U.S. Equity Markets had a strong finish after the World Health Organization stepped up efforts to combat the coronavirus by declaring a global health emergency. The S&P 500 Index erased losses after WHO said travel and trade restrictions were not necessary, removing at least temporarily a threat to the economy. The organization also commended China’s efforts to contain the disease. Equities have been under pressure since the outbreak last week, while havens from Treasuries to Gold have rallied as investors fretted the virus would derail fragile growth around the world. While the virus continues to spread and the human toll mounts, the WHO comments suggested that efforts to contain the outbreak are robust. For investors worried about the impact on global growth, that was enough to halt a flight from risk assets in the final hour of U.S. equity trading. A key slice of the Treasury yield curve inverted for the first time since October, which may be a signal that traders are concerned about policy makers’ ability to counter headwinds as the coronavirus threatens to disrupt global growth. Federal Reserve Chairman Jerome Powell said Wednesday that the viral outbreak will likely hit the Chinese economy and could spill wider, but it was too early to judge what impact it would have on the U.S. Elsewhere, China’s offshore Yuan briefly weakened past 7 for the first time this year. Oil slumped on growing alarm that the coronavirus outbreak is crippling fuel demand, prompting OPEC to consider an emergency meeting. Copper tumbled for 12 straight sessions in London, the longest retreat in more than three decades of data. The pound jumped just before the Bank of England surprised the market by voting 7-2 to keep its key rate unchanged.
To mark my 2000th 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 180 points yesterday and is now ahead by 2149 points for January, having made 818 points in December, 780 points in November, 1649 points in October, 1620 points in September and 2387 points in August. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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Equities
Corporations are grappling with the rapidly spreading of the coronavirus that threatens a key growth market. Tesla Inc. expects a production delay in China, McDonald’s Corp. and Starbucks Corp. closed thousands of stores combined in the country while Apple Inc. is preparing for supply-chain disruptions. The hit to the world’s second-largest economy could exceed that seen during the SARS outbreak of 2003, according to Nomura Holdings Inc.
Traders also assessed a flurry of corporate earnings, with a rally in Microsoft Corp., Tesla and Coca-Cola Co. driven by solid results offsetting United Parcel Service Inc. and Facebook Inc.’s declines. Carnival Corp. sank as a cruise ship owned by the company was to remain in an Italian port until Friday, even after tests showed that a passenger who came down with fever and respiratory symptoms didn’t have coronavirus.
The S&P 500 advanced 0.3% to close at 3284.
The Dow Jones Industrial Average rose 125 points to close at 28,859, having hit an intra-day low of 28475.
The Stoxx Europe 600 Index decreased 1%.
The MSCI Emerging Market Index dipped 2.2%.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Bloomberg Dollar Spot Index fell 0.1%.
The Euro advanced 0.2% to $1.1033.
The Japanese Yen appreciated 0.1% to 108.89 per dollar.
Bonds
The yield on 10-year Treasuries fell one basis point to 1.57%.
Germany’s 10-year yield dipped three basis points to -0.41%.
Britain’s 10-year yield climbed three basis points to 0.542%.
Commodities
The Bloomberg Commodity Index dipped 0.9%.
West Texas Intermediate crude sank to $52.14 a barrel.
Gold advanced 0.8% to $1,589.20 an ounce.
This morning on the Economic Front we already had the release of German Retail Sales which fell 3.3% versus – 0.5% expected. At 9.30 am we have UK Consumer Credit, Money Supply, Mortgage Approvals and Net lending to Individuals. This is followed at 10.00 am by Euro-Zone GDP and CPI. Next, we have U.S. Personal Spending, PCE and the Employment Cost Index, Finally, we have the Chicago Purchasing Managers’ Index and the University of Michigan Consumer Sentiment Index at 2.45 pm and 3.00 pm respectively.
March S&P 500
A remarkable trading session yesterday. Just when we looked like we were finally going to test the 50 Day Moving Average and end the month with a serious decline the buy the dip managed to rally the S&P 50 Handles into the close. In my Opinion the Fed will do what ever it takes to keep the stock market from falling especially ahead of the Presidential Election in November. My S&P plan worked well with the market trading the whole of my buy level for a 3248 average long position before rallying to my 3255 T/P level. Subsequently the S&P tested the 3242 level before rallying to hit my 3290 sell level just before the close. As I did not want to have a position overnight I emailed my Platinum Members to exit any short position at 3289 and I am now flat. The VIX which spiked above 18 at one stage closed 5% lower at 15.46. While I may not agree with the explosive rally in the last hour of trading last night I have to respect the price action. For this reason, I will now look to buy the S&P on any further dip lower to 3258/3270 with a 3247 stop. If the S&P can build value above 3280 I will then look to move my buy level higher next week. As today is the end of the month I no longer want to be short the S&P at this time.
EUR/USD
I am still flat the Euro and today I will continue to be a buyer from 1.0955/1.0995 with the same 1.0915 stop.
March Dollar Index
I am still short at an average level of 97.70. I have this position too long and I will now raise my T/P level to 97.60 while leaving my stop unchanged at 98.12. If any of the above levels are hit I will be back with a new update for my Platinum Members.
March DAX
My DAX plan worked well with the market trading lower to my 13170 buy level before rallying to my 13205 T/P level and I am now flat. The Economic situation in Germany just seems to be getting worse as shown by this morning’s 3.3% fall in Retail Sales. Yet the stock market refuses to sell-off. Remember a market than cannot fall on bad news has to be respected. Today I will be a small buyer from 13070/13130 with a 13025 stop.
March FTSE
My FTSE plan also worked well with the market trading lower to my 7315 buy level before rallying to an overnight high of 7372. This move higher enabled me to cover this position at my 7335 T/P level and I am now flat. Given the extent of the sell-off over the past two weeks I am still a buyer of this market on dips. The FTSE has support from 7260/7300 and I will be a buyer in this area with a 7215 stop.
Dow Rolling Contract
Overnight the Dow rallied to my 28900 sell level with a high of 28928. Frustratingly I emailed my Platinum Members to raise their sell level and we were not filled. If you did sell the Dow at my sell range I would take your 100 point gain now and go flat. The Dow is at a critical juncture, building value below 28550 is bearish while building value above 28800 is bullish. Both of these levels were tested yesterday before we saw the late 400 point rally into the close. Today I will be a small buyer from 28500/28650 with a 28395 stop. Ahead of the weekend I do not want to be short the market at this time.
March NASDAQ
My NASDAQ plan worked well with the market trading lower to my 9020 buy level before rallying to my 9065 T/P level and I am now flat. The NASDAQ exploded into the close and is now trading at 9180. This price action has to be respected and I will now look to buy the market on any dip lower to 9090/9150 with a 9045 stop.
March BUND
I am still flat the Bund and today I will leave my 174.70/175.10 sell level unchanged with the same 175.45 stop.
Gold Rolling Contract
With Silver continue to struggle I do not trust the latest rally in Gold. Today I will leave my 1540/1552 buy level unchanged with the same 1532 stop.
Silver Rolling Contract
I am still flat and today I will raise my buy level to 17.10/17.50 with a higher 16.70 stop.
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