower, although mega-cap stocks dominated Tech, Consumer Discretionary, and Communication Services were the only ones in the green, while Energy and Health lagged. Energy downside likely on the aforementioned oil weakness, while Healthcare was hit on Pfizer cutting guidance. Looking ahead, the influential Williams and Waller speak on Wednesday, with Micron earnings after-hours, CPI on Thursday, in addition to Nike earnings. Both October and November jobs reports were released following the government shutdown, albeit October came without the unemployment rate due to data gathering issues from the household survey during the government shutdown. The November headline NFP saw 64k jobs added, above the 50k forecast. Meanwhile, the unemployment rate spiked higher to 4.6% from 4.4% in September, albeit when rounded to 2dp the unemployment rate rose to 4.56%, 12bps higher than the 4.44% in September – albeit still above the year-end Fed median projection of 4.5%. However, it is worth stressing that the BLS announced on Monday that the November household survey has a slightly larger standard error, and these higher standard errors may last a few months. Meanwhile, the participation rate rose to 62.5% from 62.4%, with the U6 underemployment rate surging to 8.7% from 8.0%. Regarding wages, they were soft, rising 0.1% M/M in November, beneath the 0.3% forecast, while the Y/Y rose 3.5%, beneath the 3.6% forecast. The October NFP saw job losses of 105k; however, this was primarily due to a 162k drop in the federal government layoffs amid the government shutdown. Private payrolls rose by 69k in November, adding to the 52k addition in October. Regarding the overall NFP, Fed Chair Powell has suggested it is being overstated by 60k per month before accounting for annual revisions, implying real job growth of ~4k in November. Overall, the data had little impact on Fed market pricing, with 6bps of easing still priced for January, which implies a 24% probability of another 25bps rate cut. Following the report, ING writes that “Job creation continues to slow and unemployment is on the rise, which will mean the doves at the Federal Reserve will continue to make the case for further interest rate cuts”. It added that the risk of outright job losses is growing, and with mid-term elections less than a year away, the political pressure on the Fed to do more will intensify.” Retail Sales for October printed 0.0% M/M, shy of the expected 0.1%, and also beneath the revised lower 0.1%. The lacklustre headline figure was almost entirely due to a drop in vehicle sales following the expiry of the EV tax credit, which offset the strong ex-autos reading. Oxford Economics noted it leaves real consumption on track for growth of close to 2% annualised in Q4. Ex-autos M/M rose 0.4% (exp. 0.3%, prev. 0.1%), with Ex- gas/autos rising 0.5% (prev. 0.0%). Retail control jumped 0.8% (exp. 0.4%, prev. -0.1%). Ox Eco notes that due to the Government shutdown, they are missing other data that would feed into its tracking estimate of real consumption, but the details they have point to a decent gain in October. The consultancy adds that, with private sector job gains holding up and a strong stock market still driving spending by older, wealthier households, they expect a robust holiday shopping season and an acceleration in spending over 2026 as well. The S&P Global’s Flash PMI showed slower business growth in December as prices spiked higher. Manufacturing fell to 51.8 from 52.2 (exp. 52), and Services dropped more than expected to 52.9 from 54.1 (exp. 54), also beneath the lowest forecast of 53.0. This left the Composte lower at 53.0 from 54.2. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, writes that “the flash PMI data for December suggest that the recent economic growth spurt is losing momentum. Although the survey data point to an annualised GDP expansion of ~2.5% over Q4, growth has now slowed for two months. He adds that a key concern is rising costs, with inflation jumping sharply to its highest since November 2022, which fed through to one of the steepest increases in selling charges for the past three years. Elsewhere, Oil closed lower by a further 2.8% while Gold ended Tuesday’s session unchanged.
To mark my 3300th 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 515 points yesterday and is now ahead by 2227 points for December after ending the month of November with a gain of 4542 points, 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
Equities
The S&P 500 closed 0.24% lower at a price of 6800.
The Dow Jones Industrial Average closed 302 points lower for a 0.62% loss at a price of 48,114.
The NASDAQ 100 closed 0.26% higher at a price of 25,132.
The Stoxx Europe 600 Index closed 0.47% lower.
This morning, the MSCI Asia Pacific closed 0.3% higher.
This morning, the Nikkei closed 0.26% higher at a price of 49,512.
Currencies
The Bloomberg Dollar Spot Index closed 0.18% lower.
The Euro closed 0.03% higher at $1.1758.
The British Pound closed 0.43% higher at $1.3434.
The Japanese Yen rose 0.35% closing at $154.68
Bonds
U.K.’s 10-Year Gilt closed 2 basis points higher at 4.52%.
Germany’s 10-Year Bund Yield closed 1 basis points lower at 2.84%
U.S.10 Year Treasury closed 3 basis points lower at 4.15%.
Commodities
West Texas Intermediate crude closed 2.80% lower at $55.23 a barrel.
Gold closed 0.1% higher at $4309.10 an ounce.
This morning on the Economic Front we already had the release of the U.K. November CPI which rose 3.2% y/y versus +3.5% expected. Next, we have German IFO Business Survey at 9.00 am and Euro-Zone CPI at 10.00 am. This is followed by U.K. CBI Industrial Trends Orders at 11.00 am and U.S. MBA Mortgage Applications at 12.00 pm. Finally, we have Business Inventories at 3.00 pm and a 20-Year Treasury Auction at 6.00 pm. Meanwhile, Fed Members, Williams and Bostic are speaking at 2.05 pm and 5.30 pm respectively.
Cash S&P 500
My S&P plan worked well yesterday. Shortly after I posted the S&P made a low at 6771 before rallying to my 6796 T/P level. Subsequently, I emailed my Platinum Members to buy the S&P again at 6764 before we rallied to my 6779 T/P level and I am now flat. As we approach the Santa Clause rally phase, I have no interest in being short despite sentiment and valuations levels off the charts as I wait for this rally to play out in early January. Today, I will again be a buyer from 6770/6790 with a 6749 ‘Closing Stop’. If I am taken long, I will have a T/P level at 6812.
EUR/USD
The Euro rallied to my second sell level at 1.1770 for a now 1.1735 average short position. I will leave my 1.1835 ‘Closing Stop’ unchanged while raising my T/P level to 1.1690. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
I am still long the Dollar at an average rate of 98.80. Today I will leave my T/P level unchanged at 99.10 while also leaving my 97.95 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
It took a while but finally the Russell sold off to my 2510 T/P level on my latest 2535 average short position and I am now flat. Today, I will again be a seller on any further rally to 2550/2620 with a higher 2655 ‘Closing Stop’. If I am taken short, I will have a T/P level at 2510.
FTSE 100
The FTSE has rallied hard this morning following a much better CPI release earlier. I am still flat as the market just missed yesterday’s buy range before trading 70 points higher. Today, I will raise my buy level to 9580/9660 with a higher 9515 ‘Closing Stop’. If I am taken long, I will have a T/P level at 9710. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
No Change: I am still flat. There is no doubt that the Dow has been one of the most difficult markets to get an edge in over the past few months. I do not have a firm view in the Dow and for this reason I am going to stay flat to see how the market behaves over the coming days. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
My latest long 24920 NDX position worked well as the market rallied to my 25070 T/P level and I am still flat. This morning the NDX is trading higher at a price of 25150. We have short-term support from 24850/25010 where I will again be a buyer with a higher 24695 ‘Closing Stop’. If I am taken long, I will have a T/P level at 25150. I still do not want to be short the NDX at this time.
December BUND
I am still long the Bund at 127.30 with the same 127.70 T/P level. I will add to this trade at 126.60 while leaving my 125.95 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
No Change: I am still flat. I have no interest in chasing the price of Gold higher. Neither do I want to be short. As a result, I will wait for a sell-off to initiate a new long position. If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
Overnight, Silver has surged to new all-time highs. This against a backdrop of an RSI over 90. This latest surge saw Silver trade the whole of my sell range for a now 65.40 average short position. I will leave my 67.05 ‘Closing Stop’ unchanged while raising my T/P level to 64.90. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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