U.S. Equity Markets closed mixed following a volatile trading session that saw plenty of two-way price action. August’s Consumer Price Index (“CPI”) was released yesterday afternoon rising 0.6% Month on Month as expected. However, the yearly rate rose to 3.7% up from last month’s 3.2% gain, largely due to volatile upward swings from energy and food costs. Looking at the Core CPI, which excludes food and energy costs, it came in as expected with an annual increase of 4.3%, down from the 4.7% reported in July. The Federal Reserve is closely monitoring the trends in core inflation, and a continued decline would likely allow the Fed to maintain its current interest rates. However, should there be a notable uptick in core inflation, it could prompt the Fed to consider raising interest rates further. The US Justice Department has accused Google (GOOG) of paying billions of dollars to device makers, wireless companies, and browser makers to secure a monopoly for its search engine. On the other hand, the tech giant has argued that high quality is to blame for the search engine’s popularity. Google also says the U.S. government was wrong to accuse the company of breaking antitrust laws to maintain its dominant position. The trial will determine if Google has violated antitrust laws regarding its paid search advertising management. If found guilty, the company could be forced to change its practices or divest assets. This case has huge implications for the tech industry, as it could shape future antitrust actions against other Big Tech companies. Despite boasting big names like Amazon (AMZN), Wayfair (W), and Target (TGT) among its clientele, Noble House Home Furnishings will liquify its assets. Net revenues in a three-year tailspin over the last three years forced the furniture company to close its doors. GigaCloud Technology (GCT) has agreed to purchase Noble House’s assets for $85 million, along with $4.1 million for equipment and select debts. The combination of declining sales and inflation that contributed to the collapse provides a glimpse of what could happen if consumer spending were to significantly drop. U.S inflation-adjusted household income suffered its steepest decline since 2010, falling by 2.3% in 2022. According to the U.S. Census Bureau, the median income for 2022 was $74,580, down from $76,330 in 2021. A double whammy of a rising cost of living and the end of pandemic-era financial-aid programs is to blame for the third consecutive annual decline. While the official poverty rate edged slightly lower than the previous year, it remained relatively unchanged. The results highlight the economic challenges faced by American families – and the eerily similar conditions of past recessions like the 2008 global financial crisis and the dot-com bubble. The U.S. government wants to get rid of a $13 billion pileup of mortgage bonds, after digging Silicon Valley Bank and Signature Bank out of trouble. BlackRock (BLK) has sold off much of this inherited portfolio but was unable to offload about $12.7 billion of bonds linked to project loans. Backing these bonds are long-term, low-rate loans – mainly for developers constructing affordable apartments – making them increasingly difficult to sell. The Federal Deposit Insurance Corporation (“FDIC”) is exploring options like cutting the bond prices or repackaging the debt into new securities. The complexity of these bonds emphasises how failed banks can create lingering problems for the government, even after new institutions take over. European Markets closed mixed. German investor sentiment improved unexpectedly in September, with the ZEW economic sentiment index rising to negative 11.4 points from negative 12.3 points in August. The surprise increase was partially attributed to respondents anticipating interest rates stabilising in the U.S. and Euro-Zone. However, the assessment of the current economic situation in Germany continued to worsen, with the indicator falling to -79.4 points, its lowest value in three years. This contrast highlights a slight improvement in expectations regarding Germany’s economic situation over the next six months. Elsewhere Oil reversed from a new high for 2023 by closing 0.3% lower while the boring action in Gold continues as the market again closed flat.
To mark my 2875th 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 169 points yesterday and is now ahead by 656 points for September, after finishing August with 1485 points gain 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 3164 points in February, 4687 points in January 2054 points in December, 4789 points in November and 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 0.12% higher at a price of 4467.
The Dow Jones Industrial Average closed 70 points lower for a 0.20% loss at a price of 34,575.
The NASDAQ 100 closed 0.38% higher at a price of 15,348.
The Stoxx Europe 600 Index closed 0.32% lower.
This morning, the MSCI Asia Pacific closed 0.4% higher.
This morning, the Nikkei closed 0.21% lower at a price of 32,706.
Currencies
The Bloomberg Dollar Spot Index closed 0.1% higher.
The Euro closed 0.2% lower at $1.0733.
The British Pound closed 0.1% lower at 124.85.
The Japanese Yen fell 0.1% closing at $147.21.
Bonds
Germany’s 10-year yield closed 1 basis points lower at 2.64%.
Britain’s 10-year yield closed 6 basis points lower at 4.36%.
U.S.10 Year Treasury closed 4 basis points lower at 4.24%.
Commodities
West Texas Intermediate crude closed 0.3% lower at $88.75 a barrel.
Gold closed 0.2% lower at $1909.10 an ounce.
This afternoon on the Economic Front we have the ECB rate announcement where there is still a 50% chance of a 10th consecutive rate hike. Next, we have the U.S. Weekly Jobless Claims, Retail Sales and the all-important PPI at 1.30 pm. This is followed by the Lagarde Press Conference at 1.45 pm. Finally, we have Business Inventories at 3.00 pm.
Cash S&P 500
Despite the core inflation printing 0.1% higher than expected the S&P closed higher yesterday. I have been outlining my view over recent days why there is no case to being short the S&P at this time. This view holds as yet again the S&P has bounce from the now critical 4440/4445 support level, trading at 4480 this morning. This is the third time that the S&P has bounced hard off this support level. We still have last week’s ‘’Open Gap’’ at 4496 to get through but a bounce and close over 4500 will catch a lot of short positions, forcing them to cover. Most traders are expecting a sell-off to develop over the next month as we hot the traditionally weakest period of the year. What if this proves wrong? Then the S&P could surprise aggressively to the upside with all-time highs a strong possibility. Frustratingly the S&P missed my 4442-buy level by three handles and I am still flat. I will now raise my buy level to 4449/4464 with a higher 4439 ‘’Closing Stop’’. I still have no interest in being short the S&P at this time.
EUR/USD
Frustratingly, the Euro missed my initial 1.0710 buy level by one point before having a nice 50-point rally. Ahead of the ECB announcement this afternoon I will not chase the Euro higher leaving my 1.0640/1.0710 buy level unchanged with the same 1.0585 ‘’Closing Stop’’. I no longer want to be short the Euro at this time.
September Dollar Index
I am still short the Dollar at 104.70. I will continue to look to add to this position at 105.30 with the same 105.85 ‘’Closing Stop’’. I will now raise my T/P level to 104.45 as I have this position too long. If any of the above levels are hit, I will be back with a new update for my Platinum Members
Cash DAX
My DAX plan worked well as the market sold off to my 15670-buy level before rallying to my revised 15714 T/P level as I wanted to be flat ahead of the U.S. CPI Report. The DAX continues to find support at its 200 Day Moving Average. It is a similar scenario with the FTSE, Hang Sang and Nikkei with all of these markets strong. In my view all these signal charts have plenty of room to the upside despite equity markets being in what is traditionally the weakest time of the year. Today, I will again be a buyer of the DAX on any dip lower to any dip lower to 15500/15580 with the same 15435 ‘’Closing Stop’’.
Cash FTSE
No Change. I will continue to be a seller on any further rally to 7580/7640 with the same 7705 ‘’Closing Stop’’.
Dow Rolling Contract
I am still flat the Dow as the market continues to struggle to break it 50 Day Moving Average. Given the fact we have the ECB Rate Announcement and U.S. PPI this afternoon, I will not chase the Dow higher, leaving my 34180/34430 buy level unchanged with the same 34055 tight ‘’Closing Stop’’.
Cash NASDAQ 100
My NDX plan worked well as the market traded lower to my 15220-buy level on the CPI print. Subsequently, we rallied to my 15300 revised T/P level as emailed to my Platinum Members and I am now flat. The NDX is trading higher at 15400 this morning. This is impressive given the Apple news and the aggressive sell-off in Oracle Shares. Remember a market that cannot sell-off on bad news has to be respected. Today, I will again be a buyer on any dip lower to 15170/15320 with a higher 15095 ‘’Closing Stop’’.
December BUND
My latest 130.35 long Bund position worked well as the market rose to my 130.80 T/P level this morning and I am now flat. Today, I will again be a buyer from 129.60/130.30 with the same 128.95 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 130.90.
Gold Rolling Contract
Gold continues to trade heavy, and I am still flat. I will continue to be an aggressive buyer on any further dip lower to 1881/1896 with the same 1869 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. I am still long at an average rate of 24.05. Silver is trading lower at 22.85 this morning. Buying the dip has worked almost every time in Silver over the past two years. However, just like Gold finding strong resistance from 1960/2000, Silver is seeing a lot of selling between 24.00 and 25.00. I will now lower my ‘’Closing Stop’’ to 21.95. If Silver drops from here, I will come back with a new level to add to my existing long position. I will now lower my T/P level to 24.25. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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