U.S. Indices closed lower on Friday, paring some of the strength seen last week post-Fed. Pressure was largely observed since the opening bell, with the Nasdaq underperforming as Broadcom’s (AVGO, -11.4%) Q4 earnings showed its AI order backlog fell short of expectations, adding to the AI concerns seen post Oracle (ORCL, -4.6%) earnings. Oracle shares were trading lower since the bell and extended after reports that data centres for OpenAI are reportedly delayed to 2028 from 2027, largely due to labour and material shortages. Later, Oracle denied the reports, with shares paring some of the downside seen from the initial report. Sectors were primarily lower, with Tech slumping 3%, while energy and communication also lagged – but to a lesser extent. Consumer Staples outperformed, rising 0.8% but Health Care and Materials were flat – but still relative outperformers. Elsewhere, in FX, price action was muted with slight underperformance in the Japanese Yen and Australian Dollar, while the U.S. Dollar was flat. T-notes saw further steepening, but with the long-end sold and front-end unchanged, as attention turns to NFP and CPI this week. Gold added to recent gains, rising above USD 4,300/oz, but currently trades around that level. Silver, meanwhile, gave back some of its recent gains but remains above USD 61/oz. There were several Fed speakers on Friday (see below) but also updates regarding the next Fed Chair. The Wall Street Jornal in an interview with President Trump, found that Trump is leaning towards former Fed Governor Warsh or NEC Director Hassett as the next Fed Chair. This saw Kalshi prediction markets pare the likelihood of Hassett as next Fed chair, while Warsh increased, but Hassett still remains the favourite. Goolsbee the Chicago Fed President explained his dissent on Friday but note Goolsbee does not vote again until 2027. He dissented from the recent rate cut decision, arguing that the Fed should have waited for more information—particularly on inflation—before easing policy. However, he said he was optimistic that rates can come down significantly over the next year but expressed concern about cutting too early given the inflationary environment of recent years. Nonetheless, he did state later that his 2026 dot is below the Fed median for one rate cut, implying he sees two or more cuts next year. Regarding his decision, Goolsbee noted that most data indicate stable economic growth, with the labour market only moderately cooling. He emphasised that waiting would have been a more prudent course with little additional risk, while offering the benefit of incorporating updated economic data into decision-making. On inflation, he warned that while the recent rise may be tied to tariffs and could prove transitory, the risk is that it becomes more persistent. He pointed out that inflation has been above target for four and a half years, with progress having stalled and both consumers and businesses citing prices as a key concern. Regarding the labour market, Goolsbee saw little evidence of deterioration significant enough to justify immediate rate cuts and said the Fed could have comfortably waited until early 2026 to act. Schmid the Kansas City Fed President explained why he voted to hold again on Wednesday. He argued that not enough had changed to justify a policy shift. He noted that while the data is still incomplete, inflation remains too high, and the job market appears largely in balance. Schmid emphasised that he continues to hear inflation concerns from constituents in his district and believes monetary policy is currently only modestly—if at all—restrictive. He warned against complacency, stressing that one of the Fed’s key achievements has been building credibility on inflation, and that this should be carefully protected. He described the US economy as showing strong momentum but reiterated that inflation remains too hot, reinforcing his view that policy should stay modestly restrictive for the time being. Fed Governor Hammack recounted the Fed meeting last week as complicated, noting that balancing the mandate is challenging with the labour market gradually cooling but with inflation above target. Hammack argues the economy will get a boost from fiscal stimulus and is watching to see if price increases come from the delayed tariff impact and if jobs stabilise. Similar to Chair Powell, she noted that no government data has created a “bit of fog for the Fed” and makes reading inflation harder. Hammack describes policy right now as around neutral and would prefer for Fed policy to be a little more restrictive than the current level. Will be watching carefully to see if inflation moderates and jobs stabilise. Lastly, Hammack said private credit does not currently pose significant systemic risk due to its limited size; she would like more visibility into private credit. Finally, Paulson the Philadelphia Fed President said Fed rate cuts have taken out some insurance against job market risks and is more concerned about job risks relative to inflation. Paulson described current policy as “somewhat restrictive”, suggesting her view on the neutral range differs from Chair Powell, who suggested rates are in a plausible range of neutral, but to the high end of that range. Paulson argued that most of 2025’s high inflation is driven by trade tariffs but says she’s not seeing tariffs translate into widespread price increases. Further, she sees a decent chance inflation will moderate into next year, but still calls inflation too high, while the job market is bending, but not breaking. The 2026 voter described economic data as stale but argued that if there was a big change in conditions, they would expect to hear from contacts. Paulson acknowledged that the Fed will have much more info in hand at the January FOMC meeting. Elsewhere, Oil closed lower by 0.28% while following a volatile trading session Gold finally ended Friday with a 1% gain.
To mark my 3300th 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 155 points on Friday and is now ahead by 1632 points for December 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
Recent Comments