U.S. Indices saw strong gains on Friday with outperformance in the tech-heavy Nasdaq 100 (+1.7%) supported by gains in Nvidia (NVDA) (+4.5%) and Tesla (TSLA) (+8.3%). Newsflow was sparse to the end the week as participants continued to return from the holidays ahead of risk events picking up this week in the form of FOMC Minutes and the U.S. Employment Report on Friday. Despite saying this, ISM Manufacturing PMI beat on the headline, and above the top end of the analyst forecast range, while internals were more mixed as prices paid rose above expectations and employment disappointed. Out of Washington, U.S. Republican Mike Johnson was re-elected US House Speaker and was then congratulated by President-elect Trump, who had previously endorsed him. On the Fed footing, Barkin (2027 voter) said the baseline outlook for 2025 is positive with more upside risk than downside risks to growth and is in the camp of staying restrictive for longer given possible upside inflation risks. Sectors were all in the green with Consumer Discretionary and Tech outperforming, buoyed by the aforementioned stocks, while Materials was the relative laggard and weighed on by President Biden formally blocking Nippon Steel’s acquisition of US Steel (X) (-6.5%). Elsewhere, the Dollar is lower with Sterling and the EURO as the G10 outperformers and the Canadian Dollar again lagged. Crude prices were firmer and extended higher throughout the US session, given the broader Dollar weakness and ongoing geopolitical concerns. Lastly, T-Notes ultimately saw slight weakness after ISM beat ahead of supply, FOMC Minutes and NFP this week. The ISM Manufacturing PMI beat on the headline, rising to 49.3 from 48.4, above the consensus, 48.4, and above the top end of the analyst forecast range. New Orders rose to 52.5 from 50.4, while production rose to 50.3 from 46.8, returning to expansion after six months in contractionary. Elsewhere, prices paid rose to 52.5 from 50.3, above the 51.7 forecast but within the 49.0-53.5 range. Employment, meanwhile, ahead of NFP this week, fell to 45.3 from 48.1, beneath the 48.0 consensus and the analyst forecast range. It also highlighted that of the six large manufacturing sectors, not a single one expanded employment in December. Overall, the upside in new orders and production is encouraging, although the downbeat employment metric is a concern. Looking ahead, amid the threat of Trump tariffs, ING writes that “US manufacturing activity looks set to remain subdued at least until there is some clarity on the trading environment they face.” Meanwhile, Fed Member Barkin said the baseline outlook for 2025 is positive with more upside risk than downside risks to growth, noting how as long as employment and asset values remain strong, consumers will spend. He acknowledged the labour market is more likely to break towards increased hiring than towards layoffs. On inflation, Barkin says there is still more work to do as it is not yet back to target, while there are also some potential upside risks to inflation. Barkin still perceives core underlying inflation is coming down nicely, and the message from businesses is loud and clear that consumers are becoming more price sensitive. He expects 12 month inflation to decline in the coming months, particularly given base effects over the prior year. Barkin is in the camp of staying restrictive for longer due to possible upside inflation risks, and noted the conditions for cutting rates again include confidence in inflation’s return to 2% or weakening of demand. He noted how the Fed is well positioned to respond to economic developments, but added the story of 2025 will be less about monetary policy and more about economic fundamentals, and perhaps geopolitics. He said that uncertainty in financial markets appears to have fallen and the market predicted policy path seems aligned with the Fed median. Elsewhere, Oil closed 1.13% higher while Gold ended Friday with a small 0.6% gain following a trading session that witnessed plenty of two-way price action.
To mark my 3100th issue of TraderNoble Daily Commentary I am offering a special 2-Year rate of Euro 2750 for my Platinum Service which includes 1 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 lost 373 points on the first trading session for January after closing December with a gain of 1997 points after closing November with a gain of 3049 points having finished October with a gain of 2179 points. September saw a gain of 4402 points following a 301-point loss for August after closing July with a gain of 1918 points while June closed with a gain of 2074 points, having made 1843 points in May. The Platinum Service made 4010 points in April after ending March with a gain of 2113 points. February closed with a gain of 1606 points, after closing January 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 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 1.26% higher at a price of 5942.
The Dow Jones Industrial Average closed 339 points higher for a 0.80% gain at a price of 42,732.
The NASDAQ 100 closed 1.67% higher at a price of 21,326.
The Stoxx Europe 600 Index closed 0.49% lower.
This morning, the MSCI Asia Pacific closed 0.5% lower.
This morning, the Nikkei closed 0.96% lower at a price of 39,894.
Currencies
The Bloomberg Dollar Spot Index closed 0.43% lower.
The Euro closed 0.45% higher at $1.0308.
The British Pound closed 0.4% lower at 1.2423.
The Japanese Yen fell 0.2% closing at $157.31.
Bonds
Germany’s 10-year yield closed 6 basis points higher 2.43%.
Britain’s 10-year yield closed 3 basis points higher at 4.60%.
U.S.10 Year Treasury closed 3 basis points higher at 4.60%.
Commodities
West Texas Intermediate crude closed 1.13% higher at $73.96 a barrel.
Gold closed 0.6% higher at $2639 an ounce.
This morning on the Economic front we have German, Euro-Zone and U.K. Composite PMI at 8.55 am, 9.00 am and 9.30 am respectively. Next, we have Euro-Zone Sentix Investor Confidence at 10.00 am followed by German CPI at 1.00 pm. This is followed by U.S. Composite PMI at 2.45 pm. Finally, we have Durable Goods Orders at 3.00 pm and a Three-Year Treasury Auction at 6.00 pm.
Cash S&P 500
We are now up and running for 2025. This is the fifth year of a 10-year cycle which has for some reason produced new market highs in every decade since 1900. Of course, no fifth year has begun the year with such high market valuations and one wonders how much of the fifth year gains have been front loaded by the constant flow of liquidity. So, on paper with markets near a historic Market Cap of 200% GDP further gains seem like a real tall order. But Wall Street seems pretty much convinced with 2025 S&P 500 forecasts ranging from 6000 from Cantor to 7007 from Wells Fargo which are the same crew that got 2024 completely wrong with Cantor coming in at 4400 for year-end 2024 and Wells Fargo at 4625. I am not saying they could be wrong again this year, but they may well be as targets are a mug’s game. Indeed several of these banks called for a year-end level of 6300 and clearly that did not happen with anyone chasing this level got clipped into year-end. But for all the hurrah about the S&P and NDX gains in 2024, there are some ugly truths lurking below that was not actually as bullish as Wall Street and the media were advertising. True, markets rose, but whereas the S&P and NDX made big gains the rest did much less so. Equal Weight for the NDX ended 2024 with a gain of 6% compared the NASDAQ 100’s gain of 25% which is mind blowing. If you look under the hood it is the weakest bull market ever. Past bull markets saw new highs in ‘’Cumulative New Highs/New Lows every time, this time not even close. The only time the S&P kept running with ever weakening in new highs/ new lows was during the tech bubble that ended badly. There are numerous examples of this that I can show. On the positive side of the ledger, internals have improved dramatically over the past 10 days as shown by the McClellan Oscillator which closed positive on Friday night. This means that the S&P will probably rally for a few more days before this indicator becomes short-term overbought. The key for me is the Dollar. Any sign of weakening and Equity Markets rally. Shortly after I posted on Thursday the S&P traded the whole of my buy range for a 5864 average long position. Hindsight is a wonderful thing given the subsequent rally but as I did not want to add to the losses already sustained by the Dollar rally I exited this long position for a small loss at 5857 and I am now flat. This is extremely frustrating with the S&P trading at 5950 this morning. The S&P has short-term support from 5915/5930. I will be a small buyer on any dip to this area with a 5899 ‘’Closing Stop’’. The S&P has resistance from 6010/6030. I will now raise my sell level to this area with a higher 6045 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 5945. If I am taken short, I will have a T/P level at 5996.
EUR/USD
Wrong! After holding a long position for the best part of three weeks, I was finally stopped out of my 1.0553 trade at a price of 1.0295. Subsequently, I emailed my Platinum Members on Friday to buy the Euro again which I did at 1.0281. The Euro is severely oversold having fallen over 1000 points since mid-September and is due a bounce. I will add to this position on any further move lower to 1.0211 while I will have a stop at 1.1045. Meanwhile my T/P level will be at 1.0365. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
Wrong! On Thursday I was stopped out of my 107.60 average short position at 108.55 before subsequently selling the Dollar again on Friday as emailed to my Platinum Members at a price of 108.95. I will add to this position on any further move higher to 109.65 with a 110.15 ‘’Closing Stop’’. I will have a T/P level on this position at 108.30. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
There is no doubt that given both the Political and Economic backdrop that the German DAX has been the most difficult market to get an edge on. While the DAX has underperformed both the U.K. and American Indexes over the past two weeks it will take a brave investor to go short. The DAX has support below from 19700/19800 where I will be a small buyer with a 19595 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 19880.
Cash FTSE
The FTSE never came close to Thursday’s buy range, and I am still flat. This morning, the FTSE is trading at a price of 8210 as I go to press. I will now raise my buy level to 8080/8150 with a higher 8015 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 8205. I still do not want to be short the FTSE at this time. If this view changes, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
Frustrating! The Dow missed my 42150-buy level with a 42175 low print on Thursday before rallying over 500 points and I am still flat. Today, I will raise my buy level to 42300/42550 with a higher 42095 ‘’Closing Stop’’. The Dow has short-term resistance at its 50 Day Moving Average (43435). I will use any rally to this area (43400/43650) to be an aggressive seller with a 43805 tight ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 43160. If I am taken long, I will have a T/P level at 42740.
Cash NASDAQ 100
The NDX had a nice bounce on Friday following Thursday’s aggressive sell-off. This move higher saw my 21310 T/P level triggered on my latest 21260 average long position and I am still flat. With the 50 Day Moving Average at a price of 21,000 continuing to attract buying on dips I will continue to use this key support level to buy the market. Today, I will be a small buyer from 21120/21220 with a wider 20985 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 21340. I still do not want to be short the NDX at this time.
March BUND
The Bund had a rebound high at 133.95 before following the Treasury Market lower on Friday. I am still long the Bund at an average rate of 133.50 with a now lower 133.80 T/P level. I will leave my 132.45 ‘’Closing Price’’ 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 Gold despite Friday’s volatile trading session which witnessed plenty of two-way price action. As I am still long Silver, I have no interest in chasing the price of Gold higher. Therefore, I will continue to be a buyer on any dip lower 2575/2591 with the same 2559 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2603.
Silver Rolling Contract
No Change: I am still long Silver at an average price of 30.95 with the same 28.95 ‘’Closing Stop’’. I will leave my 31.40 T/P level unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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