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
Equities
The S&P 500 closed 1.07% lower at a price of 6827.
The Dow Jones Industrial Average closed 245 points lower for a 0.45% loss at a price of 48,458.
The NASDAQ 100 closed 1.91% lower at a price of 25,196.
The Stoxx Europe 600 Index closed 0.53% lower.
This morning, the MSCI Asia Pacific closed 0.4% higher.
This morning, the Nikkei closed 1.31% lower at a price of 50,168.
Currencies
The Bloomberg Dollar Spot Index closed 0.05% higher.
The Euro closed 0.11% higher at $1.1740.
The British Pound closed 0.10% lower at $1.3370.
The Japanese Yen rose 0.09% closing at $155.83
Bonds
U.K.’s 10-Year Gilt closed 2 basis points higher at 4.51%.
Germany’s 10-Year Bund Yield closed 1 basis points higher at 2.86%
U.S.10 Year Treasury closed 4 basis points higher at 4.19%.
Commodities
West Texas Intermediate crude closed 0.28% lower at $57.44 a barrel.
Gold closed 1.1% higher at $4299.10 an ounce.
This morning on the Economic Front we already had the release of the German Wholesale Price Index which rose 0.3% versus +0.2% expected. Next, we have Euro-Zone Industrial Production at 10.00 am and the U.S. New York State Manufacturing Index at 1.30 pm. Finally we have a speech from Fed Member Williams at 3.30 pm.
Cash S&P 500
Given the dovish news from the Fed on Wednesday coupled with their $40 billion per month buying of T-Bills (QE) there is every chance that the S&P makes a new high into January. However, in my opinion caution is warranted. There are a number of keys data to watch over the next couple of weeks. As you know the VIX has been declining sharply since the November 21 high. The Slow Stochastics are on a downside crossover which has coincided with other declines in the VIX over the past 12 months. The VIX has huge support at 14.20. The VIX is severely oversold and if we can bounce off the 14.20 level then a major decline in the S&P should ensue. It is important to point out that in December 2024 the VIX actually fell below the pivotal 14 level for a few days, hitting a low at 12.70 before rallying hard. Last week, the latest NAAIM (National Association of Active Investment Managers) data was released, which showed active managers have once again increased their exposure to nearly 100% allocated to U.S. Equities (98.7%). This is rare. Remember fully invested means no money left to buy. This is a big negative as it means there is no support in case of a market decline. History tells us that when the NAAIM is so extreme it does not end well for the S&P, leading to at least a 20% correction. Meanwhile, the AAII Investor Sentiment shows that only 30% of individual investors surveyed are bearish, which is the lowest level since January 23 reading 04 29.4%. As you know the market quickly made an interim high on Feb 19 before leading to a 26.5% plunge in the NDX until the April 4 low. In my opinion it is time to be super cautious especially if long the market with leverage. The year-end volatility should increase and will not be for the faint hearted. The coming market plunge, probably in early 2026, will be led by Bitcoin and those firms that use leverage for their Bitcoin positions. The resulting margin calls will force big selling of everything else, good or bad just to raise cash. This will offer major opportunities for us during strong market declines. The vastly overvalued stocks, many of them in AI and related sectors, will probably be demolished. The future prospects for these firms are already reflected in the price of stocks, many times over. Now comes the readjustment to ‘’Fair Value’’. My latest 6894 average short position worked well as the S&P hit a low at 6802 on Friday before having a small bounce into the close. This move lower saw my revised 6878 T/P level triggered and I am now flat. Today, I will continue to be a buyer on any further dip lower to 6760/6780 with the same 6739 ‘Closing Stop’. The S&P has short-term resistance from 6870/6890 where I will again be a seller with a 6921 wider ‘Closing Stop’. If I am taken long, I will have a T/P level at 6806. If I am taken short, I will have a T/P level at 6848.
EUR/USD
I am still short the Euro from last Wednesday at 1.1700 with the same 1.1835 ‘Closing Stop’. I will continue to look to add to this position at 1.1770 while raising my T/P level to 1.1650. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
On Friday the Dollar traded lower to my second buy level at 98.40 for a now 98.80 average long position. I will leave my 97.95 ‘’Closing Stop’’ unchanged while lowering my T/P level to 99.30. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
I am still short the Russell at an average rate of 2535. I will leave my 2605 ‘Closing Stop’ unchanged while raising my T/P level to 2500. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
FTSE 100
I am still flat. The FTSE continues to trade heavy albeit in extremely narrow ranges. Today, I will continue to be a buyer on any dip lower to 9500/9570 with the same 9430 ‘Closing Stop’. If I am taken long, I will have a T/P level at 9630. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
Wrong! On Thursday the Dow surged, closing at a new all-time high. This move higher saw the whole of my sell range triggered for a 48380 average short position before stopping me out of this trade at 48705 and I am now flat. Subsequently the Dow got hit hard on Friday which is frustrating. There is no doubt that the Dow has been one of the most difficult markets to get an edge in over the past few months. I do not have a firm view in the Dow and for this reason I am going to stay flat to see how the market behaves over the coming days. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
My NDX plan worked well as the market rallied to my 25780-sell level before selling off to my revised 25645 T/P level. Subsequently, the NDX got slammed on Friday. After the market hit my 25290-buy level I immediately emailed my Platinum Members to exit any long position at 25345 and I am now flat. This morning the NDX is trading at a price of 25180. We have strong support from 24780/24980 where I will again be a buyer with a lower 24595 wider ‘Closing Stop’. If I am taken long, I will have a T/P level at 25160 If this view changes I will be back with a new update for my Platinum Members.
December BUND
I am still long the Bund at 127.30 with the same 127.90 T/P level. I will add to this trade at 126.60 while leaving my 125.95 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
I am still flat. I have no interest in chasing the price of Gold higher. Neither do I want to be short. As a result I will wait for a sell-off to initiate a new long position. If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
Silver recorded one if its largest Downside Key Day reversals in points terms in many months on Friday. Having hit a high at 64.60, Silver fell almost 400 points in a straight line. On Thursday Silver hit my 63.50 level. Friday’s sell-off saw my revised 62.20 T/P level triggered and I am now flat. Today, I will again be a seller of Silver from 63.80/65.30 with the same 65.75 ‘Closing Stop’. If I am taken short, I will have a T/P level at 62.50.
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