U.S. Indices were lower on Wednesday, primarily due to losses in AI-related names, namely semiconductors, software, memory and robotics. That said, breadth was very strong highlighted by the Equal-Weight RSP, +0.9%. Energy, Materials, and Staples, the best three performing sectors Year-To-Date continue to see gains given their little exposure to the AI complex (AAPL outperformed in Tech +2.6%) while Healthcare was boosted by a strong Eli Lilly (LLY) earnings report. Back to tech, AMD earnings contributed to downside in the space, as valuation concerns remain, particularly over expenses, despite beating on quarterly metrics and guidance. Precious metals also saw downside at the US equity open alongside crypto, with Gold reversing earlier gains, albeit losses were limited given the increased US-Iran tensions. Macro-moving updates came via US-Iran tensions, with crude prices rallying after Axios reported that the nuclear talks scheduled for Friday had been cancelled as the US disagreed with the location and Iran’s desire to exclude non-nuclear issues from the talks. That said, both Axios and the Iranian Foreign Minister said the talks are back on in Oman, with the former adding it comes amid several Arab and Muslim leaders urgently lobbied the Trump administration on Wednesday afternoon not to follow through on threats to walk away. Crude prices rallied on headlines that the talks were cancelled before trimming gains after the second wave of updates. Other developments came via US data whereby ADP Employment Change eased in January beneath expectations, whilst the ISM Services PMI reading was encouraging on the headline yet contained poor internals (drop in employment & new orders, rise in prices paid); limited reaction was seen. T-Notes were little changed, trading in a narrow range upon the QRA announcement, which saw quarterly refunding set at USD 125 billion, as expected. Given the passing of the funding bill seen on Tuesday, the BLS rescheduled the JOLTS December report and confirmed the claims report will both be released on Thursday. Rate announcements are expected from the BoE and ECB on Thursday. ISM Services was poor, despite the headline topping expectations at 53.8 (exp. 53.5, prev. 53.8) as Employment tumbled to 50.3 from 51.7 (exp. 52.3) and New Orders dropped to 53.1 from 56.5. Also, the inflationary gauge of prices paid lifted to 66.6 from 65.1. Although business activity rose to 57.4 from 55.2. Supplier deliveries rose, remaining expansionary, inventories fell into contractionary territory, while backlog of orders lifted, but remained beneath 50. New export orders and imports both fell below 50. Overall, Oxford Economics write that robust consumer spending, lower interest rates, and continued AI-related construction will support the sector over 2026. The consultancy further adds that the details of the report reinforce their expectations for the Fed to remain on hold until the middle of the year. Private employers added 22k jobs to the economy in January, shy of the expected 48k, easing from the +41k in December. Leading gains was healthcare (+74k) while the downside was led by manufacturing, which has lost jobs every month since March 2024. Annual pay saw job-stayers tick higher to 4.5% from 4.4% while job-changers fell to 6.4% from 6.6%. Companies employing between 50 and 249 workers added 37k jobs, with small firms flat and large employers down 18k. Dr. Nela Richardson, chief economist at ADP, said, “While we’ve seen a continuous and dramatic slowdown in job creation for the past three years, wage growth has remained stable.” Pantheon Macroeconomics still believes that the labour market will remain weak in H1 overall, pressuring the FOMC to begin easing policy again. Elsewhere, Gold reversed earlier gains, closing lower by 0.33% while Oil was firm ending Wednesday’s trading with a gain of 1.7%.
To mark my 3325th 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 448 points yesterday and is now ahead by 1643 points for February, after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, 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 0.51% lower at a price of 6882.
The Dow Jones Industrial Average closed 260 points higher for a 0.63% gain at a price of 49,501.
The NASDAQ 100 closed 1.77% lower at a price of 24,891.
The Stoxx Europe 600 Index closed 0.19% higher.
This Morning, the MSCI Asia Pacific closed 0.5% lower.
This Morning, the Nikkei closed 0.88% lower at a price of 53,818.
Currencies
The Bloomberg Dollar Spot Index closed 0.26% lower.
The Euro closed 0.24% higher at $1.1818.
The British Pound closed 0.23% higher at $1.3696.
The Japanese Yen fell 0.02% closing at $155.68
Bonds
U.K.’s 10-Year Gilt closed 3 basis points higher at 4.56%.
Germany’s 10-Year Bund Yield closed 3 basis points lower at 2.86%
U.S.10 Year Treasury closed 1 basis points lower at 4.28%.
Commodities
West Texas Intermediate crude closed 1.72% higher at $64.30 a barrel.
Gold closed 0.33% lower at $4912.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone and U.K. Construction PMI at 8.30 am, 8.35 am and 9.30 am respectively. Next, we have Euro-Zone Retail Sales at 10.00 am. This is followed by the Bank of England Rate Announcement at 12.00 pm and the ECB Rate Decision at 1.15 pm. At 1.30 pm we have U.S. Weekly Jobless Claims, followed by ECB President Lagarde’s press conference at 1.45 pm. Finally, we have a speech from Fed Member Bostic at 3.50 pm.
Cash S&P 500
Stocks fell on Wednesday, but the S&P 500 declined by only 0.5% following another volatile session that witnessed plenty of two-way price action. However, the S&P 500 equal-weight ETF RSP rose by nearly 0.9%, which is notable dispersion from yesterday’s session. This was noted in the Dispersion index, which rose to 37.6, and is again reaching the upper end of its historical range. With earnings season winding down, I expect market dispersion to fade and correlations to rise more steadily. The dispersion index, minus the 3-month implied correlation index spread, has risen. Again, this spread should be positioned to contract over the next couple of weeks as earnings season winds down and these dispersion trades unwind. One reason we may be seeing so much strength in Walmart and the “staples” is that implied volatility has been rising, as it normally would heading into earnings season, but this year, IV appears to be heading much higher than in previous quarters. Walmart does not report results until February 19, and most retailers report earnings later in the season, so it is quite possible that the reason we have seen so much strength in the XLP is not that or a rotation, but rather the same dispersion trade we saw pre-tech earnings. Rates rose Wednesday by around 2 basis points on the 30-year to 4.92%, so here we go again. Testing the upper end of resistance, will it break out? Who knows. Rates have every reason to rise for weeks, yet they do not; they are frozen in time. The 30-year could easily be over 5% at this point, yet we still wait. The QRA continues to hint at increasing issues on the long end, but it has not yet occurred. The QRA noted that the TGA is expected to exceed $1 trillion around tax season, representing a $150 billion increase from current levels. That is a lot of liquidity coming out of the market, and the Fed’s T-bills will just dilute that, not offset it, based on my rough maths. Then, New Fed Chair Warsh will come in May, and then I have no idea what will happen with the balance sheet. Liquidity is likely to remain tight for some time longer. My S&P plan worked well yesterday. After the S&P hit my buy range for a 6874 long position the market rallied to my revised 6892 T/P level. Subsequently, the S&P hit a low at 6838. This move lower saw my latest buy level at 6840 triggered as emailed to my Platinum Members before rallying to my 6862 T/P level and I am now flat. Just like Tuesday the S&P surged into the close and again in after hours trading, hitting an overnight high of 6912. As I go post the S&P is trading at 6890. The S&P has strong support below from 6810/6835 where I will be an aggressive buyer with a lower 6789 wider ‘Closing Stop’. My only interest in selling the S&P is from 6980/7005 with the same 7027 ‘Closing Stop’. If I am taken long, I will have a T/P level at 6872. If I am taken short, I will have a T/P level at 6957. If these views change, I will be back with a new update for my Platinum Members.
EUR/USD
I am still flat as the Euro never came close to Wednesday’s buy range. Ahead of the ECB Meeting today I will now lower my Euro buy level to 1.1650/1.1730 with a lower 1.1585 ‘Closing Stop’. If I am taken long, I will have a T/P level at 1.1805.
Dollar Index
I am still flat. Today, I will continue to be a buyer on any further dip lower to 96.00/96.80 with the same 95.35 ‘Closing Stop’. If I am taken long, I will have a T/P level at 97.30.
Russell 2000
Frustrating! The Russell just missed my 2675 initial sell level by nine points before selling off into close. Small Caps have been very weak over the past two weeks. This morning, the Russell is trading at a price of 2630. The Russell has support below from 2500/2560 where I will be a buyer with a 2445 ‘Closing Stop’. If I am taken long, I will have a T/P level at 2610.
FTSE 100
The FTSE surged to new all-time highs before going on hold ahead of this afternoon’s Bank of England Rate announcement at 12.00 pm. This latest surge saw the whole of my sell range triggered for a now 10400 average short position. I will leave my 10505 ‘Closing Stop’ unchanged while raising my T/P level to 10340. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
No Change: The Dow continues to trade in wide ranges and I am still flat. Given valuations I am finding it hard to be a buyer even though buying the market last week worked well. I would prefer to see a more sustained sell-off before putting on a macro long position. This morning the Dow is trading at a price of 49445 as I go to post. With 50,000 ‘’close by’’ it would make sense for this round number pivot point to get tagged first before a meaningful sell-off ensues. Today, I will continue to be a seller from 49900/50200 with a higher 50405 ‘Closing Stop’. If I am taken short, I will have a T/P level at 49560.
Cash NASDAQ 100
The NDX got hit hard yesterday. Despite a late rally the NDX still ended Wednesday’s session with a 2% fall. The NDX will have strong resistance from 25450/25600 where both the 20-Day and 50- Day Moving Averages are situated. I will be a small seller on any rally to this range with a lower 25755 ‘Closing Stop’. If I am taken short, I will have a T/P level at 24280. I still do not want to be a buyer of the NDX at this time. If this view changes I will be back with a new update for my Platinum Members.
December BUND
The Bund had a small rally to my revised 127.98 T/P level on Tuesday’s 127.50 long position and I am now flat. Today, I will again be a buyer from 126.70/127.50 with the same 126.15 ‘Closing Stop’. If I am taken long, I will have a T/P level at 128.00. If this view changes I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Plenty of two-way price action in both Gold and Silver over the past 24 hours with wide price ranges seen in both precious metals, helped by Bitcoin testing $70,000 overnight. Bitcoin has now lost a huge $600 billion in value in the past four weeks. I am still flat Gold. Overnight the market hit a low at 4790 which is just above my buy range from yesterday. I will not chase the market higher as I continue to be a buyer on any further dip lower to 4650/4730 with the same 4495 ‘Closing Stop’. If I am taken long, I will have a T/P level at 5010. If this view changes I will be back with a new update for my Platinum Members.
Silver Rolling Contract
Wow! Silver having hit a high above $92 yesterday managed to crash almost $19, by hitting a low overnight at 73.50. I cannot emphasise how important it is to trade these precious metals in small size so you are able to withstand these wide price movements. This move lower saw the whole of my buy range triggered for a now 80.70 average long position. I will leave my 77.55 ‘Closing Stop’ unchanged while lowering my T/P level to 81.80. If any of the above levels are hit, I will be back I will be back with a new update for my Platinum Members.
Please Note: There will be no Daily Commentary tomorrow. Any of my calls that are not executed today and are subsequently triggered on Friday will see me return with updated emails for my Platinum Members.
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