U.S. Indices closed higher on Friday, with Tech leading the gains, and as such the NASDAQ outperformance, which saw tailwinds from Oracle (ORCL) after reports TikTok is to sell its US entity. The haven sectors were lagging with Consumer Staples, Discretionary and Utilities all lagging. Discretionary names were weighed on by Nike (NKE) earnings which saw the stock plummet on weak China sales. T-Notes were lower across the curve with pressure felt from downside in JGBs overnight post the Bank of Japan, and also commentary from Fed’s Williams that he is in no rush to change policy, albeit he believes there is still room to move lower. In FX, the Dollar was bid primarily supported by Japanese Yen weakness. There was a bout of Yen strength in wake of some official jawboning from the Finance Minister Katayama, who said that moves are clearly one-sided and rapid – which is usually a criterion that has to be met before the Finance Ministry intervenes in FX. However, the move did fade. Crude saw gains with price action supported after a Russian oil rig was hit by Ukrainian drones in the Caspian Sea. Gold and silver extended on recent upside with Gold rising above USD 4,350/oz while silver pushed to a fresh record high above USD 67/oz. Speaking on CPI, Fed Member Williams, said the recent data was encouraging and shows more disinflation, although data was distorted in some categories which pushed down the reading. Williams said he will need more to get a good read on inflation and added that new jobs data shows steady private sector job gains. The unemployment rate may have been pushed up by distortions, but it is not a surprising read, and jobs data does not show sharp deterioration in the hiring market. The influential member said data broadly consistent with recent trends and recent Fed cut. When asked about if recent data changes his rate outlook, said it is only a bit of data, there is a lot more due. The New York Fed President does not have a sense of urgency on changing Monetary Policy, and policy is well positioned. Added policy is mildly restrictive, and has some room to get back to neutral. Looking ahead, Williams wants to see how the economy performs as the data comes in, and the Fed is in a good position to balance its goals. On forecasts, he projects GDP growth for this year between 1.5-1.75%, and 2026 GDP around 2.25%. He Expects inflation to come down next year and in 2027, citing one time tariff impact and higher productivity growth. Williams feels pretty good about the economic base case. On the balance sheet, Williams reiterated the Fed is not doing QE, and Fed is buying T-Bills to provide reserves to banking system Current asset buying is not designed to move long-term rates, and it is a technical move. The December University of Michigan Sentiment reading was unexpectedly revised lower to 52.9 from 53.3 (exp. 53.4). Other components were revised lower. Conditions finished at 50.4 from 50.7, and Expectations moved to 54.6 from 55.0. Looking at the inflation expectations, 1 Year shifted higher to 4.2% from 4.1%, while the 5 Year expectation was unrevised at 3.2%. Existing Home Sales rose 0.5% in November to 4.13 million from 4.11 million, falling short of the expected 4.15 million. By region, sales increased in the Northeast and South, showed no change in the West, and fell in the Midwest. NAR Chief Economist Lawrence Yun writes, “Inventory growth is beginning to stall. With distressed property sales at historic lows and housing wealth at an all-time high, homeowners are in no rush to list their properties during the winter months.” The Bank of Japan hiked rates by 25bps as expected, which saw JGBs take a leg lower, weighing on global fixed income. The press conference from Governor Ueda left markets in the dark on when the next rate hike from the BoJ will be. Ueda also noted that they will make a decision on the rate hike after checking the impact on the economy. Once this was digested, the move in the Yen was clearly dovish with the Yen falling, but JGBs remained pressured – as did T-Notes. Elsewhere, Oil closed higher by 1% while Gold was flat.
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 122 points yesterday on Friday is now ahead by 2509 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
Recent Comments