U.S. Equity Markets saw plenty of two-way price action on Friday with an initial rally post-NFP which ultimately was a “dovish” report, where although the headline beat, it was offset by downward revisions, soft wages and rising unemployment. The release saw two-way price action in stocks, bonds and the Dollar. As the dust settled stocks ground higher after the equity open while bonds had more-or-less returned to pre-data levels, although long-end post-NFP yields (30yr) remained firmer on the session with the curve steepening ahead of supply this week, as well as US inflation data. The post-NFP upside to stocks sharply faded as Europe shut up shop for the week and extended into the US close in a move driven by a sharp drop in chip shares, particularly NVDA which fell sub-USD 900/share (started the week at c USD 850/share), on seemingly little news, with some citing profit taking into the weekend or even 0DTE action. On top of this, it is worth noting disappointing Broadcom (AVGO) and Marvell (MRVL) earnings. In FX, the Dollar was ultimately flat while the Japanese Yen outperformed on more hawkish BoJ sources ahead of key wage negotiations this week. The Euro was also little changed on Friday as Reuters sources reveal that ECB policymakers overwhelmingly favour June for the first rate cut, in fitting with signalling from Lagarde on Thursday. Crude prices sold off throughout the session with the downbeat risk tone in the US session also weighing while gold prices saw continued gains to see a peak at USD 2,195/oz. Bitcoin also continued its ramp to briefly rise above USD 70k. Overall, the February jobs report was a dovish one. Although the headline beat at 275k (exp. 200k), the prior saw a chunky revision lower to 229k from 353k. The Unemployment rate saw a notable move higher to 3.9% from 3.7% despite expectations for this to be left unchanged, while the participation rate was left unchanged at 62.5%. The move higher in the Unemployment rate sees the data move closer in line with the Fed year-end median forecast of 4.1%, but this is set to be updated in March. After hot wages in January (supported by one-time impacts, weather & minimum pay boosts), wages eased in February to just a gain of 0.1% M/M with the Y/Y wage gains easing to 4.3% from 4.4% (revised down from 4.5%), with both beneath expectations of 0.3% and 4.4%, respectively. The data gives credence to some of the seasonality concerns observed with the January prints, which largely were all hotter than expected – suggesting it may be a one-off impact but the February CPI report due this week will help either support or push back on this assumption. Regarding Fed implications, Money Markets have moved more dovish and Money Markets now fully price a 25bp cut in June. Market pricing for May is little changed, suggesting markets are still more confident on the first cut taking place in June, in fitting with the majority of analyst forecasts pre-data. Elsewhere, Oil closed 1.17% lower while Gold close higher for the eight consecutive trading session with a rise of 0.6%.
To mark my 2950th 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 200 points on Friday and is now ahead by 892 points for March. 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 points, 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 0.65% lower at a price of 5123.
The Dow Jones Industrial Average closed 68 points lower for a 0.18% loss at a price of 38,722.
The NASDAQ 100 closed 1.53% lower at a price of 18,018.
The Stoxx Europe 600 Index closed 0.02% higher.
Last Friday, the MSCI Asia Pacific closed 0.6% lower.
Last Friday, the Nikkei closed 0.23% higher at a price of 39,688.
Currencies
The Bloomberg Dollar Spot Index closed 0.08% lower.
The Euro closed 0.3% higher at $1.0938.
The British Pound closed 0.9% higher at 1.2858.
The Japanese Yen rose 1.5% closing at $147.05.
Bonds
Germany’s 10-year yield closed 6 basis points lower at 2.27%.
Britain’s 10-year yield closed 2 basis points lower at 4.06%.
U.S.10 Year Treasury closed 4 basis points lower at 4.07%.
Commodities
West Texas Intermediate crude closed 1.17% lower at $78.01 a barrel.
Gold closed 0.6% higher at $2179.10 an ounce.
Today on the Economic Front we have Economic Data of note on either side of the Atlantic. With Clocks having move forward one-hour in America over the weekend, all U.S. Markets will now open and close one-hour earlier London time. At 5.00 pm we have a Three-Year Treasury Auction.
Cash S&P 500
How insane has the mania become for Artificial Intelligence? Some AI company bonds now have negative yields, such as Super Micro Computers. Investors are effectively paying interest to own them. I thought this lunacy had disappeared in January 2023 when total value of outstanding negative-yield bonds had collapsed to zero. But the desire to speculate is so extreme that the absurdity of this ‘’investment’’ is taking the curtain call at what I believe is near the tail end of this mania. Following Friday’s NFP release, the S&P spiked to a new all-time high at 5189 before prices reversed this rising trend falling 70 Handles. Friday’s new all-time high was again unconfirmed by the Dow which topped on February 23, making it four unconfirmed S&P highs since then. The Dow has closed lower for two consecutive weeks while Friday’s late sell-off saw the S&P close slightly lower last week having risen for 16 out of the past 19 weeks. On Thursday, the S&P traded the whole of my sell range for a 5141 average short position. Thankfully my 5161 ‘’Closing Stop’’ held before the S&P traded lower to my 5131 revised T/P level and I am now flat. Given the strength of the negative divergences there is every chance that Friday’s 5189 all-time-high may hold for a few days. As you know every single Key Day Reversal since October has only lasted one session before new highs ensued. Today, I will again be a seller of the S&P from 5152/5170 with a wider 5190 ‘’Closing Stop’’. The S&P has short-term support from 5058/5074 where I will be a strong buyer with a 5043 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 5136. If I am taken long, I will have a T/P level at 5090.
EUR/USD
The Euro again just missed Thursday’s buy range before rallying as expected. I am still bullish the Euro, with a 1.1142 target level which is the high from December 28 last. The next objective is the July 18, 2023, high at 1.1277. This forecast holds as long as we do not close below 1.0700. Today, I will raise my buy level to 1.0840/1.0910 with a higher 1.0765 ‘’Closing Stop’’.
Dollar Index
I am still flat. I will now lower my Dollar sell level to 103.20/103.80 with a lower 104.45 ‘’Closing Stop’’. I still do not want to be long the Dollar at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash DAX
Despite much weaker than expected German Industrial Production on Thursday, the DAX made new all-time highs. The best thing we did is staying away from this severely overpriced market. I still have no edge in the DAX at this time. The RSI is fried to the upside. I just cannot justify a long position here while I still have no interest in been short, as I prefer to sell the American Indexes. If this view changes I will be back with a new update for my Platinum Members.
Cash FTSE
The boring sideways price action in the FTSE shows no sign of ending. Today, I will continue to be an aggressive buyer on any dip lower to 7550/7620 with the same 7495 ‘’Closing Stop’’. If I am taken long, I will have no T/P level for now. If this view changes, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
My Dow plan worked well as the market rallied to my 38880-sell level before selling off to my 38780 T/P level and I am now flat. As I mentioned above the price action for the Dow is heavy given the fact that we have now closed lower for the last two weeks. The Dow has resistance from 38950/39200 where I will be a strong seller with a 39405 wider ‘’Closing Stop’’. I still do not want to be long the Dow at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
Incredible reversal in Nvidia share price saw the NDX fall 400 points from its 18418 latest all-time high. Just when it looked like Nvidia share price was going to breach a $1000, the stock fell 10% from its afternoon high. However, with both Google and Apple shares so oversold and trading outside the bottom of their respective Bollinger Bands, I will continue to be a buyer of the NDX on any further dip lower to 17730/17880 with the same 17595 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 17990.
March BUND
I am still flat as the Bund never came close to Thursday’s buy range. However, given how low the Bund Yield is I am not going to chase the price of the Bund higher. Therefore, I will continue to be a buyer from 131.70/132.40 with the same 130.95 ‘’Closing Stop’’. I still do not want to be short the Bund at this time.
Gold Rolling Contract
Gold hit a new all-time high at 2195 on Friday afternoon, bringing the week’s gain to over 5%. Some profit-taking saw Gold fall $20 in the New York close. As long as Gold holds its strong support at 2050, I will continue to be a buyer of dips. Today, I will raise my buy level to 2118/2134 with a wider 2099 ‘’Closing Stop’’.
Silver Rolling Contract
No Change: I have said a number of times this year that ‘’Patience’’ is required in order to make sustained points in 2024. I am glad that I have stuck to the long side in Silver, despite been offside on my latest 24.24 average long position for the past month. Thankfully, Silver rallied a further 2% on Friday and is now trading above my entry point at 24.42 this morning. I will leave my T/P level on this position unchanged at 25.10. I will continue to hold this position with no stop. If this view changes, I will be back with a new update for my Platinum Members.
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