U.S. Indexes closed higher on Friday led by the S&P 500 hitting fresh record highs while the majority of sectors were green. Upside was led in Tech with the heavy cap stocks outperforming, leading to the NASDAQ 100 outperforming, while the Russell 2000 pared from its prior day rally. Several Fed speakers spoke on Friday. Dissenting Governor Miran confirmed he was the bottom dot in the 2025 dot plot; he does not think 50bps would spook markets, and he is going to try to persuade others on the FOMC to share his dovish views. Kashkari pencilled in two more rate cuts this year, while Daly acknowledged labour market softness. T-notes sold off, adding to the losses this week, with T-notes now a whole point lower from the post-FOMC statement peak. On trade, US President Trump and Chinese President Xi spoke on Friday. China said talks were positive and constructive, and Trump said progress was made on fentanyl, adding he will visit China early next year, and Xi would visit the US at an appropriate time. Meanwhile, the EU announced the 19th sanctions package on Russia (as expected), banning imports of Russian LNG into European markets and sanctioning 118 additional vessels from the shadow fleet. Rosneft and Gazpromneft are also on a full transaction ban. Russia also flew over Estonian airspace, and Estonia is calling on NATO to invoke Article 4. Oil prices were little phased and settled lower. In FX, the Dollar Index was strong but both the Canadian Dollar and Japanese Yen outperformed, with JPY buoyed against other currencies after a hawkish Bank of Japan (unchanged as expected, two voted for a hike, announced sale of J-REIT and ETF holdings, Governor Ueda also signalled that they do not have to wait for the impact of US tariffs to hike). However, the broad US Dollar strength saw USD/JPY flat. Gold prices also continued to push to fresh record highs, while Silver also rallied. Sterling lagged after larger-than-expected borrowing figures resulted in Chancellor Reeves facing further pressure ahead of the Autumn budget in November. Note, Bloomberg reported that Oracle (ORCL) is in talks with Meta (META) on a USD 20 bilion AI cloud computing deal. FedEx (FDX) was bid after strong earnings, while Trump is to sign an EO that would charge companies a USD 100,000 fee for H-1B visas, hitting Infosys (INFY), Accenture (ACN) and Cognizant (CTSH). Fed Member Miran when asked why he dissented, said in his own view, he does not see material inflation from tariffs. On the dot plots, Miran confirmed he was the bottom dot in 2025, which he pencilled in at a rate of 2.75-3.00%. For the meeting on Wednesday, Miran said he was the only support for a 50bps at the meeting and hopes to persuade others on the Fed to support aggressive rate cuts, and will attempt to do that over the coming weeks and months. Further on policy, the new Governor noted that being so far above neutral means policy is very restrictive, and the longer the Fed stays restrictive, the greater the risks to the job market; his 2026 Dot Plot is not so far from others, does not think a 50bps cut would worry markets, and stated it is a measured pace. Regarding inflation, the dissenter noted he is clearly in the minority in not being concerned about inflation from tariffs, and he added that the removal of migrants will have a disinflationary impact. As expected, Miran was asked about Fed independence and said it is silly to say he is doing the bidding of the White House, and he would resign immediately if he were asked by US President Trump to stay beyond January. While we have yet to get a text release from Miran on why he dissented in favour of a 50bps, as is the Fed norm and usually on the first Friday post-rate decision, Miran said he will give a full, detailed review of his views on Monday. Meanwhile, Fed Member Kashkari supported the 25bps rate cut this week, and noted the risk of a sharp increase in unemployment warrants some Fed action. On data, Kashkari said it is hard to see inflation climbing much higher than 3% from tariffs, and if the labour market proves resilient or inflation rises, it should pause and hold policy rate but can always cut rates more quickly if the labour market weakens more than expected. Ahead, the Minneapolis Fed President sees two more quarter-point rate cuts this year as appropriate and adds the neutral rate has likely risen to 3.1% (Fed median projection is 3.0%). Fed Chair Candidate Bullard said that 75bps of cuts by year-end would be significant, noting the Fed decision was good and it looks like a sequence of three cuts to year-end. He believes the Fed is in a pretty good position at the moment and said he does not think he would have voted for a 50bps rate cut at the September confab. Bullard estimates the neutral rate at 3.25% (above the Fed’s median view of 3.0%). He added that inflation remains above target, but he would not abandon the Fed’s inflation goal. On the Fed framework, he suggested that the dot plot has its problems and thinks the Fed can do better than it has on the dot plot. Regarding the balance sheet, Bullard said current policy is appropriate, while on the balance sheet said Mortgage Backed Securities will take a long time to go off the balance sheet, noting how the Fed added too much MBS to the balance sheet from COVID. Elsewhere, Oil closed lower by 1.2% on Friday while Gold ended session with a gain of 0.3%.
To mark my 3250th 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 748 points on Friday and is now ahead by 2390 points for September after 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 0.49% higher at a price of 6664.
The Dow Jones Industrial Average closed 172 points higher for a 0.37% gain at a price of 46,315.
The NASDAQ 100 closed 0.70% higher at a price of 24,626.
The Stoxx Europe 600 Index closed 0.16% lower.
This Morning, the MSCI Asia Pacific closed 0.3% higher.
This morning, the Nikkei closed 1.01% higher at a price of 45,502.
Currencies
The Bloomberg Dollar Spot Index closed 0.31% higher.
The Euro closed 0.35% lower at $1.1750.
The British Pound closed 0.71% lower at $1.3472.
The Japanese Yen fell 0.51% closing at $147.95
Bonds
U.K.’s 10-Year Gilt closed 6 basis points higher at 4.72%.
Germany’s 10-Year Bund Yield closed 5 basis points higher at 2.75%
U.S.10 Year Treasury closed 4 basis points higher at 4.13%.
Commodities
West Texas Intermediate crude closed 1.21% lower at $62.80 a barrel.
Gold closed 0.62% higher at $3685.10 an ounce.
This morning on the Economic Front we have Euro-Zone Consumer Confidence at 10.00 am followed by a speech from Fed Member Barkin at 5.00 pm. Finally, Bank of England Governor is due to speak at 7.00 pm.
Cash S&P 500
Compared to last week, this one should be much slower. There are no central bank meetings and no major economic releases. The only notable event will be Micron’s earnings. Treasury will auction 2-year, 5-year, and 7-year notes on Tuesday, Wednesday, and Thursday, but settlements for these auctions won’t occur until next week. For the most part, this week will be about digesting last week’s leftovers from the Fed, BoE, BoJ, and options expirations. The Bank of Japan left rates unchanged on Friday, as expected. What was not expected was that two members dissented, favoring a rate hike. As a result, the odds of an October hike have climbed to nearly 50%, up from virtually zero before the meeting while, Japan’s 2-year yield jumped 3 bps to its highest level in decades. The breakout from a bullish ascending triangle pattern suggests it could move significantly higher, with a target above 1.1% looking reasonable. Meanwhile, the 5-year JGB also broke out of its ascending triangle, and a simple extension points to a move toward 1.4% or higher. So far, the impact on USDJPY has been limited, which is puzzling given the collapse in Treasury–JGB spreads. One explanation may be that the FX market does not expect U.S. rates to fall and instead anticipates the spreads correcting through higher U.S. yields. In the meantime, 63-day realised volatility for the S&P 500 fell to 8.86 on Friday, below the levels seen in July 2024. The last time it was lower was in January 2020, October 2018, December 2017, and July 2014. Each of those periods was followed by a surge in market volatility, and given how overbought the market is now, it would not be surprising to see history repeat. The idea that rate cuts automatically fuel the market higher is not entirely correct when viewed over time. Raising rates in 2023 did not stop stocks from rallying, even though theory suggested they should fall. Historically, the outcome has been more of a 50/50, data-dependent story. In the 1970s, rate cuts often lifted equities, but that has not consistently been the case from the 1990s onward. Selling rallies over the past two trading sessions has worked well but as usual you have to be quick to take any gain. On Thursday the S&P hit my second sell level at 6652 for a 6642 average short position before selling off to my revised 6615 T/P level. Subsequently, I emailed my Platinum Members to go short the S&P again at a price of 6643 before selling off on Friday morning to my 6628 T/P level. Just before Friday’s close I went short the S&P at 6660. I am still short with a now 6644 T/P level. I will add to this position at 6680 while having a ‘Closing Stop’ at 6701 for now. The 14-Day RSI closed at 73 on Friday while the S&P is now trading outside the top of its Daily Bollinger Band for five consecutive trading sessions. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
EUR/USD
The Euro traded lower to my 1.1750 T/P level on my latest 1.1810 average short position and I am now flat. There is every chance that last week’s 1.1920 year-to-date high will hold for the foreseeable future given the near 200-ponint subsequent fall off that high. Today, I will again be a seller from 1.1820/1.1900 with a 1.1965 ‘Closing Stop’. If I am taken short, I will have a T/P level at 1.1740.
Dollar Index
My latest 97.35 average long Dollar position worked well as the market rallied to my 97.80 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 96.60/97.30 with a lower 95.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 97.90.
Russell 2000
The Russell rallied to my second sell level at 2475 for a now 2450 average short position. I will leave my 2505 tight ‘Closing Stop’ unchanged while raising my T/P level to 2420. 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. As I am now short three of the American Indexes, I will raise my FTSE sell range to 9260/9340 with a higher 9405 ‘Closing Stop’. If I am taken short, I will have a T/P level at 9220. I no longer want to be long the FTSE at this time. If this view changes, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
My Dow plan worked well. The Dow rallied to my 46360-sell level before trading lower to my revised 46142 T/P level and I am now flat. The Dow has further resistance from 46500/46750 where I will again be a seller with a higher 47005’Closing Stop’. If I am taken short, I will have a T/P level at 46280. I still have no interest in buying the Dow at this time.
Cash NASDAQ 100
The NDX has been the strongest of the American Indexes which is no surprise given the 25% rally for Intel Shares. This move higher saw the whole of my sell range triggered for a now 24520 average short position. I will now raise my ‘Closing Stop’ to a price of 24765. Meanwhile, I will raise my T/P level to 24380. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
Late Friday the Bund finally traded lower to my 129.00 buy level. I am still long with a now lower 129.60 T/P level. I will add to this position at 128.30 while leaving my 127.85 ‘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. Today, I will continue to be a small seller of Gold on any further rally to 3710/3730 with a higher 3751 ‘Closing Stop’. If I am taken short, I will have a T/P level at 3684.
Silver Rolling Contract
As I did not like the price action in Silver especially given the vertical rally over the past few months I covered my 41.80 long position at 41.85 and I am now flat. This was the wrong option by me with Silver trading 2% higher at 43.65 this morning. Today, I am going to stay flat the Silver market as I want to see the price action now that we are at new year-to-date highs. If this view changes, I will be back with a new update for my Platinum Members.
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