U.S. Indices predominantly closed lower on Wednesday with heavy-cap tech stocks plummeting, leading indices lower, with the NASDAQ underperforming, while the Russell and Equal Weight S&P closed green. Sectors were mixed with outperformance in Energy, Consumer Staples and Real Estate, while Consumer Discretionary, tech and Communications lagged. Energy stocks had outperformed, tracking crude prices higher throughout the majority of the day, seeing benchmarks settle well in the green. However, futures wiped out any gains post-settlement as President Trump said he was informed by an Iranian source that they will stop killings and there are no plans for execution, which largely reduces the probability of a US attack on Iran. The news also hit gold prices (remains well in the green) and helped lift Equity Indices into the closing bell, given several reports throughout the day suggested Trump could attack Iran within 24 hours, albeit these fears have now been quelled. In FX, the Dollar lagged while the Japanese Yen outperformed. The Yen was buoyed by jawboning from officials, but also on reports that the opposition parties – CDP and Komeito- have started talks on forming a new party. A new coalition will likely make it harder for Takaichi to secure a majority in the snap election, thus less chance of her passing through more expansive fiscal policy measures. Elsewhere, US data saw hot-leaning PPI reports for October and November, albeit the monthly figures were more encouraging, while Retail Sales were generally stronger than expected. The data had little market reaction, with focus today on geopolitical developments. The US and Denmark also spoke, but Denmark was not able to sway the US’s view on Greenland. Regarding the tech weakness, losses were broad-based throughout the sector, particularly within the heavyweights. China reportedly told customs agents that NVIDIA’s (H200) AI chips are not allowed to enter the country, although it was not clear whether it was a formal ban or a temporary measure. Meanwhile, the Information reported that TSMC (TSM) has not been able to supply customers like NVDA and Broadcom (AVGO) with the chips they need fast enough. The BLS released the October and November PPI yesterday. The October PPI rose 0.1% M/M before rising 0.2% M/M in November, while the Y/Y October print rose 2.8%, with November rising 3.0%. The core metrics for November saw no change M/M after a 0.3% gain in October but rose 3.0% Y/Y in November. Generally, both reports leaned hotter-than-expected, though some monthly figures were encouraging. Within the report, the PCE components generally leant softer than October’s, with Portfolio Management cooling to 1.44% from 3.75% with Passenger Airline Services declining 0.25%, versus the prior -0.06%. Home Health and Hospital outpatient care accelerated slightly, but inpatient care and nursing home care eased. Following the data, analysts at Pantheon Macroeconomics expect the core PCE deflator rose 0.25% in October and 0.19% in November, followed by a 0.37% increase in December – albeit the December forecast is based just on CPI data for now and is subject to revisions. US retail sales for November were stronger than expected, with the headline rising 0.6% (exp. 0.4%, prev. 0%), with Y/Y lifting 3.3% (exp. 3.0%, prev. 3.5%). Ex autos and ex gas/autos also surpassed expectations, coming in at 0.5% (exp. 0.4%, prev. 0.4%) and 0.4% (exp. 0.1%, prev. 0.5%), respectively. Retail control was as anticipated 0.4%, dipping from 0.8%. The strong gain in retail sales supported Oxford Economics forecast that this holiday season was a solid one for retailers, with the volume of holiday retail sales rising by the strongest since 2021. However, the consultancy adds that it rests on narrow foundations as spending is driven by high-income households spending part of their recent wealth gains. Looking ahead, OxEco suggests the data is consistent with its forecast for overall consumer spending to expand by close to 2% annualised in Q4, a slowdown driven mostly by the expiry of the EV tax credit that hit auto sales hard earlier in the quarter. One of the areas of weakness in the retail sales report is the housing-related categories, and while Oxford expect some recovery in housing demand this year, it is a sector of the economy that will continue to lag. Fed Member Paulson said that modest rate cuts are likely appropriate later this year if forecasts are met. She expects inflation to be around 2% by year-end, alongside growth of around 2%. She noted the job market is bending, but not breaking, while the baseline economic outlook is pretty benign. She is cautiously optimistic about inflation moving back to target and is seeking greater clarity this year on what is driving the jobs market. Meanwhile, Kashkari Speaking to the New York Times, noted the Trump administration actions against the Fed are “really about monetary policy”, and Powell explained that accurately. On Monetary Policy, Kashkari does not see any impetus for a rate cut in January, and with rates between 3.5-3.75%, that puts the Fed in a “pretty good spot right now”. The 2026 voter added that there could still be some scope to cut later in the year, but right now, it is “just way too soon”. The Minneapolis Fed President spoke again later, and noted the economy is confusing and the job market is showing signs of weakness, and inflation is still too high but moving in the right way. Back on monetary policy, he wonders how tight it actually is and added that the job and inflation goals are in tension. Lastly, on the employment side of things, Kashkari is not sure what the current breakeven rate is for the job market. Finally, Governor Miran reiterated his calls for rate cuts. Noting, deregulation should reduce pressure on prices, reiterating the need for 150 basis points of cuts this year. He noted inflation is coming down, and that “other stuff is just noise”. Elsewhere, Oil closed lower by 0.66% while Gold closed above $4600 with a 0.35% gain.
To mark my 3300th 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 lost 75 points yesterday and is now ahead by 2057 points for January 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 0.53% lower at a price of 6926.
The Dow Jones Industrial Average closed 42 points lower for a 0.09% loss at a price of 49,149.
The NASDAQ 100 closed 1.07% lower at a price of 25,465.
The Stoxx Europe 600 Index closed 0.18% higher.
This Morning, the MSCI Asia Pacific closed 0.3% higher.
This Morning, the Nikkei closed 0.42% lower at a price of 54,110.
Currencies
The Bloomberg Dollar Spot Index closed 0.05% lower.
The Euro closed 0.04% lower at $1.1640.
The British Pound closed 0.03% lower at $1.3427.
The Japanese Yen rose 0.49% closing at $158.34
Bonds
U.K.’s 10-Year Gilt closed 6 basis points lower at 4.34%.
Germany’s 10-Year Bund Yield closed 1 basis points lower at 2.80%
U.S.10 Year Treasury closed 4 basis points lower at 4.13%.
Commodities
West Texas Intermediate crude closed 0.88% lower at $60.61 a barrel.
Gold closed 0.33% higher at $4625.10 an ounce.
This morning on the Economic Front we already had the release of U.K. November GDP which rose 0.3% versus +0.1 m/m expected. Also released was the German Wholesale Price Index which fell 0.2% versus +0.1% expected. Next, we have the ECB Economic Bulletin at 9.00 am. This is followed by the Minutes from last month’s ECB Meeting at 12.30 pm. At 1.30 pm we have U.S. Weekly Jobless Claims, Philly Fed Manufacturing Index, Import/Export Price Index and the New York Empire State Manufacturing Index. Finally, at 2.45 pm we have Manufacturing PMI. Meanwhile, Fed Members Bostic, Barr, Barkin and Schmid are speaking at 1.35 pm, 2.15 pm, 5.40 pm and 6.30 pm respectively.
Cash S&P 500
The S&P 500 closed Wednesday lower by 0.53%, which was better than the intraday low when it was down by more than 1%. More importantly, the index closed below the wedge trendline. Perhaps this means nothing, and the index gaps higher today and reclaims the trend. Or perhaps this marks the beginning of a sharper decline. Based on the pattern, it appears that the S&P 500 could initially return to 6,550; what happens thereafter remains to be seen. I will note that the S&P 500 has had numerous opportunities to break out and move higher but has been unable to do so. The index is essentially unchanged since the end of October, whether one likes it or not. It is really the same for the NASDAQ, and if the index has finally broken the diamond pattern, then we should be on a path that undercuts the November low. In the end, this is an index that is still below its October highs, not the definition of a “melt-up”, that is for sure. As noted previously, the setup in today’s market looks very similar to that seen at the start of 2022 and 2025. At least to me it does. Equity financing costs are telling the same story today as they did in 2022 and 2025. Unfortunately, when we look at the CDS of Oracle and Meta, they appear to be spreads that are likely to widen after a few weeks of consolidation. If credit spreads on these stocks begin to rise due to AI Capex, it will not be a positive development for the overall market. The S&P never came close to Wednesday’s sell range, hitting an afternoon low at 6885 before recovering half of these losses into the close. This rally has continued overnight with the S&P trading at a price of 6935 as I go to press. Today, I will lower my sell level to 6960/6985 with a 7011 ‘Closing Stop’ which is just above Tuesday’s 6998 all-time high. If I am taken short, I will have a T/P level at 6938. Until we get a meaningful correction I have no interest in buying the S&P at this time.
EUR/USD
I am still flat the Euro. Today, I will lower my sell level to 1.1690/1.1760 with a lower 1.1825 ‘Closing Stop’. If I am taken short, I will have a T/P level at 1.1630.
Dollar Index
The Dollar closed unchanged at 99.25 yesterday and I am still flat. Ahead of PPI I will not chase the market higher as I continue to be a buyer from 97.80/98.60 with the same 97.15 ‘Closing Stop’. If I am taken long, I will have a T/P level at 99.10.
Russell 2000
Wrong! The Russell rallied to new all-time highs on Wednesday. This rally saw my 2655 ‘Closing Stop’ triggered on my 2580 latest short position and I am now flat. This morning, the Russell is trading unchanged at 2655. We have short-term resistance from 2700/2760 where I will again be a seller with a 2805 ‘Closing Stop’. If I am taken short, I will have a T/P level at 2650. Given how overbought the Russell is trading at this time, I have no interest in being long the market.
FTSE 100
The FTSE rallied to my second sell level at 10200 for a now 10165 average short position. I am as surprised as anyone why the FTSE continues to make new highs almost every session so far this year. Today, I will raise my T/P level to 10130 and stand aside if triggered. Meanwhile, I will leave my 10305 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
I am still flat. I have no interest in chasing the Dow lower as I continue to be a seller from 49450/49750 with the same 49905 tight ‘Closing Stop’. If I am taken short, I will have a T/P level at 49220. I still do not want to be long the Dow at this time.
Cash NASDAQ 100
I am still flat. Today, I will continue to be a seller on any further rally to 25740/25940 with the same 26105 ‘Closing Stop’. If I am taken short, I will have a T/P level at 25590.
December BUND
I am still flat as the Bund continues to trade in very narrow ranges. Despite the higher PPI print on Wednesday the Bund followed Treasury prices higher. Remember a market that cannot sell-off on bad news has to be respected. Therefore, I will now raise my Bund buy level to 127.10/127.80 with a higher 126.55 ‘Closing Stop’. If I am taken long, I will have a T/P level at 128.40. I still do not want to be short the Bund at this time.
Gold Rolling Contract
No Change: I am still flat Gold and I am going to stay flat as I still have no edge at these price levels. If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
Silver tagged on a further 6% on Tuesday, closing above $92 as this relentless rally continues. I am leaving the rest of my commentary unchanged as it looks like the information I have on the short positions from banks is enormous and forcing them to exit some of these positions forcing the price of Silver higher: Big banks have been selling Silver for the past 20 years which is the main reason that Gold has been outperforming Silver over the past number of years. But as we have seen over the past 10 months this is now changing. Allegedly both BAC and Citibank have a combined short position in Silver of about 4.4 billion ounces. If this is true, the shorts cannot find such a huge amount of silver anywhere to cover their shorts and therefore short sellers have to settle in cash. At $100 per oz, that would come out to a $440 billion short position. However, with shorts having to close out their massive positions analysts could see silver prices trade above $300/$400 per oz. This is scary and probably justifies the enormous rally in Silver since October. I am going to stay flat Silver for now and wait for a meaningful correction first to get long again. TBD.
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.
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