Federal Reserve Chairman Jerome Powell stuck to his view that interest rates are probably on hold after three straight reductions, while signalling that the U.S. central bank could resume cutting if the growth outlook falters. “We see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook,” Powell told the congressional Joint Economic Committee Wednesday in Washington. “However, noteworthy risks to this outlook remain.” Powell, whose comments largely echoed his message on Oct. 30 after the Fed’s third rate cut this year, said slowing global growth and trade developments pose “ongoing risks.” He added that persistently low inflation could lead to an “unwelcome” slide in the public’s longer-run expectations of inflation. Powell said the Federal Open Market Committee cut the policy rate, which is now in a range of 1.5% to 1.75%, to support growth and move inflation back to the 2% target. He said the committee was prepared to respond to a “material reassessment” of its outlook, and the tone of his remarks suggest that downside risks for now outweigh the possibility of economic overheating. Explaining why wages haven’t moved up with the unemployment rate at 3.6%, Powell said it could be a sign that there is still slack in the labour market. “It also may be that the neutral rate of interest is lower than we have been thinking and that therefore our policy is less accommodative than we have been thinking. We are letting the data speak to us.” The S&P 500 closed flat below all-time highs. A report said farm purchases have become another of several issues in negotiations between the world’s two largest economies. The 10-year Treasury yield fell the most in more than a week. Traders will continue to monitor developments in Hong Kong after the latest unrest.
To mark my 1950th 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 was flat yesterday as none of my calls were hit yesterday and is still ahead by 292 points for November, having made 1649 points in October, 1620 points in September, 2387 points in August, 1153 points in July, 1346 points in June,1722 points in May, 955 points in April and 1027 points in March. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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Equities
The prospect of a trade deal has become key to sustaining a rally that drove American stocks to records, with Federal Reserve Chairman Jerome Powell signalling further rate cuts are unlikely for now. The U.S. and China have yet to announce a new location or time to seal the agreement after an international gathering in Chile was cancelled, and it’s unclear whether Trump’s renewed threats will move things forward. The Dow Jones Industrial Average reached a record as Walt Disney Co. surged following the debut of its streaming service.
The S&P closed basically unchanged at a price of 3094.
The Dow Jones Industrial Average closed 93 points higher at 27,784.
The Stoxx Europe 600 Index closed flat.
Currencies
Here is a summary of the main Changes in F.X. Markets:
The Japanese Yen rose 0.2% to close at 108.80 per dollar.
The offshore Yuan held at 7.0294 per dollar.
The Bloomberg Dollar Spot Index was little changed.
The Euro also closed unchanged at $1.1007.
Bonds
The yield on 10-year Treasuries sank about five basis points to 1.89%.
Germany’s 10-Year Yield fell four basis points to close at -0.29%.
Commodities
West Texas Intermediate crude rose 0.4% to $57.34 a barrel.
Gold gained 0.2% to $1,464.19 an ounce.
This morning on the Economic Front we have German GDP at 7.00 am and this is followed at 9.30 am by UK Retail Sales. At 10.00 am we have Euro-Zone GDP and the latest Unemployment Change. This is followed at 1.30 pm by U.S. PPI and the Weekly Jobless Claims. Finally, at 3.00 pm we have Fed Chair Powell’s Testimony to Senate. Speaking wise it is a busy day with the ECB’s De Guindos and Lane speaking this morning at 10.30 am and 11.00 am respectively, while this afternoon we have Fed Members Evans, Clarida and Bullard all speaking at 2.10 pm, 2.15 pm and 4.20 pm respectively.
December S&P 500
The S&P again just missed my buy level before rallying over 20 Handles off its 3075 low print into to close and I am still flat. The 5-day CBOE Put/ Call ratio declined to 0.772 yesterday, which is the lowest level since the January 2018 high. As discussed at length over the past two weeks, Large Speculators are record-net short VIX Futures, betting to a historic degree that volatility will remain low for the foreseeable future. Incredibly the McClellan Oscillator closed lower again last night at -66. This is a dangerous scenario as in my opinion any good news on a Trade Agreement is now fully priced in. Today I will leave my 3105/3120 sell level unchanged with the same 3129 stop. I will now raise my buy level slightly to 3066/3076 with a higher 3059 stop.
EUR/USD
No Change as I am still a buyer on any dip lower to 1.0920/1.0965 with the same 1.0880 stop. I will also leave my 1.1090/1.1130 sell level unchanged with a tight 1.1165 stop.
December Dollar Index
The sideways boring action in the Dollar continues and I am still flat. My only interest in selling Dollar is still on a rally higher to 98.45/98.85 with a 99.15 stop.
December DAX
Despite the weaker Euro the DAX is struggling to make new highs. I am still flat and today I will continue to be a small seller on any rally higher to 13350/13410 with the same 13455 tight stop.
December FTSE
Unfortunately the FTSE just missed my 7260 buy level before spending the rest of the session trading sideways to higher and I am still flat. I will now raise my buy level to 7230/7270 with a 7195 stop.
Dow Rolling Contract
The Dow closed at a new all-time high yesterday helped by Disney shares. This is still a dangerous market in my opinion which too much hype in a successful outcome to the trade talks. Today I will leave my 27860/28010 sell level unchanged with the same 28105 stop.
December NASDSAQ
I am still flat the NASDAQ as I continue to be a small seller on any further rally to 8320/8370 with the same 8415 stop.
December BUND
The rally off Tuesday’s 169.26 low print continued yesterday with the market closing at 170.30 yesterday. I am reluctant to chase the Bund higher and today I will only raise my buy level to 169.30/169.70 with a 168.90 higher stop.
Gold Rolling Contract
Gold has had a nice bounce off Tuesday’s 1446 low print I am still flat as the market look to test the key 1480/1490 resistance area. I will be a small seller in this area with a tight 1497 stop.
Silver Rolling Contract
I am still flat Silver and today I will now raise my buy level to 16.20/16.60 with a higher 15.90 stop. If I am taken long I will have a T/P level at 16.82.
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