U.S. Equity Markets closed higher Friday for the fifth consecutive trading session following the below forecast Non-Farm Payrolls report, reducing Fed tightening expectations. Payrolls in October totalled 150K, 30K less than expected while notably the two prior months were revised down by 101K. The private sector hired a net 99K which was 46K below expectations. Also reflecting a weakening labour market was the other metric, the household survey, which saw a job decline of 348K, sending the Unemployment Rate up by one tenth to 3.9%. This is the highest rate since January 2022. Despite an underperforming ‘’Apple’’, the NASDAQ 100 led Friday’s gains closing higher by a further 1.22%. The NDX has had its best trading week since November 2022. Helping the NDX last week was the massive 50-point fall in 10 Year Treasuries. The VIX closed lower by 4.75% at a price of 14.75. It is only the previous week that the VIX had spiked above 23. According to the Bureau of Labor Statistics, U.S. productivity rose at a 4.7% annualised rate in the third quarter. This is a gain of nearly 1 percentage point from the previous quarter’s 3.6% rate. It is also the largest advance in productivity in nearly three years. Plus, unit labour costs, a measure of what businesses pay employees for one unit of output, decreased by 0.8%, the first downward movement since late 2022. The consecutive gains in productivity and the decrease in labour costs indicate businesses are working to improve efficiency in the face of worsening economic conditions. Apple (AAPL) shares dropped after the company released its earnings post-market Thursday, revealing a fourth consecutive quarter of declining year-over-year revenue. While earnings surpassed expectations at $1.46 per share (compared to the expected $1.39 per share) and revenue came in at $89.5 billion (surpassing the expected $89.28 billion), driven by a record-breaking quarter in iPhone sales, the lack of clear guidance for the upcoming December quarter and the cautious tone during the earnings call created uncertainty among investors. This has cast a shadow over the company’s outlook, signalling a potential continuation of sluggish growth during the usually lucrative holiday season. PayPal (PYPL) shares climbed Friday during premarket trading, adding nearly $4 billion in value. This move higher comes after the payments company beat earnings projections for the third quarter and increased earnings per share by an impressive 20% to $1.30. PayPal also announced a plan to become “leaner” going forward. According to its new CEO, Alex Chriss, the company will begin to align its resources with the most profitable portions of its business in order to bring costs down. PayPal is looking to reverse its yearlong slide in stock price with this new strategy. Additionally, the company revealed a subpoena from the U.S. Securities and Exchange Commission (“SEC”) related to its crypto stablecoin and said it is cooperating with document production. Moderna (MRNA) slashed its revenue outlook for 2024, which sent shares tumbling more than 17% at market open on Thursday afternoon. The company’s $4 billion revenue forecast for next year is significantly below analyst estimates of $6 billion. It also reported a net loss of $3.6 billion for the third quarter. However, one bright spot was Moderna’s $1.8 billion in sales for the quarter, which exceeded expectations. Overall, Moderna is expected to face a challenging market as it pivots from the pandemic era in which it thrived. Qualcomm (QCOM) reported better-than-expected earnings for its fourth quarter and also raised its profit outlook. While earnings per share and revenue did fall in the most recent quarter, the figures were still above analysts’ estimates. Looking ahead, the company predicts sales of $9.5 billion next quarter, which is higher than Wall Street estimates of $9.26 billion. Meanwhile, earnings per share are expected to be between $2.25 and $2.45, which is on the higher end of the $2.25 projected by analysts. The positive earnings report lifted shares of Qualcomm to more than $119 during midday trading and suggests the smartphone market is now poised for a rebound. European Markets closed higher. The Bank of England (“BOE”) has voted 6-3 in favour of leaving its benchmark lending rate at its 15-year high of 5.25% on Thursday. Andrew Bailey, the central bank’s governor, emphasised that it is “much too early” to be discussing rate cuts. The central bankers agreed that a restrictive policy would need to be maintained for an extended period to properly lower the U.K.’s inflation. Despite the BOE’s decision, three members of the committee favoured an additional 25-basis-point rate hike to 5.5%, citing a tight labour market. BOE officials are not yet predicting a recession, but they did note that the U.K. economy may stall in the coming year. Plus, they said that wage pressure remains a concern and, should it continue, could prompt an additional rate hike in the future. In Asia, Treasury Secretary Janet Yellen refuted claims that the U.S. is moving business away from the Indo-Pacific region, calling them “wholly unfounded.” Rather, she emphasised that the U.S. is seeking to bolster trade and investment within this part of the world. And according to Yellen, trade between the U.S. and Indo-Pacific region is up more than 25% since 2019. Her comments come about a week before the U.S. will host the Asia-Pacific Economic Cooperation leadership summit in San Francisco. The improvement of relations with the Indo-Pacific region is critical for the Biden administration’s goals to reinforce global supply chains, reduce the number of nations it relies on, and shield the economy from geopolitical risks. Elsewhere, Oil closed 2.36% lower on Friday, while a quiet end to the week saw Gold rise 0.9% on the back of the 1.2% fall in the U.S. Dollar.
To mark my 2900th 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 165 points on Friday and is now ahead by 325 points for November. October ended with a gain of 3184 points, after closing September with a small gain of 228 points, after finishing August with 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 0.94% higher at a price of 4358.
The Dow Jones Industrial Average closed 222 points higher for a 0.66% gain at a price of 34,061.
The NASDAQ 100 closed 1.21% higher at a price of 15.099.
The Stoxx Europe 600 Index closed 0.17% higher.
Last Friday, the MSCI Asia Pacific closed 0.8% higher.
Last Friday, the Nikkei closed 1.1% higher at a price of 31,949.
Currencies
The Bloomberg Dollar Spot Index closed 1.21% lower.
The Euro closed 1.2% higher at $1.0727.
The British Pound closed 1.1% higher at 123.80.
The Japanese Yen rose 0.9% closing at $149.80.
Bonds
Germany’s 10-year yield closed 9 basis points lower at 2.66%.
Britain’s 10-year yield closed 21 basis points lower at 4.29%.
U.S.10 Year Treasury closed 16 basis points lower at 4.58%.
Commodities
West Texas Intermediate crude closed 2.36% lower at $80.51 a barrel.
Gold closed 0.8% higher at $1992.10 an ounce.
This morning on the Economic Front we have German Factory Orders at 7.00 am, followed by German and Euro-Zone Services PMI at 8.55 am and 9.00 am respectively. This is followed by U.K. Construction PMI and Euro-Zone Sentix Investor Confidence at 9.30 am. There are no U.S. economic releases scheduled for today.
Cash S&P 500
The S&P just had its biggest weekly rally since February 2022, as two hard weeks of selling were erased in just five trading sessions. As a result, we are definitely short-term overbought but at the same time we are witnessing an epic short squeeze as so many did not position for this move and still have not. Even though we are short-term overbought technical signals are still on the floor. Thankfully we were long coming into last week having stuck to my guns despite the awful price action. This incredible 265 Handle rally gave everyone a chance to exit any long stale positions ahead of the weekend as mentioned in Thursday’s Daily Commentary. The S&P is now back above both its 50-Day and 200 Day Moving Averages which come in at 4247 and 4347 respectively. Now its gets tricky. I am still flat the S&P as the market never gave me a chance to re-buy. The S&P has support from 4320/4335. I will be a small buyer on any dip to this area with a tight 4305 ‘’Closing Stop’’. The S&P has strong resistance from 4385/4405. I will be a seller on any further move higher to this area with a 4422 ‘’Closing Stop’’.
EUR/USD
My long 1.0570 Euro position worked well as the market rallied to my 1.0630 T/P level and I am still flat. The Euro is now moving higher as expected trading at 1.0725 as I go to post. The Euro has support from 1.0610/1.0670 where I will be an aggressive buyer with a 1.0555 ‘’Closing Stop’’. I still do not want to be short the Euro at this time.
September Dollar Index
My latest average 106.60 short Dollar position worked well as the market sold off to my 106.08 T/P level and I am now flat. The much worse than expected NFP Report sees the Dollar trading lower this morning at 105.10. We have support from 104.00/104.60 where I will be a buyer with a tight 103.45 ‘’Closing Stop’’. Following last week’s 200 point move lower I no longer want to be a buyer of the Dollar at this time.
Cash DAX
The DAX has now risen a further 300 points since I posted on Thursday. I am still flat as my buy level was never threatened. Thankfully, we had no sell levels in these markets as yet again short positions have been obliterated. Given the massive move last week I am going to stay flat the DAX today. I still do not want to be short and I have no interesting in buying the DAX over 15,100 for now. If this view changes I will be back with a new update for my Platinum Members.
Cash FTSE
Frustratingly the FTSE just missed Thursday’s initial 7320 buy level before rallying to trade at 7410 as I go to post. I will now raise my buy level slightly to 7300/7360 with a higher 7245 ‘’Closing Stop’’. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
Incredible price action with the Dow trading 1000 points higher from where I marked prices on Thursday morning. This aggressive move higher saw the Dow join both the S&P and NDX in closing over its 200 Day Moving Average (33804) and 50 Day MA (33879). No matter what you believe this is an impressive move given the geopolitical back drop from the previous weekend. Internally the market is extremely overbought as shown by the McClellan Oscillator which closed at +278 on Friday night. This is one of the most overbought readings form the MO in many months. I am still flat the Dow. We have resistance from 34180/34400 where I will be a strong seller with a 34605 ‘’Closing Stop’’. I no longer want to be long the Dow at this time.
Cash NASDAQ 100
Wow! A 1100-point rally since last Thursday week’s 14060 low print is some rally as yet again anyone who is short has been roasted. After the NDX hit my 14870-sell level on Thursday we had a small 80-point sell-off enabling me to cover this position at my revised 14817 T/P level as emailed to my Platinum Members. Given how short-term overbought the NDX is trading I sold the market again on Friday at an average rate of 14965. I am still short with a now higher 14910 T/P level. I will have a higher tight 15125 ‘’Closing Stop’’ 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
Weaker than expected Non-Farm Payrolls saw Bund Yields fall a further 9 basis points on Friday and I am still flat. The Bund has strong resistance from 131.10/131.80 where I will be a small seller with a 132.35 tight ‘’Closing Stop’’. I no longer want to be long the Bund at this time.
Gold Rolling Contract
Despite the much weaker Dollar, Gold ended the week below the key $2000 pivot point. Although Gold is overbought, I have no interest in having a short position. I will now raise my buy level to 1954/1969 with a higher 1945 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. I am still long Silver from six weeks ago at 24.05. Silver has traded in a narrow 100-point range with very small daily ranges over the past few weeks. I am extremely bullish of Silver while frustrated that Silver has not followed the price of Gold higher. 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.
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