U.S. Indices were little changed (SPX -0.1%, NDX unchanged, DJIA -0.3%, RUT -0.1%) with markets now awaiting the outcome of US-China trade talks over the weekend. On the day, both stocks and Treasuries chopped to US President Trump floating the idea of a reduction in the China tariff to 80% from 145% but said it is up to the US Treasury Secretary Bessent. Thereafter, the upside at the US cash open was short-lived, gains pared in equities, and trading largely sideways for the remainder of the day, while Treasuries finished the day flat. Sectors were mixed, downside was led in Healthcare amid press reports suggesting that the White House is likely to announce the adoption of a Most Favored Nation model for Medicare Part B drug pricing. Meanwhile, Energy, Real Estate, and Consumer Discretionary led gains, with the former buoyed by higher crude prices. Similar to stocks, Treasuries were little changed, with trade the main focus in the immediate future. The PBoC said they will suspend Treasury bond buying and selling in phases; will resume buying and selling depending on market supply and demand situations. The session saw multiple remarks from Fed speakers, with the tone echoing Chair Powell’s post-FOMC appearance. FOMC members advocated for a wait-and-see approach to the evolving trade policy, called monetary policy moderately restrictive, and maintained the view of a solid/resilient economy, although Williams (Voter) said he’s hearing from business/others that there is some paring back of discretionary spending. In FX, the Dollar saw broad-based weakness against G10 peers, but the DXY finished the week higher for the third consecutive week amid a reintegration of optimism on US assets. CAD was the G10 outlier in the red amid a mixed jobs report, where the unexpected rise in the unemployment rate offset the larger-than-expected addition of jobs to the economy. As mentioned, crude prices were firmer with WTI finishing the week back above USD 60/barrel, paring some of the recent OPEC+ induced downside. Regarding geopolitics, tensions between India and Pakistan continue to grow, while Reuters reported via citing a source, that the US and EU are to propose a 30-day Ukraine-Russia ceasefire, where if Russia refuses, they’d face new US and EU sanctions. For Monday, price action and headlines are likely to centre around the outcome of the US-China trade talks, where Bessent is to lead the negotiations. Overall, whilst there was a deluge of Fed speakers on Friday that all sang from the same hymn sheet as Chair Powell in wake of the FOMC, noting that monetary policy is in a good place to adjust as conditions unfold, makes sense to maintain it, and continue the ‘wait-and-see’ approach. On the mandate, there was continued repetition that risks are elevated to the upside in both sides of the mandate, and there do not know the full effects of Trump’s tariff policies. As expected, the MPC cut the Base Rate by 25bps to 4.25% on Thursday. However, the decision was subject to more division than anticipated. The decision to cut the Base Rate was 7-2, with Mann and Pill voting to keep rates unchanged; in their view, holding the rate would ensure policy remained sufficiently restrictive to “weigh against stubborn inflationary pressures”. Of the seven who voted to cut, two voted for a 50bps reduction; Dhingra and Taylor. Their justification was there are factors pointing to “potential downward risks to global growth and world export prices” and the risk that over the medium term, a stance that is too restrictive could open up an “unduly large output gap”. The majority of the five who voted for a 25bps cut were mostly of the view that recent developments on trade were enough to push them to a cut. Certain members of the group of five saw a cut as being fairly clear, irrespective of recent updates. The statement reiterated that a “gradual and careful approach to the further withdrawal of monetary policy restraint remains appropriate”; some desks had speculated that this language could be removed. Furthermore, policy “will need to continue to remain restrictive for sufficiently long”. In the accompanying MPR, near-term inflation forecasts were lowered, the 2025 growth view was upgraded while 2026 was downgraded. However, these forecasts pre-dated the upcoming UK-US trade deal announcement. The follow-up press conference provided little in the way of additional insight. In short, a 25bps cut as expected but with much more division on the MPC than expected. The unchanged votes from Pill and Mann provided a hawkish takeaway with pricing for a June cut slipping from around 50% to 20% and a total of 60bps of cuts seen by year-end vs. 72bps pre-release. Elsewhere, Oil closed higher by 1.85% while Gold was flat following another volatile trading session.
To mark my 3175th 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 1035 points on Friday and is now ahead by 2888 points for May 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 0.07% lower at a price of 5659.
The Dow Jones Industrial Average closed 119 points lower for a 0.29% loss at a price of 41,249.
The NASDAQ 100 closed 0.01% lower at a price of 20,061.
The Stoxx Europe 600 Index closed 0.44% higher.
This Morning, the MSCI Asia Pacific closed 0.4% higher.
This Morning, the Nikkei closed 0.45% higher at a price of 36,945.
Currencies
The Bloomberg Dollar Spot Index closed 0.21% lower.
The Euro closed 0.3% lower at $1.1249.
The British Pound closed 0.12% higher at 1.3304.
The Japanese Yen fell 0.9% closing at $145.32.
Bonds
Germany’s 10-year yield closed 7 basis points higher at 2.55%.
Britain’s 10-year yield closed 11 basis points higher at 4.57%.
U.S.10 Year Treasury closed 10 basis points higher at 4.38%.
Commodities
West Texas Intermediate crude closed 1.85% higher at $61.02 a barrel.
Gold closed 0.3% higher at $3324.10 an ounce.
Apart from a speech from Fed Member Kugler at 3.25 pm we have no Economic data of note from either the Euro-Zone or the U.S.
Cash S&P 500
There is a fairly good chance that investors who bought the S&P on Thursday following the announcement of the trade deal between the U.K. and the U.S will regret it in the days ahead. One of favorite market-timing indicators suggests that after a 20% move off the April 7 lows that we are nearing the end of the current rally phase. The PMOBUYALL is a momentum indicator that fluctuates between zero and 100. When it gets to zero, most of the fuel for a large decline has been used up. Traders should look to buy stocks into any additional weakness. When the PMOBUYALL hits 100, most of the fuel for a rally has been used up. Traders should look to sell stocks and/or establish short positions into any additional strength. Like most momentum indicators, PMOBUYALL is not an exact timing indicator. It merely tells us stocks are in the ballpark of a reversal. The PMOBUYALL rallied as high as 100 on seven previous times over the past year. Each time this happened the S&P was near a short-term high. The stock market turned lower each time the MACD turned lower when the PMOBUYALL was in this condition. The PMOBUYALL hit 100 two weeks ago and has been stuck at the 100 level ever since then. Now the MACD indicator is starting to turn lower. If the current situation plays out like the seven previous situations did, then we should see a decline phase get started any day now. My guess is the S&P could drop 200-300 Handles in just a few days to work off the current overbought conditions and push the PMOBUYALL back down towards zero. My S&P plan worked well on Thursday as the market rallied to my 5710-sell level before trading lower to my revised 5688 T/P level and I am now flat. News that positive talks between China and the U.S. over the weekend saw the S&P open 85 Handles higher at 5744. In my opinion this move higher shows how much good news is now priced into the S&P. As a result I have now gone short the market here in small size at 5745. I will add to this position at 5770 with a now higher 5785 ‘Closing Stop’. I would expect some of today’s large gap to be filled later when the Cash Markets open. I will have a T/P level on this position at 5718. The S&P will have short-term support at Wednesday’s post FOMC Statement low at 5577. Therefore, I will continue to be a buyer from 5560/5590 with the same 5545 ‘Closing Stop’. If I am taken long, I will have a T/P level at 5625. If any of these views change, I will be back with a new update for my Platinum Members.
EUR/USD
No Change: Today, I will be a buyer of the Euro on any dip lower to 1.1100/1.1180 with a tight 1.1045 ‘Closing Stop’. Meanwhile, I will continue to be a seller on any further rally to 1.1420/1.1520 with the same 1.1605 ‘Closing Stop’. If I am taken long, I will have a T/P level at 1.1260. If I am taken short, I will have a T/P level at 1.1340.
Dollar Index
I am still flat the Dollar. I will not chase the market higher as I continue to be a buyer on any dip lower to 98.70/99.50 with the same 96.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 100.20.
Russell 2000
I am still flat. I will continue to be a buyer on any dip lower to 1900/1970 while leaving my 1825 ‘Closing Stop’ unchanged. If I am taken long, I will have a T/P level at 2010. Given how much the Russell is underperforming the rest of the American Indexes, I still do not want to be short the market at this time.
FTSE 100
I am still flat. Today, I will continue to be a seller from 8640/8720 with a lower 8795 ‘Closing Stop’. If I am taken short, I will have a T/P level at 8590. I still do not want to be long the FTSE at this time.
Dow Rolling Contract
My Dow plan worked well as the market rallied to my 41680 sell level before trading lower to my revised 41530 T/P level and I am now flat. From a macroeconomic perspective, attention will be heavily focused on inflation indicators this week, including CPI, PPI, and import/export prices. Elevated prices-paid indexes, consistently highlighted in recent regional Fed and ISM PMI reports, have historically served as leading indicators of rising import prices. The current trajectory of these indicators strongly implies a significant uptick in import prices, potentially signaling accelerating inflationary pressures in the coming months and the latter half of the year. The Dow has resistance from 41850/42100 where I will again be a seller with a higher 42305 ‘Closing Stop’.
Cash NASDAQ 100
My NDX plan worked well. On Thursday, the NDX sold off to my 19980 T/P level. Subsequently, I emailed my Platinum Members to sell the NDX again which I did at a price of 20130 before the market sold off on Friday to my 19980 T/P level and I am now flat. The NASDAQ exhibits a featuring a clear rising wedge pattern on the Daily Chart centered around the pivotal 20,000 level, also intersecting with the 61.8% retracement and its 200-day moving average. Technical analysis indicates that a reversal lower is increasingly probable, initially targeting a retracement down toward the 17,900 area. Historically, such rising wedge patterns often result in moves that undercut previous lows, suggesting the potential for a deeper corrective scenario. This morning, the NDX is trading a massive 400 points higher from where we closed on Friday. I have now gone short the NDX here at 20480. I will add to this position at 20680 with a 20805 ‘Closing Stop’. I will have a T/P level on this position at 20340. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
Shortly, after I posted on Thursday, the Bund sold off to my 131.50 T/P level on my latest 1`31.90 short position and I am still flat. The Bund has resistance from 131.40/132.20 where I will again be a seller with a lower 133.05 ‘Closing Stop’.
Gold Rolling Contract
My Gold plan worked well as the market sold off to my 3290-buy level before rallying to my 3322 T/P level and I am now flat. This morning, Gold is trading lower at 3277. We have support below from 3215/3240 where I will again be a buyer with a lower 3197 wider ‘Closing Stop’.
Silver Rolling Contract
Silver rallied to my revised 32.70 T/P level on my latest 32.35 long position and I am still flat. This morning, Silver is trading at 32.60. We have short-term support below from 31.20/32.10 where I will be a strong buyer with a lower 29.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 32.80
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