Despite the Bank of Canada raising Interest Rates by 0.5% and a much higher PPI print, U.S. Equity Markets finished yesterday higher led by the 2% rebound in the NASDAQ 100. The U.S. Bureau of Labour Statistics’ Producer Price Index data for March rose 11.2% on a year-over-year basis compared with the anticipated jump of 10.6% and February’s upwardly revised rise of 10.3% – marking the highest on record based on data going back to 2010. This supports the Federal Reserve’s decision to raise interest rates, with money managers forecasting a 0.5% rate increase for the upcoming May and June Federal Open Market Committee meetings. If these figures end up being the peak of the inflation data, it could encourage institutional investors. However, if the numbers do not ease, it could drive further negativity – as it would mean interest rates will need to increase even more due to rising costs and weaker economic output. Meanwhile, JPMorgan Chase (JPM) reported first-quarter credit loss provisions of $1.46 billion versus the anticipated $658.7 million, indicating the investment bank is concerned about counterparty risk and increased charge-offs amid ongoing economic uncertainty. Within the S&P 500 Index, nine of the 11 sectors finished higher. European Markets closed lower. Russian President Vladimir Putin said negotiations with Ukraine reached a “dead end” and Moscow will continue its military operations. Italian Finance Minister Daniele Franco said the government is prepared to provide additional fiscal stimulus to support economic growth. The Bank of France’s Business Sentiment Survey for April indicated companies are anticipating 0.25% growth in the first quarter compared with the previous estimate of 0.5% in March. British grocer Tesco warned it will see a decline in profits due to rising costs. Meanwhile, luxury goods firm LVMH said lockdowns in China are weighing on demand. In Asia, Japanese Prime Minister Fumio Kishida said he will enact measures to ensure the Government Pension Investment Fund can invest more in start-ups and venture capital. Japan’s Core Machinery Orders growth for February was lower than expected, hitting its lowest level since April 2020, as businesses reduced spending. Chinese Premier Li Keqiang warned about economic output risks, saying local authorities should increase urgency when implementing policies to support growth. India’s Consumer Price Index figures for March were stronger than expected as food and beverage costs surged, signalling the central bank may be forced to raise interest rates. Elsewhere, Oil closed 3% higher as the U.S.’s increased inventories failed to ease worries of a tight global supply amid expectations that oil traders will steer clear of Russian crude, while Gold rose 0.54% following U.S. inflation data.
To mark my 2500th 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 70 points yesterday, and is now ahead by 1076 points for April after closing March with a gain of 5883 points. The Platinum Service made an impressive 5324 points gain in February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss, having made 2466 points in November, 1028 points in October, 2866 points in September, 1543 points in August, and 996 points in July. The Platinum Service made 1366 points in June, 1439 points in May, 1244 points in April, after ending March with an impressive gain of 3769 points. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 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 1.12% higher at a price of 4446.
The Dow Jones Industrial Average closed 344 points higher for a 1.01% gain at a price of 34,564.
The NASDAQ 100 closed 2% higher at a price of 14,217.
The Stoxx Europe 600 Index closed 0.4% higher.
Yesterday, the MSCI Asia Pacific Index rose 0.2%.
Yesterday, the Nikkei closed 0.2% higher at a price of 26,843.
Currencies
The Bloomberg Dollar Spot Index closed 0.3% lower.
The Euro closed 0.4% higher at $1.0879.
The British Pound closed 0.8% higher at 1.3104.
The Japanese Yen fell 0.1%, closing at $125.57.
Bonds
Germany’s 10-year yield closed two basis points lower at 0.77%.
Britain’s 10-year yield closed two basis points higher at 1.82%.
US 10 Year Treasury closed one basis points lower 2.72%.
Commodities
West Texas Intermediate crude closed 3% higher at $104.05 a barrel.
Gold closed 0.54% higher at $1978.10 an ounce.
This morning on the Economic Front we have U.K. Bank of England Credit Conditions Survey. This is followed at 12.45 pm by the ECB Rate Decision and Lagarde Press Conference at 1.30 pm. At the same time we have U.S. Weekly Jobless Claims and Retail Sales. Finally, at 3.00 pm we have Business Inventories and the University of Michigan Consumer Sentiment Index.
Cash S&P 500
The Stock Market generated its fourth consecutive Hindenburg Omen on Tuesday. We now have four H.O.’s on the clock at the same time which has never happened before. Although one HO will expire on Monday, this will still leave three simultaneous H.O. Stock Market Crash signals on the clock, with the latest one valid until August 12, 2022. With inflation hitting a 41-year high the Fed are trapped as this is not a demand driven inflation, as seen in the past. It is a supply constraint issue. The only tools that the fed have to fight this, is by raising interest rates or to pull money from the economy by selling securities that it holds on its balance sheet. These tools reduce aggregate demand but do not increase aggregate supply. How to increase supply is new and will not end well. However, the S&P rose yesterday as we are in a seasonally strong time of the year ahead of the Easter break. This move higher saw my 4440 sell level triggered. As I am still long the NDX, I am happy to hold my S&P short position. I will now raise my T/P level on this position to 4428. I will add to this short position at 4470 with a tight 4483 stop. Meanwhile, I will continue to be a buyer on any dip lower to 4340/4360 with the same no stop policy for now. If I am taken long I will have a T/P level at 4379.
EUR/USD
My latest long Euro position worked well with the market rallying to my 1.0855 T/P level and I am now flat. The Euro has resistance from 1.0970/1.1020 where I will be a small seller with a 1.1061 stop. Meanwhile, I will continue to be a buyer on dips with my buy level today being from 1.0770/1.0830 with a 1.0715 tight stop.
March Dollar Index
My Dollar plan worked well with the market rallying to my 100.40 sell level before trading lower to my 100.05 T/P level and I am now flat. Today, I will again be a seller from 100.30/100.80 with the same 101.21 stop.
Cash DAX
Ahead of the ECB Meeting I will not chase the DAX higher, leaving my 13740/13840 buy level unchanged with the same 13655 stop. If I am taken long I will have a T/P level at 13905.
Cash FTSE
No Change. I am still a small seller on any further rally to 7630/7690 with a higher 7731 stop. If I am taken short I will have a T/P level at 7585.
Dow Rolling Contract
The Dow never came close to yesterday’s buy level before rallying over 400 points from where I marked prices 24 hours ago. I am still flat. The Dow has support from 34100/34350 and I will now move my buy level to this area with a higher 33895 stop. Ahead of the Easter Weekend, I still do not want to be short the Dow.
Cash NASDAQ 100
No Change. I am still aggressively long at an average price of 14327. As I am now short the S&P, I will now raise my T/P level on this position to 14360. I will continue to have no stop and I will be back with an update for my Platinum Members if my T/P level is triggered.
June BUND
No Change. I am still long at an average rate of 156.40 with the same 155.95 exit level as I want where possible to be flat over the long weekend.
Gold Rolling Contract
I am still flat. I am not going to chase the Gold Market higher, leaving my 1917/1932 buy level unchanged with the same 1903 stop. If I am taken long I will have a T/P level at 1941.
Silver Rolling Contract
No Change. I am still a buyer on any dip lower to 24.10/24.70 with a higher 23.55 stop.
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