U.S. Equity Markets surged to new all-time-highs on Friday, sustaining through the session, with AI-affiliated names leading the charge with particular strength in Dell (DELL) after its earnings report. Although, Regional Banks were a weak spot after NYCB’s (NYCB) (-26%) latest woes. At the same time, Fed rate cut pricing across 2024 ramped up by 10bps to 92bps after the ISM Manufacturing Survey saw a surprise fall, including the prices paid component. Treasury yields closed the week at their lows after the data, which was accentuated by soft construction spending and downward revisions to the University of Michigan’s Sentiment Survey. Note also comments from Fed’s Waller who said he would like to shift the Fed’s Treasury holdings to shorter maturities. In FX, the Dollar slid lower after the data but the Japanese Yen still underperformed in the wake of the dovish comments from BoJ Governor Ueda. The Euro was stronger after Euro-Zone core CPI fell less than expected ahead of this Thursday’s ECB Meeting. Oil prices rallied, breaking out to multi-month highs ahead of this week’s OPEC gathering. The softer Dollar and the lower yield environment saw spot gold rip to YTD peaks at USD 2,088/oz ahead of the December ’23 peak of USD 2,135/oz. Dallas Fed’s Logan (non-voter) and Fed Governor Waller (voter), speaking at the same event, both gave some expansive comments on QT and the balance sheet as the Fed approaches a decision on reducing the pace of the balance sheet roll off. While Logan’s comments echoed her prior remarks on the issue, Waller’s comments were perhaps the most interesting after he suggested that he would like to see the Fed’s Treasury holdings shift to a larger share of shorter-dated securities, where moving to more T-Bills would shift the maturity structure closer to the policy rate; highlighted that T-Bills today make up less than 3% of the Fed’s security holdings vs approximately a third seen pre-GFC. Waller also clarified that the Fed’s balance sheet plans “do not imply anything about the stance of interest rate policy”. The ISM Manufacturing PMI for February unexpectedly fell to 47.8 from 49.1, against the forecasted rise to 49.5. Prices paid remain in expansionary territory but encouragingly dipped to 52.5 (prev. 52.9, exp. 53.0), while new orders fell into contractionary territory to 49.2 from 52.5. Employment and production declined to 45.9 (prev. 47.1) and 48.4 (prev. 50.4), respectively. Supplier delivery times lengthened slightly while the backlog of new orders remained low. Nonetheless, despite the soft report the commentary within was more upbeat, and highlighting this the share of sector GDP registering a composite PMI calculation at or below 45 percent, a good barometer of overall manufacturing weakness, was 1% in Feb. vs. 27% in Jan. and 48% in Dec. Further still, among the top six industries by contribution to manufacturing GDP in February, none had a PMI at or below 45 percent, compared to two in the previous month. Overall, the past relationship between the Manufacturing PMI and the overall economy indicates that the February reading corresponds to a change of +1.5% in real GDP on an annualised basis. In wake of ISM, and construction spending, Atlanta FedGDP Now Q1 tracker was cut to 2.1% from 3.0%. Finally, the University of Michigan final headline for February was revised much lower to 76.9 from expectations of an unchanged print of 79.6. Current conditions and forward-looking expectations were revised down to 79.4 (prev. 81.5) and 75.2 (prev. 78.4), respectively. On the inflation footing, 1yr ahead was unchanged at 3.0%, as was the longer-term 5-10yr at 2.9%. The chunky fall between readings hints at a sizeable dropping off in confidence in the second half of February, but Oxford Economics notes that while one month of decline has not reversed the major improvements made to sentiment recently, it does expect the index to remain subdued. Elsewhere, Oil closed 2.19% higher while after a quiet few weeks, Gold broke out to the upside, closing higher by 2.5%.
To mark my 2925th 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 405 points on the first trading session for March, having closed February with a gain of 1606 points. January closed with a gain of 3675 points. December saw a gain of 1890 points after finishing November with a gain of 1734 points. October ended with a gain of 3184 points, after closing September with a small gain of 228 points, after finishing August with a gain of 1485 points, 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 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 0.80% higher at a price of 5137.
The Dow Jones Industrial Average closed 90 points higher for a 0.23% gain at a price of 39,087.
The NASDAQ 100 closed 1.44% higher at a price of 18,302.
The Stoxx Europe 600 Index closed 0.60% higher.
Last Friday, the MSCI Asia Pacific closed 0.4% higher.
Last Friday, the Nikkei closed 1.90% higher at a price of 39,910.
Currencies
The Bloomberg Dollar Spot Index closed 0.26% lower.
The Euro closed 0.1% lower at $1.0834.
The British Pound closed 0.1% lower at 1.2654.
The Japanese Yen rose 0.3% closing at $150.10.
Bonds
Germany’s 10-year yield closed 4 basis points lower at 2.42%.
Britain’s 10-year yield closed 9 basis points higher at 4.21%.
U.S.10 Year Treasury closed 8 basis points lower at 4.19%.
Commodities
West Texas Intermediate crude closed 2.19% higher at $79.97 a barrel.
Gold closed 2.5% higher at $2082.10 an ounce.
Today on the Economic Front the only data of note to be released is the Euro-Zone Sentix Investor Confidence which will be released at 9.30 am.
Cash S&P 500
I have spent the last few days researching historic corrections in the S&P given this liquidity induced rally from October 2022 and again from October 2023. The good news for a correction is the seasonal chart turns bearish from this week until March 20 (plus or minus a few days) and that is it before seasonality kicks in ahead of the always positive April. Remember buybacks are coming back with a vengeance in April. Nothing seems to matter as both the DAX and Nikkei have surged to new all-time highs despite both Japan and German been in recession. I have never seen this before, while Bitcoin has continued to make new recovery highs, trading at $64,000 this morning. The 30-minute chart for the S&P has shown 12 consecutive green candles which has never happened before. The main reason for this mega move higher is liquidity. This year alone $470bn of debt has been added to the system for a now $34.5 trillion debt level. This is just insane but with the Treasury having an open check book until 2025, the debt level is just going to get bigger. How can we have a correction against this background. There are a couple of scenarios based on what happened in 2017 and 1995 when March saw a 3% correction. Yes, that is all that the bears got before markets surged to new highs for the rest of the year. The S&P has an unprecedented 14 open gaps going back to last November with the lowest ‘’Open Gap’’ at 4386. Even though all ‘’Open Gaps’’ get filled eventually, neither Powell nor Yellen will allow such a correction to unfold in an election year. The VIX has a number of gaps above, the highest and most significant comes in at 21. I would love to see the VIX hit 21, as it would enable to me to be an aggressive buyer of the S&P at that time. The S&P has not tagged its 30 MA since November 6, which is the longest period of time we have gone without this key MA been tagged. The price for the 30 MA is at 4972. Again, I will be an aggressive buyer on any move lower to this support level over the coming days. With the 14-Day RSI now closing over 71, I am happy to press the downside as I just cannot be a buyer of the markets here, especially as we have a number of negative divergences at these new all-time highs. The $NYSI will be maximum overbought when we see the latest reading tomorrow. On Thursday, the S&P hit my 5095-sell level before selling off to my 5078 T/P level. I sold the S&P again at a price of 5100, before thankfully covering this short position at 5092. On Friday, the S&P traded the whole of my next sell range as emailed to my Platinum Members. I am now short at an average rate of 5126 with no stop for now. I will have a T/P level on this position at 5114. If this view changes, I will be back with a new update for my Platinum Members.
EUR/USD
No Change. I am still flat the Euro as I continue to be a buyer on any dip lower to 1.0700/1.0770 with the same 1.0635 ‘’Closing Stop’’. I still do not want to chase the Euro higher at this time.
Dollar Index
No Change. I am still flat the Dollar. I will continue to be a seller from 104.35/105.05 with the same 105.65 ‘’Closing Stop’’. I still do not want to be long the Dollar at this time.
Cash DAX
Thankfully, we had no sell level in the DAX with the market now trading 350 points higher from where I marked prices on Thursday morning. The RSI is fried to the upside. I just cannot justify a long position here while I still have no interest in been short, as I prefer to sell the American Indexes. If this view changes I will be back with a new update for my Platinum Members.
Cash FTSE
My latest 7620 long FTSE position worked well as the market rallied to my 7660 T/P level and I am now flat. This morning the FTSE is trading at 7680. We have support from 7580/7640 where I will again be a buyer with a 7525 higher ‘’Closing Stop’’.
Dow Rolling Contract
Frustratingly, the Dow twice missed Thursday’s buy range before rallying over 300 points and I am still flat. I am not going to chase the Dow higher, continuing to be a buyer on any dip lower to 38550/38800 with a 38595 ‘’Closing Stop’’. I still do not want to be short the Dow at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
After the NDX hit my 18030-sell level, the market sold off to my revised 17950 T/P level. Subsequently, I emailed my Platinum Members to sell the NDX again. I am now short at an average rate of 18110 with no stop or T/P level for now. If this view changes, I will be back with a new update for my Platinum Members.
March BUND
My Bund plan worked well as the market sold off to my second buy level at 131.95 for a 132.30 average long position. Subsequently, the Bund rallied to my revised 132.65 T/P level and I am now flat. The Bund has support from 131.30/132.10 where I will again be a buyer with a lower 130.85 ‘’Closing Stop’’.
Gold Rolling Contract
Finally a breakout in Gold with Gold trading $50 higher from where I marked prices last Thursday. I will now raise my Gold buy level to 2050/2065 with a tight 2039 ‘’Closing Stop’’. If triggered, I will have a T/P level at 2074.
Silver Rolling Contract
No Change: I have never seen such little volatility in Silver over the past 12 months. It is as if nobody is trading this key commodity anymore. While Gold has had the odd spike, Silver continues to trade in narrow ranges every day. I am sticking to my guns in believing that Silver will at some stage break higher. I have a lot of my pension tied up in Silver and will continue to hold this position. I am still long Silver from six weeks ago at a price of 24.40. I will continue to look to add to this position at 21.50 with the same ‘’No Stop’’ or T/P level for now. If this view changes, I will be back with a new update for my Platinum Members.
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