U.S. Indexes closed with extensive gains on Friday, as the tech-heavy NASDAQ 100 outperformed amid chunky gains in semiconductor names and the broad-based mega-caps. Intel had another positive catalyst, as it and Apple (AAPL) reached a preliminary chip-making agreement. As expected, while sectors were mixed, Tech was the clear gainer, with Utilities residing at the bottom of the breakdown. It was a broadly risk-on trade to end the week, and was helped by a stellar US jobs report, as the headline topped expectations, the Unemployment rate remained unchanged, and wages were cooler than expected. The Dollar was lower, to the benefit of G10 peers, with the Canadian Dollar the clear laggard on a dismal Canadian jobs report. WTI and Brent closed in the green, as participants now await Iran’s response to the US proposal, which is reportedly due to come at some point on Friday. Upside in oil prices was limited after Trump and the US military signalled strikes on Iran yesterday did not mean they sought escalation and that the ceasefire with Iran is still ongoing. Treasuries were firmer across the curve, whilst precious metals gained. Away from the US, both Sterling and Gilts were buoyed by a better-than-feared Labour performance in the local elections. Overall, we saw a strong US jobs report. The US economy added 115k jobs in April, above the 73k forecast but below the elevated 178k in March, which was revised up to 185k. Job gains were seen in healthcare, transportation and warehousing, and retail trade. Federal government employment continued to decline. The Unemployment rate was unchanged at 4.3%, in line with expectations. The participation rate dipped slightly to 61.8% from 61.9%, while the U-6 unemployment rate rose to 8.2% from 8%. On wages, earnings rose 0.2%, below the 0.3% forecast, maintaining the prior pace from March. The Y/Y rate, however, accelerated to 3.6% from 3.5%. For the Fed, the report allows the central bank to keep its focus on the inflation side of the mandate, particularly with ongoing upside risks around the US/Iran conflict. Looking ahead, however, many are aware of downside risks to employment, particularly if the war drags on and costs for businesses rise further. Pantheon Macroeconomics write that “Aprilʼs data bolster the case for thinking the labor market is convalescing. But the continued weakness of surveys of hiring intentions and the developing pressure on firmsʼ costs from the surge in energy prices suggests it is too soon to sound the all-clear.” The headline University of Michigan Consumer Sentiment Survey fell to 48.2 from 49.8 in the preliminary May report, below the expected 49.5. The decline was led by a drop in current conditions to 47.8 from 52.5, while forward-looking expectations edged up to 48.5 from 48.1. The drop in current conditions reflected concerns about high prices, both for personal finances and buying conditions for major purchases. The report also found that real income expectations continued a decline that began in March. It noted that one-third of consumers spontaneously mentioned gasoline prices, while about 30% mentioned tariffs. “Taken together, consumers continue to feel buffeted by cost pressures, led by soaring prices at the pump. Middle East developments are unlikely to meaningfully boost sentiment until supply disruptions have been fully resolved and energy prices fall.” On inflation expectations, year-ahead forecasts softened to 4.5% from 4.7%, while 5-year expectations declined to 3.4% from 3.5%. Elsewhere, Oil closed 0.64% higher while Gold was flat following a quiet trading session.
To mark my 3375th 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 lost 435 points on Friday and is now down 303 points for May 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 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 0.84% higher at a price of 7398.
The Dow Jones Industrial Average closed 12 points higher for a 0.02% gain at a price of 49,609.
The NASDAQ 100 closed 2.35% higher at a price of 29,234.
The Stoxx Europe 600 Index closed 0.69% lower.
This Morning, the MSCI Asia Pacific closed 0.3% higher.
This Morning, the Nikkei closed 0.42% lower at a price of 62,451.
Currencies
The Bloomberg Dollar Spot Index closed 0.23% lower.
The Euro closed 0.31% higher at $1.1785.
The British Pound closed 0.41% higher at $1.3630.
The Japanese Yen fell 0.15% closing at $156.67.
Bonds
U.K.’s 10-Year Gilt closed 4 basis points lower at 4.91%.
Germany’s 10-Year Bund Yield closed 1 basis points lower at 3.00%
U.S.10 Year Treasury closed 1 basis points lower at 4.36%.
Commodities
West Texas Intermediate crude closed 6.9% lower at $95.21 a barrel.
Gold closed 2.82% higher at $4685.10 an ounce.
This morning on the Economic Front we have no data of note from either the U.K. or the Euro-Zone. At 3.00 pm we have U.S. Existing Home Sales. Finally, we have a Three-Year Treasury Auction at 6.00 pm.
Cash S&P 500
I started writing tradernoble back in February 2013. To me the last six weeks have been the most challenging markets that I have ever encountered since I started working on a bank trading desk back in 1986. Both the S&P and NDX continue to make one new high after another led by Tech stocks associated with AI. The incoming Fed Chair is about to inherit a mess. Kevin Warsh’s confirmation is all but assured, but the job that awaits him is anything but simple. He will face political pressure from the White House for rapid rate cuts, a deeply divided FOMC with Powell lingering as a Governor, and an economy where the K-shaped divergence between Wall Street and Main Street has never been wider. Meanwhile, the consumer is cracking in plain sight. Disney reported a rare decline in theme park attendance — a real-time bellwether for consumer confidence — even as gasoline prices have climbed +53% since the war began. The stock market does not seem to care: the Philadelphia Semiconductor Index just posted its largest 25-day rally since the dot-com bubble peak in March 2000. The question remains: how long can a market carried by AI capex and chips mania ignore an economy where 72% of GDP is contracting? Besides the weather and the AI spending binge, the primary source of stimulus for the U.S. economy over the past year has been the sharp decline in the personal savings rate from over 5.0% to 3.6%. Barring that effect, real consumer spending would be running flat right now instead of +2% on a YoY basis. The reasons? The equity bull market rally, which has made the high-end feel richer and more willing to spend more out of their after-tax income; and for the low-end, the ability to continue to tap their credit cards to stay intact, even though the delinquency rate on this form of household debt has soared to a fifteen-year high of 12.7% from 11.4% a year ago and 9.7% two years back. It really says a whole lot about the fragility beneath the surface when credit card default rates are higher today than they were in the third quarter of 2008 (9.5%) when Lehman collapsed, and the Great Financial Crisis entered a new and sinister chapter. Despite all of the above the S&P managed to close at a new all-time high on Friday at a price of 7398. The S&P has now rallied a staggering 1050 Handles in a straight line since March 30th. I have never seen such an overvalued and overstretched market before. This move higher sees the S&P add a staggering $10 trillion of Market Cap in just 29 days. Normally the 20 Day Moving Average is within touching distance of current prices but not today where this key pivot point comes in over 250 Handles lower at 7142 while the 50 Day MA is down at 6863. With Market Cap to GDP close to 260% these numbers just do not add up in my opinion. As Keyes famously said ‘’Markets can remain illogical longer than I remain solvent’’ could not be more apt given my current short position. Tomorrow we are going to get April CPI. This is going to be a fairly important CPI report, only because of how inflation expectations have been coming together over the last two months — with the war and how oil prices have been impacting things. If you look at real rates and inflation expectations versus nominal rates right now, it appears the market is pricing in a much more dovish Fed — one that is not going to be responding to higher inflation rates. That could even be one of the reasons we have seen equity markets rebound so sharply. The market is trying to get ahead of what will be another inflation cycle with the Fed potentially not doing anything. Things started getting a bit ridiculous toward the end of last week. Say what you want, but the concentration in daily activity in the S&P 500 is increasingly centered around semiconductors. In fact, based on my internal estimates, Micron was the single largest contributor to the Index move on Friday, followed by NVDA, AAPL, AVGO, AMD, INTC, TSLA, SNDK, AMAT, and QCOM. When you dig a bit deeper, the options volumes going through stocks like Micron seem, frankly, pretty insane. Micron appears to be in the middle of a massive gamma squeeze, with implied volatility steadily rising, call volumes off the charts, and the stock price surging. The good news, at least potentially, is that this week is options expiration, which may give the market a chance to flush out some of the excess. Technically, the stock looks beyond stretched, trading above its upper Bollinger Band, with an RSI of 84, and — get this — trading 157% above its 200-day moving average. Even in March 2000, Micron traded “only” 78% above its 200-day moving average. The SOX Index is also trading above its upper Bollinger Band, has an RSI above 80, and is trading nearly 60% above its 200-day moving average. The only other times the Index traded this far above its 200-day moving average were in July 1995 and March 2000. Neither ended particularly well. At this point, it seems clear to me, from both a technical and an options-market perspective, that there is a good chance these moves have not only become overextended but have entered the land of the absurd. Like Oracle rising 35% in a single day absurd. It is not as if the stock is even cheap, trading at nearly 5.5 times next-twelve-month sales estimates. The S&P has an ‘Open Gap’ from last week from 7257/7294. I will use any tag of the gap to close my 7097 average short position and reassess if triggered. With the 14 Day RSI closing at an overbought 75 on Friday we should have at least a small retracement over the coming days. If this view changes I will be back with a new update for my Platinum Members.
EUR/USD
I am still flat. I still believe that the Euro is overvalued. The Euro has short-term resistance from 1.1840/1.1920. I will now raise my sell level to this area with a higher 1.2005 ‘Closing Stop’. Meanwhile, I will continue to be a buyer on any further dip lower to 1.1580/1.1660 while leaving my 1.1495 ‘Closing Stop’ unchanged. If I am taken short, I will have a T/P level at 1.1770. If I am taken long, I will have a T/P level at 1.1730.
Dollar Index
The Dollar has barely moved during the past two weeks unlike the equity and bond markets which is incredible considering that Japan’s Ministry of Finance spent an estimated $34.5 billion buying yen on April 30 after the currency breached 160 against the Dollar. It was the first intervention since July 2024. This is the central tension of Prime Minister Takaichi’s economic agenda. She wants cheap government borrowing to fund a defense and industrial buildup, a stable yen to protect household purchasing power, and growth. She cannot have all three. The tension is institutional as well as economic: Takaichi needs the Bank of Japan to keep Interest Rates low enough to fund her ambitions but the BOJ has been inching towards normalization and the Finance Ministry worries more about the yen weakening than Takaichi’s agenda progressing. I am still long from 10 days ago at a price of 98.30. I will add to this position at 97.50 while leaving my 96.95 ‘Closing Stop’ unchanged. I will leave my T/P level unchanged at 98.75. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
My average short 2870 Russell position worked well as the market sold off to my 2830 T/P level and I am now flat. The Russell has short-term resistance from 2890/2960 where I will again be a seller with a higher 3015 ‘Closing Stop’. If I am taken short, I will have a T/P level at 2840. Given how overbought the Russell is trading I still do not want to be long the market at this time.
FTSE 100
The FTSE traded the whole of Thursday’s buy range for a now 10260 average long position. I will leave my 10145 ‘Closing Stop’ unchanged while lowering my T/P level to 10320. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
Overnight the Dow finally hit my buy range for a 49380 long position. To reduce my NDX losses I have now exited this position here at 49520 and I am now flat. The Dow’s underperformance versus the other three American Indexes is a warning sign for lower prices. The big question is as usual the ‘’WHEN AND FROM WHERE. Internally the market is weak as shown by the McClelland Oscillator which closed at just +14 on Friday. This should not happen with markets making new highs daily. Today, I will again be a buyer of the Dow on any further dip lower to 49000/49300 while leaving my 48795 ‘Closing Stop’ unchanged. If I am taken long, I will have a T/P level at 49650.
Cash NASDAQ 100
Wrong! The vertical move higher in the NDX shows no sign of ending anytime soon. Despite the NDX trading way outside the top of its Bollinger Band and an RSI print of 85 the NDX closed a further 2% higher on Friday. I cannot remember the last time that the RSI was this high. I believe more near-term consolidation is necessary and a pullback of 1000/1500 points would be a solid opportunity to scale back into a bullish position. Friday’s move higher stopped me out of my latest 28390 average short position at 29005 and I am now flat. Today, I will again be a seller from 29270/29470 with a higher 29705 ‘Closing Stop’. If triggered, I will have no T/P level and if this view changes I will be back with a new update for my Platinum Members.
December BUND
The Bund never came close to Thursday’s sell range and I am still flat. The Bund has short-term support below from 124.50/125.30 where I will be a small buyer with a 123.85 ‘Closing Stop’. The Bund has short-term resistance from 126.50/127.30. I will now lower my sell level to this area while leaving my 128.15 ‘Closing Stop’ unchanged. If I am taken long, I will have a T/P level at 125.95. If I am taken short, I will have a T/P level at 125.90.
Gold Rolling Contract
I am still flat. Today, I will lower my Gold buy level to 4450/4550 with a lower 4325 ‘Closing Stop’. If I am taken long, I will have a T/P level at 4680. If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
Silver has rallied over 10% last week and I am still flat. Today, I will raise my buy level to 71.50/74.50 with a higher 68.15 ‘Closing Stop’. If I am taken long, I will have a T/P level at 76.75.
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