U.S. Indexes closed with an upward bias as the NASDAQ 100 outperformed, buoyed by strength in Mag-7 (ex-MSFT), with NVDA and MU being particularly fruitful. Nvidia CEO has joined President Trump on his trip to China, while Micron saw a chunky BofA PT lift. Focus resides around the Trump/Xi summit, as well as the Middle East, albeit there was nothing incrementally new, especially given that Trump is in China. Although VP Vance, on Iran talks, thinks they are making progress, and focused on a diplomatic pathway for now. US PPI garnered a hawkish reaction, as it was much hotter than expected across the board, which saw US indices and Treasuries fall, while the Dollar rose as it showed signs of broader price pressures beyond energy. The New Zealand Dollar was the G10 FX laggard, and hit on higher than anticipated inflation expectations, following on from the recent poor GDP print – raising stagflationary concerns. While in Europe, the focus resides around the UK and PM Starmer’s future, as he continues to be under significant pressure. The crude complex saw losses in choppy trade, in light headline newsflow, while precious metals were divergent – Spot Gold sits in the red and Silver in the green. Sectors are predominantly firmer, with Communications and Tech sitting atop the pile, with Utilities and Financials at the bottom. Back to Treasuries, which saw choppy trade, as the initial leg lower on PPI was offset by lower crude prices. On the Fed footing, Collins hopes the economy will allow for more rate cuts later this year, but it is possible the Fed will need to hike interest rates to cool inflation pressures. US PPI came in significantly hotter than expected. Headline producer prices rose 1.4% M/M, above both the 0.5% forecast and prior print, while the Y/Y rate accelerated to 6.0% from 4.0%, topping the 4.9% consensus. Although headline measures can be heavily influenced by swings in energy prices, the underlying details also pointed to broader inflation pressures. Nearly 60% of the April increase in final demand prices was attributed to a 1.2% rise in final demand services, reinforcing the hot services inflation seen in Tuesday’s CPI report and suggesting price pressures are becoming more widespread. Core measures excluding food and energy were also firm, confirming sticky underlying inflation. Core PPI rose 1.0% M/M (exp. 0.3%, prev. 0.1%), while the Y/Y rate accelerated to 5.2% from 3.8%, above the 4.3% forecast. Meanwhile, the supercore measure ex food, energy and trade rose 0.6% M/M (exp. 0.3%, prev. 0.2%), with the Y/Y rate climbing to 4.4% from 3.6%. The PPI components feeding into PCE were mixed. Portfolio management prices declined, while air passenger transportation prices cooled from the prior pace. Healthcare-related measures were broadly stable, with outpatient hospital care slowing while nursing home care accelerated. The hotter-than-expected PPI report, alongside signs of broader inflation pressures beyond energy alone, strengthens the case for Fed hawks and reinforces the Fed’s ability to focus more heavily on inflation risks rather than labour market weakness, particularly as recent employment data continues to point to a relatively stable jobs market. Oxford Economics noted that higher energy costs are beginning to bleed into broader goods and services categories, including transportation, which should keep producer price inflation elevated in the months ahead. The consultancy also highlighted AI-related demand and DRAM shortages as drivers of elevated electronic component prices. OxEco currently tracks April headline PCE at 0.4% M/M and 3.8% Y/Y — the hottest since May 2023 — while core PCE is seen at 0.3% M/M. Fed Member Kashkari said that Inflation is too high, and huge question mark about how long the Hormuz Strait will be closed, and that will have a big effect on inflation. The Minneapolis Fed President said he is not surprised by the headline inflation rise, and what matters is how persistent the strict closure is. Speaking on the new Fed Chair, Kashkari noted they have a lot of influence and will have to persuade other policymakers. Elsewhere, Oil closed lower by 1% while Gold was flat.
To mark my 3375th 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 348 points yesterday and is now ahead by 440 points for May having ended April with a gain of 1730 points, after ending March with a massive gain of 9002 points, having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while 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 0.58% higher at a price of 7444.
The Dow Jones Industrial Average closed 67 points lower for a 0.14% loss at a price of 49,693.
The NASDAQ 100 closed 1.04% higher at a price of 29,366.
The Stoxx Europe 600 Index closed 0.66% higher.
This Morning, the MSCI Asia Pacific closed 0.3% higher.
This Morning, the Nikkei closed 0.75% lower at a price of 62,795.
Currencies
The Bloomberg Dollar Spot Index closed 0.22% higher.
The Euro closed 0.24% lower at $1.1709.
The British Pound closed 0.03% lower at $1.3519.
The Japanese Yen fell 0.12% closing at $157.86.
Bonds
U.K.’s 10-Year Gilt closed 5 basis points lower at 5.06%.
Germany’s 10-Year Bund Yield closed 1 basis points lower at 3.10%
U.S.10 Year Treasury closed 2 basis points higher at 4.48%.
Commodities
West Texas Intermediate crude closed 1.14% lower at $101.00 a barrel.
Gold closed 0.14% higher at $4691.10 an ounce.
This morning on the Economic Front we have GDP at 7.00 am. At 10.15 pm we have a speech from ECB President Lagarde. Next, we have U.S. Retail Sales and the Weekly Jobless Claims at 1.30 pm. This is followed by Business Inventories at 3.00 pm and the Atlanta Fed GDP Now at 4.30 pm. Finally, we have a speech from Fed Member Williams at 5.45 pm and a speech from Barr at 7.00 pm.
Cash S&P 500
Dispersion continues to run very hot in the market, with the S&P Dispersion Index rising to nearly 41 and the 3-month Implied Correlation Index falling below 12. The spread between the two has climbed to a new all-time high of 29, which is notable because mega-cap earnings are essentially behind us, with the exception of NVIDIA. Under normal circumstances, this trade likely should have peaked a few weeks ago. However, with NVIDIA reporting results next week, the trade may finally be nearing its conclusion. Ultimately, what appears to be driving this dispersion is that, rather than continuing to decline, implied volatility in the S&P 500 is actually rising. That means the average implied volatility for S&P 500 stocks is rising. Because the VIX is not rising, or at least not rising as quickly, it is creating a wider gap in implied dispersion. One thing that stands out at this point is that 21-day realised volatility is 9.8, while the VIX is at 17.9. To me, that implies traders are betting that volatility will eventually return. NVIDIA earnings next week could play a major role in this cycle, as we know that after NVIDIA reports, its implied volatility will likely fall sharply, which should help push dispersion lower. For now, it is a tale of two markets. The technology sector is leading the S&P 500 by 19 percentage points, and every other sector is underperforming. In fact, the energy sector is underperforming the S&P 500 by 20 percentage points. Ironic, is it? Let us not forget that today is also a settlement day, and, based on what we saw on Tuesday, a weak trading day on Thursday would not be a surprise. Meanwhile, the 14 Day RSI closed at a still extremely overbought 76 while internally breadth was weak as shown by the McClellan Oscillator which closed at negative 84 last night. My ‘’Nothing Matters’’ continues as we patiently wait for the ‘’WHEN AND WHERE’’ that the S&P and NDX will make a meaningful top. The S&P has an ‘Open Gap’ from last week from 7257/7294. I will use any tag of the gap to close my 7097 average short position and reassess if triggered. With the S&P again closing over the top of its Daily Bollinger Band we should have at least a small retracement over the coming days. If this view changes I will be back with a new update for my Platinum Members.
EUR/USD
No Change: I am still flat as the Euro again traded in a narrow range again on Wednesday. I still believe that the Euro is overvalued. The Euro has short-term resistance from 1.1840/1.1920. I will leave my sell level unchanged with the same 1.2005 ‘Closing Stop’. Meanwhile, I will continue to be a buyer on any further dip lower to 1.1560/1.1640 while leaving my 1.1495 ‘Closing Stop’ unchanged. If I am taken short, I will have a T/P level at 1.1770. If I am taken long, I will have a T/P level at 1.1710.
Dollar Index
No Change: The Dollar has barely moved during the past two weeks unlike the equity and bond markets which is incredible considering that Japan’s Ministry of Finance spent an estimated $34.5 billion buying yen on April 30 after the currency breached 160 against the Dollar. It was the first intervention since July 2024. This is the central tension of Prime Minister Takaichi’s economic agenda. She wants cheap government borrowing to fund a defense and industrial buildup, a stable yen to protect household purchasing power, and growth. She cannot have all three. The tension is institutional as well as economic: Takaichi needs the Bank of Japan to keep Interest Rates low enough to fund her ambitions but the BOJ has been inching towards normalisation and the Finance Ministry worries more about the Yen weakening than Takaichi’s agenda progressing. I am still long from 10 days ago at a price of 98.30. I will add to this position at 97.50 while leaving my 96.95 ‘Closing Stop’ unchanged. I will leave my T/P level unchanged at 98.75. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
I am still flat. Today, I will continue to be a seller from 2880/2950 with the same 3005 ‘Closing Stop’. If I am taken short, I will have a T/P level at 2830. Given how overbought the Russell is trading I still do not want to be long the market at this time.
FTSE 100
My FTSE plan worked well as the market sold off to my 10245 buy level before rallying over 100 points. This move higher saw my revised 10288 T/P level triggered and I am now flat. Today, I will again be a buyer on any dip lower to 10180/10260 with a higher 10105 ‘Closing Stop’. If I am taken long, I will have a T/P level at 10330. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
My Dow plan worked well as the market sold off to my 49450-buy level before rallying 200 points. This move higher saw my revised 49570 T/P level triggered and I am now flat. The Dow has short-term support from 48750/49050 where I will again be a buyer with a lower 48595 ‘Closing Stop’. If I am taken long, I will have a T/P level at 49410.
Cash NASDAQ 100
My NDX plan worked well as shortly after I posted yesterday the NDX hit my sell range for a 29290 short position before selling off to my revised 19105 T/P level. Subsequently the NDX hit a low at 28955 before rallying over 500 points. This move higher saw the NDX hit my next sell level for a now 29390 average short position as emailed to my Platinum Members. I will have a T/P level on this position at 29130 while leaving my 29605 ‘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
Despite Wednesday’s much hotter than expected PPI print the Bund traded in a narrow range. I am still long from Tuesday at a price of 124.95 with a now lower 125.55 T/P level. I will add to this trade at 124.15 while leaving my 123.55 ‘Closing Stop’ 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. Today, I will not chase the price of Gold higher believing that we are not done with lower prices for now. Today, I will continue to be a buyer from 4450/4550 with the same 4325 ‘Closing Stop’. If I am taken long, I will have a T/P level at 4680. If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
Silver traded in a narrow range again on Wednesday and I am still flat. Today, I will leave my buy level unchanged at 73.50/76.50 with the same 70.15 ‘Closing Stop’. If I am taken long, I will have a T/P level at 79.75.
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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