It was a choppy session to end the week with Thursday’s risk-off tone initially seeping into Friday’s trade amid ongoing concerns over AI valuations and following more weak data with the University of Michigan Consumer Survey painting a bleak picture of consumer sentiment amid the government shutdown. Stocks hit lows just after Europe left for the day before the downside gradually started to pare. A lift was seen in late trade on the Democrats offering a compromise by proposing a one-year extension of Obamacare subsidies to end the government shutdown. However, Republicans swiftly rejected this – but stocks stayed near highs into the closing bell with the S&P closing unchanged while the RSP and RUSSELL 2000 outperformed. The NASDAQ 100 lagged as big tech stocks were still pressured ex-Amazon, with NVIDIA weighed on after reports the US is to block NVIDIA’s sale of scaled-back AI chips to China. In FX, the U.S. Dollar was sold on weak US data again but off lows on the end of government shutdown hopes while the Canadian Dollar was the clear outperformer after a very strong jobs report. The Japanese Yen lagged amid the turn around in the risk-tone. T-Notes were little changed by settlement but upside was seen during the downbeat part of the session, with weakness seen as the risk environment improved. Attention this week is on supply. Crude and Gold prices were also choppy amid the choppy risk tone but Gold held onto its gains and traded either side of $4000, while crude settled green but closed the week red for the fifth time in six weeks. The Preliminary University of Michigan data for November was dismal. Sentiment fell to 50.3 from 53.6, and beneath the expected 53.2, while both Conditions and Expectations fell beneath the bottom end of the forecast range with the latter even tumbling into contractionary territory. Numerically, Conditions printed 52.3 (exp. 59.2, prev. 58.6) and Expectations 49.0 (exp. 50.3, prev. 50.3). 1yr inflation expectations ticked higher to 4.7% from 4.6%, with 5yr moving lower to 3.6% from 3.9%. Surveys of Consumers Director Hsu noted that with the government shutdown dragging on, consumers are now expressing worries about potential negative consequences for the economy. November’s fall in sentiment was widespread throughout the population, seen across age, income, and political affiliation. Hsu does note there was one key exception: consumers with the largest third of stock holdings posted a notable 11% increase in sentiment, supported by continued strength in stock markets. The October New York Fed SCE saw inflation expectations ease to 3.2% from 3.4% in the one-year forecast, while 3-year and 5-year forecasts were maintained at 3.0%. Unemployment rate and job finding expectations worsened, while job loss expectations slightly improved. Spending and household income growth expectations remained largely unchanged. Perceptions and expectations about credit availability improved, but respondents were somewhat less optimistic about their future household financial situation. The highlight of the report was that consumers’ perceptions of the jobs market worsened, while inflation perceptions improved – which would support the argument of doves on the Fed that they need to act and focus on the labour side of the mandate, but the hawks believe the Fed is missing more greatly on the inflation side. Vice Chair Jefferson said that policy decisions are taken meeting by meeting, and he added he supported the 25bps cut last week, as we already knew due to the vote composition. Jefferson noted policy rate is somewhat restrictive after the latest cut, and the Fed will proceed slowly as policy approaches neutral. He noted risks have shifted with downside employment risks rising. On data, Jefferson remarked the Fed still has a lot of data on the economy despite lack of official reports, and has enough data to make policy, but said it is not a question that official data is the gold standard. Finally, New York Fed President Williams said the Fed may soon embark on reserve management bond buying, which is technical, not a signal on monetary policy. He added the fed rate control toolkit has been working well, and he expects standing repo facilities to see active use as needed. Elsewhere, Oil closed higher by 0.5% while Gold ended a volatile week’s trading with a gain of 0.6% on Friday.
To mark my 3275th 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 1272 points on Friday and is now ahead by 2507 points for November, 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 0.13% higher at a price of 6729.
The Dow Jones Industrial Average closed 74 points higher for a 0.16% gain at a price of 46,987.
The NASDAQ 100 closed 0.28% lower at a price of 25,060.
The Stoxx Europe 600 Index closed 0.55% lower.
Last Friday, the MSCI Asia Pacific closed 0.8% lower.
Last Friday, the Nikkei closed 1.19% lower at a price of 50,276.
Currencies
The Bloomberg Dollar Spot Index closed 0.19% lower.
The Euro closed 0.17% higher at $1.1565.
The British Pound closed 0.24% higher at $1.3166.
The Japanese Yen rose 0.38% closing at $153.38
Bonds
U.K.’s 10-Year Gilt closed 1 basis points higher at 4.48%.
Germany’s 10-Year Bund Yield closed 2 basis points lower at 2.66%
U.S.10 Year Treasury closed 7 basis points lower at 4.09%.
Commodities
West Texas Intermediate crude closed 0.54% higher at $59.55 a barrel.
Gold closed 0.58% higher at $4001.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone and U.K. Composite PMI at 8.55 am, 9.00 am and 9.30 am respectively. This is followed by Euro-Zone Retail Sales at 10.00 am. Next, we have the Bank of England Rate Announcement at 12.00 pm followed by a press conference with Governor Bailey at 2.15 pm. Finally, we have speeches from Fed Members Barr and Williams at 4.00 pm and 4.10 pm respectively.
Cash S&P 500
The S&P 500 sold off sharply on Friday afternoon but recovered throughout the day. The VIX fell hard all afternoon, which led me to believe that what we were seeing on Friday were ‘PUT’’ positions being closed ahead of the weekend, on the risk that the government shutdown might be resolved. The VIX peaked around noon at 22.7 and fell throughout the afternoon, finishing the day at 19. Traders were right to cover short positions on Friday as the Fear & Greed Index hit a new Post April low at 13. On Sunday President Trump announced ‘’A dividend of at least $2000 a person (not including high income people!) will be paid to everyone,” Trump posted on Truth Social, adding that tariffs have brought in “trillions of dollars,” and that 401(k) accounts are the “Highest EVER.” He also claimed that the tariffs had caused “No inflation.” “People that are against Tariffs are FOOLS!” he continued. It is so hard to be short the markets despite valuations at unprecedented and unsustainable levels. However, the VIX 1-Day closed at 16.9, which is still somewhat elevated, so it would not be surprising to see the rally continue on Monday, at least through the first part of the day. That said, Wednesday and Thursday will be Treasury settlement dates, with $14 billion and $23 billion settling, respectively. That should bring some of those overnight funding pressures we have witnessed in recent weeks. Although I doubt it will be nearly as bad as what was seen at the end of October. In the meantime, the TGA is targeting a year-end total of around $850 billion, and, as a rule of thumb, the Treasury typically likes to keep at least one week’s worth of liquidity in the account. With the TGA currently at about $950 billion, there is roughly $100 billion too much sitting in it. This means that when the government reopens, we will likely see the TGA fall by about $100-$200 billion. However, if it drops below $850 billion, the Treasury will likely refill it to that level. So, by that measure, there is not a massive amount of fiscal QE entering the system. The TGA should not drop back to the near-zero levels seen during the debt ceiling period—and if it does, it will just be replenished, as per the Treasury’s latest Quarterly Refunding Announcement, last week. My S&P plan worked well over the past two trading sessions. Initially the S&P hit my 6748-buy level before rallying to my 6773 T/P level. Subsequently, I emailed my Platinum Members to buy the S&P again at 6720 before rallying to my 6748 T/P level. Finally, on Friday morning the S&P traded the whole of my next buy range for a 6696 T/P level with a low of 6632. Just before the close and to reduce risk over the weekend, I covered this position at 6712 and I am now flat. In hindsight, I covered this position too early given the $2000 Tariff Rebate announcement with the S&P expected to fly when it re-opens at 11.00 pm this evening. The S&P has short-term resistance from 6770/6790 where I will be a small seller with a 6811 ‘Closing Stop’. The 50 Day Moving Average for the S&P is at 6670. Any tag of this level will attract strong buying especially given the number of technical signals that I follow are severely oversold. Therefore, I will be a buyer from 6680/6700 with a 6655 wider ‘Closing Stop’. If I am taken short, I will have a T/P level at 6748. If I am taken long, I will have a T/P level at 6730.
EUR/USD
The Euro just missed Thursday’s 1.1440 initial buy range before rallying 100 points and I am still flat. Today, I will raise my buy level to 1.1400/1.1480 with a higher 1.1335 ‘Closing Stop’. If I am taken long, I will have a T/P level at 1.1540. I still no longer want to be short the Euro at this time.
Dollar Index
No Change: Today, I will continue to be a buyer on any dip lower to 98.50/99.20 with the same 97.85 ‘Closing Stop. If I am taken long, I will have a T/P level at 99.80. I no longer want to be short the Dollar at this time.
Russell 2000
My Russell plan worked well with the market trading lower to my 2390 buy level before rallying to my revised 2420 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 2340/2400 with the same 2285 ‘Closing Stop’. If I am taken long, I will have a T/P level at 2440.
FTSE 100
The FTSE continues to find support below 9350, leading the rest of the Global Indexes higher on Friday. Earlier the FTSE hit my 9680-buy level. With markets expected to open higher following the Tariff Rebate announcement from President Trump, I will leave my 9760 T/P level unchanged on this latest long position. I will continue to look to add to this position at 9620 with the same 9575 ‘Closing Stop’. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
My Dow plan worked well as the market traded lower to my 46810-buy level before rallying to my revised 47052 T/P level and I am now flat. With markets expected to surge on the Trump rebate announcement this evening, I will use any further rally to be a seller from 47600/47850 with a higher 48205 ‘Closing Stop’. If I am taken short, I will have a T/P level at 47350.
Cash NASDAQ 100
My NDX plan worked well as the market traded lower to my 25290-buy level before rallying to my revised 25420 T/P level. Subsequently, I emailed my Platinum Members to buy the NDX again which I did at an average price of 24890 before the NDX rallied after Friday’s close to my 25070 T/P level and I am now flat. Friday’s strong rebound came after a successful TAG of the 50-Day Moving Average (24710). This level will again act as strong support on any test. Therefore, I will be an aggressive buyer from 24650/24850 with a 24495 ‘Closing Stop’. The NDX will have resistance at the 20 Day Moving Average which comes in at a price of 25310. I will be a small seller from 25350/25550 with a 25705 ‘Closing Stop’. If I am taken long, I will have a T/P level at 25030. If I am taken short, I will have a T/P level at 25180. If any of these views change, I will be back with a new update for my Platinum Members.
December BUND
No Change: I am still long at a price of 130.00. I will now lower my second buy level to 129.00 with a lower 128.35 ‘Closing Stop’ unchanged. Meanwhile, I will leave 130.20 T/P level unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
No Change: I am still flat. Today, I will continue to be a buyer on any dip lower to 3865/3895 with the same 3842 ‘Closing Stop’. If I am taken long, I will have a T/P level at 3929. If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
I am still flat. Today, I will continue to be a buyer on any dip lower to 45.60/46.60 with the same 44.45 ‘Closing Stop’. If I am taken long, I will have a T/P level at 47.80.
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