U.S. Equity Markets were little changed in choppy trade Friday as they digested the conflicting NFP and ISM Services reports and whipsawing Treasury Yields. Stock and bond futures had been selling off in the pre-market, accelerating amid the hawkish reaction to the December NFP report – where headline jobs and earnings came in above expectations – that saw Fed cuts priced through 2024 fall from c. 135bps to just above 125bps, sending Treasury Yields even higher. But the moves soon faded with attention on the downward revisions and decline in private payrolls growth. The tumble in the December ISM Services later in the New York morning, particularly the Employment Sub-Index, saw stocks and bonds rally to session highs, with Fed 2024 cut pricing moving back higher towards c. 145bps. But stocks and U.S Treasuries pared the move back lower as Europe closed up shop. The U.S. Dollar whipped similarly to the mixed data points. Meanwhile, oil prices rallied through the American session, aided by Maersk (MAERSKB DC) announcing it was diverting all vessels through the Red Sea for the “foreseeable future” and the Hezbollah chief giving an address urging on the need for a reaction to the assassination in Beirut. Apple (AAPL) was under pressure amid Foxconn reporting poor sales figures amid demand woes, and after an NYT report that the Department of Justice is nearing an antitrust case against the Company. The U.S. labour market added 216k jobs in December, up from the prior 173k (revised down from 199k), a surprise gain with expectations for a fall to 170k. In the household survey, the Unemployment Rate was unchanged at 3.7% despite expectations for a rise to 3.8% but the labour force participation saw a notable decline to 62.5% from 62.8%. Meanwhile, the number of those employed in the household survey tumbled 683k. The wages metrics were also on the hotter side, with M/M earnings rising 0.4% (exp. 0.3%), maintaining the pace in November while Y/Y earnings rose 4.1%, above the 3.9% forecast and accelerating from the 4.0% prior. On the face of it, the report was hotter than expected with the NFP and wages above expectations while the Unemployment Rate remained the same, albeit accompanied by a drop in the participation rate. However, some dovish aspects are the downward revision to the headline (again) and while government payrolls were strong, some suggest this is unsustainable. Also, Wall Street Journalist Timiraos highlights the latest revisions to payrolls shows the three-month average for private sector hiring was 115k in December, matching the lowest level since the economy reopened in 2020. The sharp drop in the household survey employment also received a lot of attention. Markets have been leaning towards favouring a March cut, but the implied probability has decreased slightly since the data. At pixel time, markets are assigning a c. 60% probability of a 25bp cut in March, vs c 70% pre-data. The Fed will likely continue to hammer home that markets are ahead of themselves in Fed pricing but there is still plenty of data due with attention now turning to the US CPI next Thursday 11th Jan. Elsewhere, Oil rose 2.24% while Gold reversed earlier losses, to close higher by 0.7%.
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 445 points on Friday and is now ahead by 758 points for January. 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 0.18% higher at a price of 4697.
The Dow Jones Industrial Average closed 25 points higher for a 0.07% gain at a price of 37,466.
The NASDAQ 100 closed 0.15% higher at a price of 16,305.
The Stoxx Europe 600 Index closed 0.27% lower.
This morning, the MSCI Asia Pacific closed 0.6% lower.
Last Friday, the Nikkei closed 0.53% lower at a price of 33,288.
Currencies
The Bloomberg Dollar Spot Index closed 0.01% higher.
The Euro closed 0.15% higher at $1.0940.
The British Pound closed 0.4% higher at 1.2719.
The Japanese Yen fell 1.1% closing at $144.60.
Bonds
Germany’s 10-year yield closed 13 basis points higher at 2.16%.
Britain’s 10-year yield closed 12 basis points higher at 3.79%.
U.S.10 Year Treasury closed 7 basis points higher 4.00%.
Commodities
West Texas Intermediate crude closed 2.24% higher at $73.81 a barrel.
Gold closed 0.7% higher at $2045.10 an ounce.
This morning on the Economic Front we already had the release of German Factory Orders which rose 0.3% versus +1% expected. Next, we have Euro-Zone Sentix Investor Confidence at 9.30 am, followed by Retail Sales and Consumer Confidence at 10.00 am. The only other data of note is U.S. Consumer Credit Changed which will be released at 8.00 pm.
Cash S&P 500
The S&P saw plenty of two-way price action on both Thursday as the buy the dip continues to show up on any sell-off. My S&P plan worked well as the market traded lower to my 4698 buy level before rallying to my 4707 T/P level. Subsequently, I emailed my Platinum Members to buy the S&P at an average rate of 4680 on Friday. The S&P hit a low at 4663 post the NFP release before rallying to an afternoon high at 4727. As I had so many ‘’Open’’ positions I covered this latest long position too early at 4687 and I am still flat. The S&P could not hold onto its afternoon gains, falling 30 Handles into the close. The 30-Day Moving Average at 4676 continues to hold any sell-off for now. With the NDX severely oversold and the Dow overbought, the S&P is caught in the middle hence the increased two-way price action. The S&P has support from 4667/4682 where I will again be a strong buyer with a lower 4653 wider ‘’Closing Stop’’. Given how oversold both Apple and the NDX are, I do not to be short the S&P at this time. If this view changes I will be back with a new update for my Platinum Members.
EUR/USD
My 1.0935 average long Euro position worked well as the market rallied to my 1.0980 T/P level and I am now flat. This morning, the Euro is trading lower at 1.0930. We have strong support at Friday’s post NFP 1.0875 low print. Today, I will be a strong buyer from 1.0820/1.0890 with a lower 1.0765 ‘’Closing Stop’’. I still do not want to be short the Euro at this time.
Dollar Index
Shortly after I posted on Thursday, the Dollar sold off to my 102.20 T/P level on Wednesday’s 102.60 short position and I am now flat. The Dollar has support from 101.10/101.90 where I will be a strong buyer with a 100.65 ‘’closing Stop’’. I no longer want to be short the Dollar. If this view changes, I will be back with a new update for my Platinum Members.
Cash DAX
Frustratingly, the DAX just missed Friday’s 16440 buy level with a 16445 low print before rallying over 140 points and I am still flat. I still have no interest in being short the DAX, preferring to keeping to my strategy of buying dips. The DAX has support from 16330/16480. I will now raise my buy level to this area with a higher 16275 ‘’Closing Stop’’.
Cash FTSE
The FTSE continues to trade heavy, and I am still flat as the market never came close to Thursday’s sell range. With the FTSE trading lower at 7675 this morning, I will now lower my sell level to 7740/7800 with a lower 7865 ‘’Closing Stop’’. I still do not want to be long the FTSE at this time.
Dow Rolling Contract
I am still flat the Dow as the market never came close to Thursday’s sell range, trading lower 37350 as I go to press. The 14-Day RSI finally closed unchanged on Friday with a 67-print, while the McClellan Oscillator closed at negative 90. I still cannot justify a long position at these elevated levels. The VIX Friday crush continued despite the unchanged close in the American Indexes with a 5.5% fall at a price of 13.35. The VIX needs to break and close over its 50 Day MA (14.09) and 200 Day MA at 15.77 to see a more sustained sell-off in the Dow. Today, I will continue to be a seller of the Dow on any further rally to 37650/37900 with a lower 38105 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 37480.
Cash NASDAQ 100
Thursday’s lower close meant the NDX had closed lower for five straight trading sessions. This latest sell-off saw the NDX hit my 16270 second buy level for a 16330 average long position. Yellen’s ‘’Soft Landing’’ comments saw the NDX rally to my 16390 revised T/P level. Subsequently, I emailed my Platinum Members to buy the NDX again and I am now long at a price of 16320. I will add to this position at 16170 with a now lower 16095 ‘’Closing Stop’’. I will have a T/P level on this position at 16430. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
March BUND
The Bund got hit hard since Thursday’s Daily Commentary, trading 180 points lower at 137.50. This move lower sees Bund Yields at 2.15% which is 25 Basis points higher than the pre-new-year low. The Bund is now short-term oversold. We have support from 134.40/135.10 where I will be a buyer with a 133.75 ‘’Closing Stop’’. I no longer want to be short the Bund at this time.
Gold Rolling Contract
My Gold plan worked well as the market sold off to my 2028 buy level following the release of the NFP Report. Subsequently, Gold traded to an afternoon high at 2064, hitting my 2042 T/P level and I am now flat. Gold could not hold the 2060 level, falling $20 into the New York close. Today, I will again be a buyer on any dip lower to 2000/2015 with a lower 1989 ‘’Closing Stop’’. I still do not want to be short Gold at this time.
Silver Rolling Contract
Silver recovered some of Wednesday’s 2.5% fall, trading higher at 23.10 this morning. I still believe in the bull case for this precious metal. I will continue to hold my 24.40 average long position 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
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