Equity Markets sold off on Friday with the NASDAQ 100 leading the decline closing lower by 1.50%. Both the Dollar and Treasury Yields fell as the Geo-Political risk increased ahead of the weekend. Friday was an ugly session as the S&P closed below its 200 Day Moving Average for the first time in many months as the market accelerated lower into the close. Tesla (TSLA) slumped during mid-day trading after the electric vehicle maker missed both its earnings and sales expectations for the quarter. Its earnings fell to 66 cents-per-share, coming in below the estimated 74 cents-per-share. Revenue rose modestly to $23.4 billion, short of the $24.06 billion that was expected. Tesla has endured added pressures from price cuts, high interest rates, global conflicts, and a delay in its highly anticipated Cybertruck. These headwinds have affected the company’s profitability and have forced the electric-vehicle maker into a ‘ruthless’ cost-cutting effort. AT&T (T) raised its full-year free cash flow forecast to $16.5 billion after the company reported gains in mobile subscribers and better-than-expected profit figures. The company’s adjusted earnings were 64 cents-per-share for the third quarter, up from the estimated 62 cents-per-share. However, it continues to face several challenges including an extensive restructuring process and a substantial debt load. Despite the remaining headwinds, the recent earnings data suggests the company is seeing a potential resurgence within the telecom sector. Federal Reserve Chair Jerome Powell said the central bank will proceed with caution as it contemplates further interest rate increases amidst evolving data. He cited strong retail sales, strong employment numbers, and geopolitical tensions as contributing factors. Powell also emphasised that additional evidence of persistently above-trend growth or continued tightness in the labour market could warrant further increases. The Fed Chair reiterated that the committee is closely monitoring the economic situation and is ready to respond accordingly. However, no indication was given as to whether the central bank will raise or pause rates at the upcoming meeting. The number of Americans filing new claims for unemployment benefits fell to 198,000 last week, marking the lowest level since January. However, Continuing Claims, which represents people receiving unemployment benefits, rose to 1.73 million reaching its highest level since July. This suggests that workers losing their jobs are finding it increasingly difficult to find new employment. Demand for workers remained strong, with employers across various sectors adding jobs at a steady pace. Despite the increase in continuing claims, the overall trend for jobless claims depicts a market that continues to perform well and exceed expectations. As a result of six straight months of rising borrowing costs, mortgage applications have dropped to their lowest level in nearly three decades. The Mortgage Bankers Association’s index of applications fell 6.9% last week to its worst reading since May 1995. Additionally, the rate on a five-year adjustable mortgage rose to 6.52%, which is the second highest on record. Tight lending conditions continue to weigh on the U.S. housing market and prevent Americans from financing their homes. European Markets got slammed on Friday. The U.K.’s Office for Budget Responsibility (“OBR”) has said it wrongly assumed the impact of rising energy prices on inflation. The OBR highlighted flaws in its forecasting process which led to it underestimating inflation and overestimating economic activity. Additionally, the fiscal watchdog said it has been overly optimistic since 2010, overshooting trend growth by approximately 0.5 percentage points. The oversight resulted in higher inflation and lower growth which contributed to the U.K. government borrowing $35.1 billion more than the OBR projected for 2022 through 2023. U.K. inflation remained persistent in September as the consumer price index (“CPI”) rose 6.7% year over year. The CPI was expected to cool slightly to 6.6%, but higher fuel and energy prices kept it unchanged from August. However, analysts predict that a drop in household energy bills will drive down inflation in October. As the country’s inflation rate continues to be the highest among the Group of Seven nations, this would be a welcome change. Until conditions improve, the current CPI data supports the Bank of England’s decision to keep interest rates higher for longer. In Asia, China’s housing prices experienced their fastest monthly decline in nearly a year, raising concerns about the effectiveness of Beijing’s efforts to support the property market. Additionally, the value of output from China’s real estate sector contracted 2.7% in the third quarter. The decrease in housing prices comes despite lower mortgage rates and reduced down payment requirements in multiple cities. China’s property market continues to be an overall drag on economic growth. China’s economy expanded by 4.9% in the third quarter, coming in above expectations of 4.4%. While the growth was slower than last quarter’s 6.3%, the positive data suggests that the government’s stimulus efforts are beginning to take effect. Now, the better-than-expected results have refreshed hopes that China will be able to achieve its 5% full-year growth target. Despite the optimistic reports, China will still need to weather a looming property crisis, high youth unemployment, weak private-sector confidence, and a global economic slowdown. Elsewhere, Oil fell 0.79% while Gold surged, closing higher by 1.2%.
To mark my 2875th 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 30 points yesterday and is now ahead by 2471 points for October after closing September with a small gain of 228 points, after finishing August with 1485 points gain following a small gain of 285 points gain in July, after closing June with a gain of 2683 points. May closed with a gain of 3205 points. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made 3164 points in February, 4687 points in January 2054 points in December, 4789 points in November and a record 9619 points last October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1900 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 1.26% lower at a price of 4224.
The Dow Jones Industrial Average closed 286 points lower for a 0.86% loss at a price of 33,127.
The NASDAQ 100 closed 1.50% lower at a price of 14,560.
The Stoxx Europe 600 Index closed 1.36% lower.
Last Friday, the MSCI Asia Pacific closed 0.6% lower.
Last Friday, the Nikkei closed 0.54% lower at a price of 31,259.
Currencies
The Bloomberg Dollar Spot Index closed 0.32% lower.
The Euro closed 0.4% higher at $1.0594.
The British Pound closed 0.2% higher at 121.63.
The Japanese Yen rose 0.1% closing at $149.85.
Bonds
Germany’s 10-year yield closed 2 basis points lower at 2.89%.
Britain’s 10-year yield closed 1 basis points lower at 4.66%.
U.S.10 Year Treasury closed 2 basis points higher at 4.92%.
Commodities
West Texas Intermediate crude closed 0.79% lower at $88.66 a barrel.
Gold closed 1.2% higher at $1949.10 an ounce.
This morning on the Economic Front we have no data of note from either the Euro-Zone or U.K. At 1.30 pm we have the Chicago Fed National Activity Index. Finally, we have Euro-Zone Consumer Confidence at 3.00 pm.
Cash S&P 500
The last three trading sessions have been really ugly for the S&P culminating in the S&P closing below the key 200 Day Moving Average (4233) for the first time in many months. Last week’s aggressive move lower leaves an unprecedented 6 ‘’Open Gaps’’ above, meaning an aggressive rally can start at any time especially given the doom and gloom on twitter. Thursday proved to be a really successful trading session for my S&P calls generating 565 points before unfortunately losing 260 points of these gains by buying the S&P on Friday at 4255. I was stopped out of this position at 4229 and I am now flat. The 4200 is critical support for the S&P. With most of my charts still severely oversold I just cannot be a seller of the market especially as we are only a week away from the seasonally strong November. Today, I will be an aggressive buyer of the S&P from 4200/4220 with a 4185 ‘’Closing Stop’’. If triggered, I will have a T/P level at 4252. With buybacks due to start I certainly have no interest in being short the S&P. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
EUR/USD
I am still flat the Euro. The Euro is trading 50 points higher from where I marked prices last Thursday. I will now raise my Euro buy level top 1.0480/1.0550 with a higher 1.0435 ‘’Closing Stop’’.
September Dollar Index
No Change. The Dollar has resistance from 106.60/107.30. I will now lower my Dollar sell level to this range with the same 107.75 tight ‘’Closing Stop’’.
Cash DAX
With so many of my ‘’Calls’’ hitting on Thursday I emailed my Platinum Members to lower my DAX buy level to 14840. I am still long at this price, and I will add to this position on any further move lower to 14750. I will have a T/P level at 14920 with a now lower 14655 ‘’Closing Stop’’. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash FTSE
Wrong”! The FTSE traded lower to my second buy level at 7510 for a 7545 average long position. Unfortunately, I was stopped out of this position on Friday at 7435 and I am now flat. The FTSE has further support from 7280/7350 where I will again be an aggressive buyer with a lower 7235 ‘’Closing Stop’’. Despite last week’s reversal in the FTSE I still do not want to be short the market at this time.
Dow Rolling Contract
Although the Dow is trading 600 points lower from where I marked prices last Thursday, the Dow has outperformed both the S&P and NASDAQ 100. Last week’s sell-off has me long at an average price of 33325 with a now lower 33055 ‘’Closing Stop’’ as emailed to my Platinum Members. I will now lower my T/P level to 33510. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
Wrong! After the NDX stopped me out of my 14955 average long position on Thursday at 14795, I emailed my Platinum Members to buy the NDX again. As a result of Friday’s 1.50% aggressive fall, I am now long again at an average rate of 14670. I will leave my 14495 ‘’Closing Stop’’ unchanged. I have a T/P level at 14750 on this position. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
No Change., I am still long from last week at an average rate of 128.70 with the same 127.75 ‘’Closing Stop’’. I will now lower my T/P level to 129.10. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold surged last week, trading $150 higher from where we were 10 days ago. This is a massive move on Geo-political risk. I am still flat Gold, and I am going to stay this way as I certainly have no interest in being long the market at these prices. The price action is telling you not to be short. Once the price of Gold settles in a new range I will be back with a new update.
Silver Rolling Contract
No Change. I am still long Silver from five weeks ago at 24.05. In a change of strategy, I will have no stop or no T/P level on this position. This morning Silver is trading higher at 23.30. If this view changes, I will be back with a new update for my Platinum Members.
Recent Comments