U.S. Indices closed mixed again on Wednesday, while the Dollar finished flat with Bonds strong. Sectors were mixed, with Utilities, Tech, and Energy outperforming, with Tech names largely boosted by Oracle (ORCL) after rallying post-earnings with a chunky RPO of USD 455 billion, which USD 300 billion seems to be from OpenAI (according to the Wall Street Journal). The large backlog of orders at Oracle (ORCL) only emboldened the high demands for the AI market and helped support AI infrastructure names (semis and cloud providers). The underperforming sectors were Consumer Discretionary, Consumer Staples and Health Care, while Communication names also lagged, with weakness in Amazon (AMZN) and Meta (META) weighing on Discretionary and Communication sectors. The primary driver for the move up in bonds and downside in the Dollar was the softer-than-expected PPI report, which helped ease the hot/sticky inflation fears somewhat amid a deteriorating labour market, although attention turns to the CPI this afternoon. Meanwhile, T-Notes moved to fresh highs after a strong 10-year auction, following the strong 3-year supply on Tuesday ahead of the 30-year bond issuance on Thursday. Crude prices settled green on geopolitical developments, namely Russia attacking Ukraine with drones that entered Polish airspace, leading to Poland downing some of the Russian drones, which marks the first direct NATO engagement. Gold prices were bid on geopolitics and the soft PPI report. Elsewhere, Miran was put forward to the full Senate for Fed Governor Nomination after passing the Senate Banking Committee vote, with Politico suggesting Republicans are aiming to get him in for a Senate vote on Monday, before the start of the two-day Fed meeting that starts on Tuesday. Meanwhile, a district judge ruled that Governor Cook’s dismissal by US President Trump was unlawful, although the Trump administration has since appealed the decision to the Appeals Court. Overall, PPI was soft. The headline and core M/M prints both declined 0.1%, well beneath the +0.3% forecasts and down from the 0.9% in July. On a Y/Y basis, the headline rose 2.6%, below the 3.3% forecast and prior, with the core Y/Y rising 2.8%, below the 3.5% forecast and prior of 3.7%. The super core print rose 0.3%, easing from the prior 0.6%. with the Y/Y at 2.8%, matching the prior month pace. Within the report, the PCE components saw Airline passenger services little changed at 1.0% (prev. 1.1%), but portfolio management fees rose 2.0%, easing from the prior 5.8% pace. Within the healthcare price changes, the only notable jump was in hospital outpatient care to +0.2% from -0.7%. The data helped ease some of the hot/sticky inflation fears at a time of a softening labour market, although the CPI data due Thursday will be watched to further shape how far away the Fed is from each of its goals. The Fed’s preferred gauge of inflation is PCE, and following the PPI data, estimates from Morgan Stanley and Pantheon Macroeconomics range from 0.30-0.35%. Elsewhere, Oil closed higher by 1.77% while despite a stronger Dollar, Gold ended Wednesday’s session with a small 0.42% gain.
To mark my 3250th 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 180 points yesterday and is now ahead by 907 points for September after ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 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 0.30% higher at a price of 6532.
The Dow Jones Industrial Average closed 220 points lower for a 0.48% loss at a price of 45,490.
The NASDAQ 100 closed 0.04% higher at a price of 23,849.
The Stoxx Europe 600 Index closed 0.02% lower.
This Morning, the MSCI Asia Pacific closed 0.6% higher.
This morning, the Nikkei closed 0.75% higher at a price of 43,788.
Currencies
The Bloomberg Dollar Spot Index closed 0.07% higher.
The Euro closed 0.14% lower at $1.1696.
The British Pound closed 0.05% lower at $1.3530.
The Japanese Yen fell 0.05% closing at $147.39
Bonds
U.K.’s 10-Year Gilt closed 1 basis points lower at 4.62%.
Germany’s 10-Year Bund Yield closed 1 basis points lower at 2.65%
U.S.10 Year Treasury closed 4 basis points lower at 4.04%.
Commodities
West Texas Intermediate crude closed 1.77% higher at $63.74 a barrel.
Gold closed 0.42% higher at $3640.10 an ounce.
This afternoon on the Economic Front we have the ECB Rate Decision at 1.15 pm, followed by a press conference with ECB President Lagarde at 1.45 pm. In between, we have U.S. CPI and Weekly Jobless Claims at 1.30 pm. Finally, we have a Thirty – Year Treasury Auction at 6.00 pm.
Cash S&P 500
Stocks were mixed today, despite Oracle rising by a ridiculous 36%. I have to admit, I have never seen a large-cap stock move like that, and it seems like peak stupidity. OpenAI apparently agreed to $300 billion deal for computing with Oracle. I am not sure where OpenAI is getting $300 billion from, maybe Stargate? Perhaps they will have to go public or issue a lot of debt and venture capital rounds. I mean $300 billion is bigger than the entire market cap of companies like Verizon and Cisco. It is equal to the market cap of two Softbanks, which has a market cap of about $160 billion. The best part is that the contract does not start until 2027. This excitement led the S&P 500 to open higher, but it gave back nearly all of its gains throughout the day, only to see a final surge on a closing buy imbalance. The end was result saw the S&P 500 close 0.3% higher. The RSP equal-weight index slipped o.1%, the Nasdaq 100 (QQQ) was flat, and the equal-weight version (QQQE) fell more than 0.8%. This underscores a familiar theme: a handful of large-cap winners are masking weakness beneath the surface. Notably, the QQQE has moved sideways since August 1—literally sideways. Ahead of CPI this afternoon, Wednesday’s PPI report came in weaker than expected. I am not sure what is going on with the PPI data, but both the market and numerous survey indicators continue to point to higher prices, for the CPI. An inline print tomorrow would suggest the market has the CPI path right, keeping us on track for a rate of roughly 3.5% by May 2026. My S&P plan worked well yesterday with the market spiking on the PPI release to my 6546-sell level before falling 30 Handles. This move lower saw my revised 6526 T/P level triggered and I am now flat. This morning the S&P is trading higher at a price of 6542. We have short-term-resistance from 6554/6580 where I will be an aggressive seller with a wider 6601 ‘Closing Stop’. Despite the positive price action I have no interest in buying the S&P without a meaningful retracement. If I am taken short, I will have a T/P level at 6524.
EUR/USD
I am still short the Euro from last Friday at an average price of 1.1740 with the same 1.1825 ‘Closing Stop’. I will leave my 1.1670 T/P level unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
No Change: One of the main factors contributing to the Dollar weakness this year was the increase in Dollar hedging by non-USD based asset managers. In 2024, the Dollar was the best performing G10 currency as the greenback rose on the tide of U.S. exceptionalism. Data from the Bank of Japan between 2021 and 2024 shows that the hedging ratio for major Japanese Life Insurers dropped from around 60% to 40% as fund managers took advantage of the upward trend in the value of the Dollar. The opposite has happened so far this year and may be running out of steam. For these reasons I am happy to be a buyer of dips in the Dollar. On Friday, the Dollar hit my buy range for a now 97.70 long position. I will add to this position at 97.00 while leaving my 96.45 ‘Closing Stop’ unchanged. I will leave my 98.50 T/P level unchanged for now. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
The Russell just missed Wednesday’s sell range before having a small sell-off into the close. Today, I will continue to be a seller from 2405/2465 with the same 2505 ‘Closing Stop’. If I am taken short, I will have a T/P level at 2365. I still do not want to be long the Russell at this time.
FTSE 100
The FTSE has not moved in either direction for the month of September which is extremely strange given the political carnage and higher Gilt Yields. I have no interest in shorting the market preferring to wait for a sell-off to my buy range before pulling the trigger. Therefore, I will continue to be a buyer on any dip lower to 9070/9150 with the same 8995 wider ‘Closing Stop’. If I am taken long, I will have a T/P level at 9205. If this view changes, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
I am still flat. The Dow hit a post-PPI high at 45810 before falling over 400 points and was the weakest of the main American Indexes on Wednesday. Ahead of CPI, I will now lower my sell level to 45800/46050 with a lower 46205 tight ‘Closing Stop’. I have no interest in buying the Dow at this time. If I am taken short, I will have a T/P level at 45520.
Cash NASDAQ 100
The NDX rallied to my second sell level at 23970 post Wednesday’s PPI release. I am now short at an average rate of 23890 with a now higher 23750 T/P level. I will leave my 24165 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
I am still flat as the market never came close to Wednesday’s buy range. Ahead of this afternoon’s ECB rate announcement and U.S. CPI Report I will continue to be a buyer from 128.60/129.40 with the same 127.85 ‘Closing Stop’. If I am taken long, I will have a T/P level at 129.95. I still do not want to be short the Bund at this time.
Gold Rolling Contract
Gold continues to trade near all-time highs and I am still flat as neither my buy/sell levels were threatened on Wednesday. Today, I will continue to be a seller from 3690/3710 with the same 3731 ‘Closing Stop’. Gold has support below from 3530/3550 where I will be a small buyer with the same 3505 ‘Closing Stop’. If I am taken short, I will have a T/P level at 3657. If I am taken long, I will have a T/P level at 3573.
Silver Rolling Contract
I am still flat. Today, I will continue to be a buyer on any dip lower to 39.20/40.10 with the same 38.25 ‘Closing Stop’. If I am taken long, I will have a T/P level at 41.05.
Please Note: There will be no Daily Commentary tomorrow. Any of my calls that are not executed today and are subsequently triggered on Friday will see me return with updated emails for my Platinum Members.
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