U.S. Indexes closed higher on Friday, with the NASDAQ 100 leading gains, although the advance was broad-based, with the equal-weight S&P 500 (RSP) also firmer, highlighting positive underlying breadth. Sectors were predominantly higher, led by Materials, Consumer Discretionary and Technology, while Energy was the clear laggard. Financials and Communication Services also finished modestly lower. The US Non-Farm Payrolls report was the primary driver of market action, with the surprisingly soft release prompting participants to pare Fed rate hike expectations. The dovish repricing supported equities, Treasuries and precious metals, while weighing on the Dollar. The Treasury curve bull steepened following the report, which showed the US economy unexpectedly shed 23k jobs in July, versus expectations for a 91k increase. Prior readings were also revised sharply lower, with June cut by 37k and May by 66k, leaving the two-month net revision at -103k. However, the Unemployment Rate unexpectedly fell to 4.1% from 4.2%, moving further below the Fed’s 4.3% year-end projection, although the decline was accompanied by a lower participation rate. Money markets now see a September rate hike as roughly a coin toss, placing significant focus on next week’s CPI report to further shape Fed tightening expectations. Gold had already been advancing overnight before accelerating to fresh highs following the payrolls report, trading comfortably above USD 4,300/oz, while silver rose above USD 63/oz, supported by the decline in Treasury yields and softer Dollar. In FX, the Dollar underperformed following the weak jobs report, while improved risk sentiment supported the Australian Dollar. The Japanese Yen also strengthened amid narrowing UST-JGB yield differentials and further intervention rhetoric from Japanese officials. Finance Minister Katayama said recent FX moves have not been backed by real demand and reiterated that authorities would not hesitate to intervene. Crude prices settled higher as reported details of the proposed Iran-Oman arrangement appeared unlikely to satisfy the US. However, prices came under pressure after settlement following official commentary that progress is being made with Iran and Oman over the Strait of Hormuz, with the US indicating that it would lift its blockade on Iran if the Strait is reopened without restrictions. Fed Member Barkin said the jobs market is more low hire, low fire and job data does not feel very good, but it is where it is. Barkin added that the best measure of job market health is the unemployment rate. He reiterated commitment to price stability, and he still hears a lot about inflation and cost pressures. Barkin noted that pricing power is evident in business-to-business, but not business-to-consumer, and said he does not think there is wage inflation right now. Lastly, he said that corporate earnings are quite strong; watching them for linkages to the job market. Finally, Fed Member Muslalem said inflation remains too high, with risks tilted toward further price pressures, and argued that monetary policy needs to maintain meaningful restraint. He revealed that he favoured raising rates at the latest FOMC meeting and sees a greater risk of inflation remaining above target, estimating underlying inflation at around 2.5–3% and noting that gradual rate increases would be preferable to more abrupt moves later. Musalem said the labour market has stabilised and is not a source of inflationary pressure, while the economy remains resilient. He also highlighted accommodative financial conditions and elevated asset prices as potential concerns but noted that inflation expectations remain anchored and consistent with the Fed’s 2% target. Elsewhere, Oil closed higher by 1% while Gold surged, ending Friday’s session with a gain of 2.3%.
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For anyone following my Platinum Service it made 20 points last week after closing July with a gain of 8031 points, after ending June with a new record of 10527 points after ending May with a loss of 1104 points, having ended April with a gain of 1730 points, after ending March with a massive gain of 9002 points, having closed February with a strong gain of 5482 points 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 previous 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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