U.S. Indices closed in the red on Friday, as they initially saw two-way action on the US jobs report (more below), before the move lower began in the wake of the University of Michigan metrics whereby all the three main measures printed below consensus and outside the forecast range, with inflation expectations for both the short term and longer-term horizon lifting. Nonetheless, the move was notably accentuated, along with Dollar and Treasury strength accompanied by oil weakness upon Reuters source reports noting US President Trump told Republican lawmakers he plans to issue reciprocal tariffs as early as Friday, an article which was notably vague. Later, Trump confirmed they will meet on reciprocal tariffs on Monday or Tuesday, and have an announcement, but lacked any further details. Prior to this, FT sources noted EU is reportedly set to offer lower tariffs on US cars as part of a deal to avoid a trade war with Trump. Within the piece, it added Bernd Lange, who heads the trade committee in the European Parliament and is familiar with talks on how to de-escalate tensions with the White House, the bloc was willing to lower its 10% import tax closer to the 2.5% charged by the US. In addition, Trump met with Japanese PM Ishiba and gave a press conference, whereby after conflicting reports said Nippon Steel (NPSCY) is looking at an investment in US Steel (X) and Japan looking at an investment into US Steel, not a purchase. Elsewhere, there was plenty of Fed speak again, with plenty stressing a wait-and-see approach while noting the labour market is good but not as hot as it once was, settling in at full employment. The monetary policy report was also released, which echoed recent Fed sentiment, ahead of Fed Chair Powell’s testimonies this week. Aside from Powell, attention this week lies on US CPI and PPI data. US sectors all finished in the red, most notably Consumer Discretionary as Amazon’s (AMZN, -4%) downside weighed due to AWS revenue and guidance being disappointing. The US economy added 143k jobs in January, beneath the expected 170k, falling from the prior 307k, which was revised up from 256k. The two-month net revisions were also strong, +237k, with strong revisions offsetting the miss in the headline. Meanwhile, the Unemployment rate fell to 4.0% from 4.1%, despite expectations for it to be left unchanged, while participation also increased. Wages were hot, with average earnings rising 4.1% Y/Y, despite expectations of a slowing to 3.8% from 3.9% – although the Fed has noted several times the labour market is not a source of inflation, easing the inflationary concerns of hot wage metrics. Within the January report, the BLS released the final annual revisions, to show actual employment was lower by 589k, albeit this is not as bad as the preliminary estimate suggested in August. Overall, the labour market still remains healthy with the unemployment rate ticking down despite the NFP miss, also the revisions were not as bad as the prelim estimate so this will support the Fed’s decision to hold rates for now while they assess, with many on the Fed stressing there is no need to rush. Money Markets currently price in the next rate cut by September, with an 84% probability of it occurring in July, and a 64% probability of it occurring in June, while there is a c. 50% probability of a second rate cut by year-end. The University of Michigan headline sentiment fell to 67.8 from 71.1, shy of the expected 71.1 and outside the bottom end of the forecast range. Conditions and Expectations came in at 68.7 (exp. 73.0, prev. 74.0) and 67.3 (exp. 70.0, prev. 69.3), respectively, both beneath the lower end of the analyst consensus range. One Year inflation expectations lifted to 4.3% from 3.3%, while the longer-term 5 Year notably raised to 3.3% from 3.2%. Within the report it notes “the decrease was pervasive, with Republicans, Independents, and Democrats all posting sentiment declines from January, along with consumers across age and wealth groups.” It further adds, “all five index components deteriorated this month, led by a 12% slide in buying conditions for durables, in part due to a perception that it may be too late to avoid the negative impact of tariff policy.” Ahead, the report concludes, “Expectations for personal finances sank about 6% M/M, again seen across all political affiliations, reaching its lowest value since October 2023. Many consumers appear worried that high inflation will return within the next year.” Fed Member Kugler, speaking post Jobs report, said that in considering the appropriate policy rate, she will watch developments and carefully assess the data, outlook and risks. She noted the US economy is on a firm footing, and expects a solid GDP growth in Q1. Kugler said the January jobs reports shows the US labour market is healthy, neither weakening nor overheating. She added that recent progress on inflation is slow and uneven, and inflation remains elevated. Kugler sees considerable uncertainty on economic effects of new policy proposals, noting continued productivity gains would help the Fed attain goals, highlighting the role of Latino immigrants to growth. In the press conference, Kugler echoed that a stable labour market gives the Fed time to make decisions, noting they are not yet at 2% inflation and it makes sense to hold rates steady. She stressed she needs to see continued slowing of inflation to feel comfortable cutting rates, and she is concerned that they are not getting as much help with goods inflation, but it is good that housing inflation came down in Q4. She added the she believes the neutral rate has gone up, but not as much as some others think it has, but they are not quite at the neutral rate yet. Speaking post-data, Fed Member Goolsbee said it was a solid report and looks like they are settling into full employment. The Chicago Fed President noted short term inflation expectations are not as important as long-term ones, and that longer-run market based inflation expectations show the market believes the Fed will get inflation to 2%. He added the Fed is on hold now, but over the next 12-18 months the policy rate will be a fair bit below where it is now. On rate reductions, he noted the speed at which rates come down will be slower with more fogginess. Re. neutral rate, stated it will take longer than end-2025 to get to neutral policy rate. Elsewhere, Oil closed 0.59% higher while Gold closed flat.
To mark my 3125th issue of TraderNoble Daily Commentary I am offering a special 2-Year rate of Euro 2750 for my Platinum Service which includes 1 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 680 points on Friday and is now ahead by 1415 points for February, after closing January with a gain of 2768 points, after closing December with a gain of 1997 points after closing November with a gain of 3049 points having finished October with a gain of 2179 points. September saw a gain of 4402 points following a 301-point loss for August after closing July with a gain of 1918 points while June closed with a gain of 2074 points, having made 1843 points in May. The Platinum Service made 4010 points in April after ending March with a gain of 2113 points. February closed with a gain of 1606 points, after closing January with a gain of 3675 points. December saw a gain of 1890 points after finishing November with a gain of 1734 points. October ended with a gain of 3184 after closing September with a small gain of 228 points, after finishing August with a gain of 1485 points, following a small gain of 285 points gain in July, after closing June with a gain of 2683 points. May closed with a gain of 3205 points. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made a record 9619 points last October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1900 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 0.95% lower at a price of 6025.
The Dow Jones Industrial Average closed 444 points lower for a 0.99% loss at a price of 44,303.
The NASDAQ 100 closed 1.3% lower at a price of 21,491.
The Stoxx Europe 600 Index closed 0.38% lower.
Last Friday, the MSCI Asia Pacific closed 0.3% lower.
Last Friday, the Nikkei closed 0.72% lower at a price of 38,787.
Currencies
The Bloomberg Dollar Spot Index closed 0.38% higher.
The Euro closed 0.5% lower at $1.0330.
The British Pound closed 0.7% lower at 1.2402.
The Japanese Yen rose 0.6% closing at $151.38.
Bonds
Germany’s 10-year yield closed 1 basis points lower 2.38%.
Britain’s 10-year yield closed 4 basis points higher at 4.48%.
U.S.10 Year Treasury closed 9 basis points higher at 4.49%.
Commodities
West Texas Intermediate crude closed 0.59% higher at $71.03 a barrel.
Gold closed 0.2% lower at $2860 an ounce.
This morning on the Economic Front we have Euro-Zone Sentix Investor Confidence at 9.30 am. Next, we have U.S. CB Employment Trends Index at 3.00 pm. Finally, we have Michigan Inflation Expectations at 4.00 pm.
Cash S&P 500
The 2025 trend continues: Rips, Flips and broken wedges with lower highs. However, the last two trading sessions including Friday again highlights how difficult this tape is for anyone trying to short the market with the S&P hitting a post NFP high at 6101 – 60 Handles above where we trading at 8.30 pm on Thursday night. Subsequently, we saw a strong reversal into the close with the S&P falling 75 Handles. One of these days a reversal such as we saw on Friday will mean something. The big question is if weakness can finally sustain anything beyond a Monday Market Open which has been the trend of the past two weeks. Seasonality says yes which is one of the reasons why I have had no buy levels over the past few trading sessions. The idea of selling rips against this negative backdrop has worked well since Thursday’s Daily Commentary was posted. The S&P traded lower to my 6048 T/P level on Wednesday’s late 6063 short position. Subsequently, I emailed my Platinum Members to sell the S&P again which we did at a price of 6098 before selling off to my 6078 T/P level and I am now flat. The S&P has support below from 5950/5970 where I will be a small buyer with a 5935 ‘’Closing Stop’’. The S&P has resistance from 6062/6078 where I will again be a seller with a 6093 tight ‘’Closing Stop’’.
EUR/USD
The Euro traded lower to my 1.0360 buy level. I am still long and I will add to this position on any further move lower to 1.0290 with a now lower 1.0235 ‘’Closing Stop’’. I will now lower my T/P level to 1.0405. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
My latest 107.50 long Dollar position worked well as the market rallied to my 107.90 T/P level and I am now flat. Today, I will Again be a buyer on any dip lower to 107.00/107.60 while leaving my 106.35 ‘’Closing Stop’’ unchanged. I still do not want to be short the Dollar at this time.
Russell 2000
The Russell has outperformed the other main American Index over the past few trading sessions. I am still flat as the market never came close to Thursday’s buy range. I will not chase the Russell higher as I continue to be a buyer on any further dip lower to 2170/2230 with the same 2115 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2270.
Cash FTSE
The Bank of England rate cut on Thursday helped the FTSE to trade to new all-time highs. I am still short at an average rate of 8635 with the same 8725 ‘’Closing Stop’. Despite the FTSE trading in a severely overbought condition, I will now raise my T/P level to 8620. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
The Dow has traded all over the map since Thursday’s DC was posted. The Dow traded higher tom my 44870-sell level before trading lower to my revised 44745 T/P level and I am now flat. The Dow hit a [post NFP high at 44850 before falling over 500 points into Friday’s close. As I mentioned in my S&P commentary above, it will interesting to see if Friday’s reversal sticks or is another opportunity for Retail to aggressively buy the market again. The Dow has support below from 43900/44150 where I will be a small buyer with a 43695 ‘’Closing Stop’’. I do not want to be short the Dow at this time especially as we have CPI and PPI to look forward to over the next couple of days.
Cash NASDAQ 100
It took a while but finally my NDX plan worked well. On Friday the NDX traded higher to my second sell level at 21785 for a 21705 average short position. Subsequently, the NDX traded lower to my revised 21610 T/P level, and I am now flat. Today, I will be a seller on any further rally to 21650/21810 with a lower 21955 ‘’Closing Stop’’. The NDX has short-term support at its 50 Day Moving Average which comes in at a price of 21380 this morning. I will be a buyer from 21200/21350 with a 20055 tight ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 21530. If I am taken long, I will have a T/P level at 21480.
March BUND
No Change: The Bund traded in a narrow 70-point range over the past two trading sessions, and I am still flat. Given how Bund Yields are trading, I will continue to be a seller on any further rally to 133.90/134.60 with a higher 135.15 ‘’Closing Stop’’.
Gold Rolling Contract
Gold traded in a narrow range on Thursday and Friday with Thursday’s 2830 low attracting buyers. I am still flat. Gold has further resistance from 2890/2906 where I will again be a small seller with a higher 2921 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 2874.
Silver Rolling Contract
My Silver plan worked well as the market traded lower to my 31.70 buy level before rallying to my 32.40 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 30.30/31.10 with a lower 29.35 ‘’Closing Stop’’.
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