U.S. Indices ended Wednesday’s session with marginal gains, albeit with outperformance in the RUSSELL 2000, while geopolitics, Fed, and President Trump dominated the tape. The FOMC left rates unchanged, as expected, and left the 2025 dot plot unchanged, which saw stocks and Treasuries gain and the Dollar sell off. However, moves had started to pare as the hawkish composition of the 2025 dot plot was digested, while the 2026 and 2027 dots were revised up. Meanwhile, inflation projections were revised up, growth forecasts were revised down and unemployment forecasts were revised higher, likely to incorporate the expected impact of tariffs. The Committee said the uncertainty about the outlook has “diminished further but remains elevated”, a change from the prior “increased further”, and it also removed the line that “risks of higher unemployment and higher inflation have risen”. In Powell’s press conference, he largely echoed familiar remarks in that a patient and wait-and-see approach is appropriate, and that they would learn more over the summer to make smarter decisions, weighing on T-notes, stocks and supporting the Dollar. However, Trump managed to steal the limelight through the Fed and saw pronounced downside in the crude complex and upside in indices as he said he may meet with Iran, albeit anything can happen and no final decision has been made. Prior to this, oil was very choppy amid a deluge of Middle East updates – benchmarks saw peaks after Times of Israel said Defence Minister Katz said Israeli Air Force fighter jets just “destroyed the headquarters of the Iranian regime’s internal security, the main arm of the Iranian dictator’s oppression”, but then pared the gains, and much more, as President Trump was speaking with focus on lines that Iran wants to negotiate, nothing is too late and that Iran has reached out to the US. Elsewhere, sectors were largely in the red with only Tech, Utilities, and Real Estate in the green as Energy and Communications lagged. Treasuries in the end were largely flat, while the Dollar saw marginal gains – Antipodeans were the G10 outperformers, while Swiss Franc was the distinct laggard. US data saw Initial Jobless claims at 245k, in line with expectations, while housing data disappointed. In the US it is a market holiday on Thursday due to Juneteenth, while SNB, Norges, and Bank of England rate decisions are the highlights. The Federal Reserve left rates unchanged at 4.25-4.5%, as was widely expected, with the 2025 dot plot left unchanged at 3.9%, which signals 50bps of cuts this year, although the 2026 dot plot was revised higher to 3.6% from 3.4% and 2027 was revised up to 3.4% from 3.1%. However, there was some discourse over the number of cuts seen this year. Seven members see no cuts this year, versus four in March, while two see 25bps cuts, down from four in March, eight see 50bps (prev. nine), and two see 75bps of easing (unchanged from March). Highlighting the close proximity for the median dot, 9 members see FFR above median, 10 members see FFR at median or below. GDP forecasts were cut for both 2025 and 2026 to 1.4% (prev. 1.7%) and 1.6% (exp. 1.8%), respectively, while unemployment rate forecasts ticked higher across all time horizons ex. long-run. Headline and Core PCE inflation dots were also notably lifted with the 2025-end headline rate seen at 3.0% (prev. 2.7%) and 2026 at 2.4% (prev. 2.2%). In regard to the statement, the Committee said the uncertainty about the outlook has “diminished further but remains elevated”, a change from the prior “increased further”, and it also removed the stagflation warning line that “risks of higher unemployment and higher inflation have risen”. Stagflation risks remain given inflation forecasts were revised up, with growth forecasts revised down. Fed Chair Powell largely echoed familiar remarks in that a patient and wait-and-see approach is appropriate. He also told the usual line post SEPs that projections are subject to uncertainty, and are not a set plan. He recommended focusing on the near-term projections due to the difficulty of providing longer-term forecasts. Looking ahead, Fed Chair Powell said the time will come when they have more confidence, but he cannot say exactly when that will be. He stressed that as long as they have the kind of labour market they have, and inflation is coming down, the right thing to do is hold rates. Powell expects to learn a great deal more over the summer, adding they will make smarter decisions if they wait a “couple of months”. Powell noted inflation has been favourable over the last three months, but he expects to see more tariff impacts in the coming months and expects businesses to pass on costs to consumers, again stressing this is why the Fed need to be patient. Powell said they have to keep rates high to get inflation all the way down, and he described policy as “modestly restrictive”, noting it is not very restrictive. Powell in May said “policy is sort of modestly or moderately restrictive”. Building Permits fell by 2.0% to 1.393 million from 1.422 million, beneath the 1.428 million forecast. Housing Starts fell by 9.8% to 1.256 million from 1.392 million, beneath the 1.357 million forecast and even below the most pessimistic forecast of 1.3 million. Despite the big drop in Starts, analysts at Pantheon Macroeconomics highlight that the data is exceptionally volatile and thus take little signal from the report, with the drop mainly attributed to a 30% fall in multi-family starts, which will probably unwind over the next month or two. However, the desk highlights that Building Permits, which are less volatile, were also notably weak, hitting the lowest level since June 2020. Elsewhere, Gold again closed flat while Oil rose, closing Wednesday with a gain of 1.3%.
To mark my 3200th 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 80 points yesterday and is now ahead by 3205 points for June, 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 0.03% lower at a price of 5980.
The Dow Jones Industrial Average closed 44 points lower for a 0.1% loss at a price of 42,171.
The NASDAQ 100 closed 0.01% higher at a price of 21,720.
The Stoxx Europe 600 Index closed 0.34% lower.
This Morning, the MSCI Asia Pacific closed 0.5% lower.
This Morning, the Nikkei closed 0.88% lower at a price of 38,544.
Currencies
The Bloomberg Dollar Spot Index closed 0.08% higher.
The Euro closed 0.1% lower at $1.1468.
The British Pound closed 0.2% lower at $1.3404.
The Japanese Yen fell 0.11% closing at $145.25.
Bonds
U.K.’s 10-Year Gilt closed 7 basis points lower at 4.49%.
Germany’s 10-Year Bund Yield closed 4 basis points lower at 2.50%
U.S.10 Year Treasury closed 1 basis points lower at 4.39%.
Commodities
West Texas Intermediate crude closed 1.3% higher at $74.97 a barrel.
Gold closed 0.05% higher at $3389.10 an ounce.
This morning on the Economic Front we have a speech from ECB President Lagarde at 8.30 am followed by Euro-Zone Construction Output at 10.00 am. With U.S. Markets closed today, the only other data of note is the Bank of England Rate Announcement at 12.00 pm.
Cash S&P 500
The S&P 500 finished the day flat, surrendering earlier gains ahead of the Federal Open Market Committee (FOMC) rate decision. Yesterday, I mentioned that an ideal scenario would have been a drop in the S&P 500 below 5,965. While we did not achieve that today, we are below this key level as I go to post, trading at a price of 5958. Friday now becomes pivotal, especially given option expiration and the current index positioning. Notably, we also closed below the 10-day EMA for the third time in four days. It is worth noting that once we move past Friday, support levels due to gamma positioning in the S&P 500 will drop toward 5,905, coinciding with the JPM Collar’s position. Given this alignment, that area could act as a magnet for the index next week. The Fed did not announce any headline-grabbing changes yesterday. Still, beneath the surface, they downgraded their growth forecast, raised expectations for inflation and unemployment in 2025, and reduced anticipated rate cuts for 2026 and 2027. More critically, considering forecasts from both the market and the Fed, it seems increasingly clear—barring an economic crisis—that the era of 0% interest rates has ended, pointing toward structurally higher rates on the long end of the yield curve. The 30-year Treasury rate ended the day essentially unchanged, but notably, it moved from around 4.86-4.87% before the Fed announcement to close at approximately 4.89-4.90%. Given the Fed’s projection of a 3% long-term overnight rate, it is puzzling why the 30-year rate trades just 55 basis points above the 3-month Treasury bill. This narrow spread seems unusual and implies that long-term yields likely need to move significantly higher. Nonetheless, it is worth noting that today we saw a significant jump in 1-year and 2-year inflation swap rates, with the 1-year spiking to 3.55% and the 2-year rising sharply to 3.19%. Interestingly, this increase did not extend to the 5-year inflation swap. I am uncertain if the market is anticipating a sudden spike in oil prices or something else entirely, but it certainly stands out as unusual. Oil did not see significant movement over the past 24 hours, but if the U.S. becomes actively involved in the Middle East conflict, we could see a sharp spike in oil prices, which would drive inflation expectations higher. Additionally, upcoming announcements regarding tariff rates could also push inflation expectations upward. Therefore, either Wednesday’s inflation swap data is anomalous, or the market may be anticipating news that is not yet public. I am still flat the S&P. I will now lower my sell level to 6020/6040 with a lower 6063 ‘Closing Stop’. As I am now long the NDX, I will lower my S&P buy level to 5902/5922 with a lower 5887 ‘Closing Stop’. If I am taken short, I will have a T/P level at 5998. If I am taken long, I will have a T/P level at 5946. If any of these views change, I will be back with a new update for my Platinum Members.
EUR/USD
This morning the Euro traded lower to my 1.1450 T/P level on my latest 1.1530 average long position and I am now flat. It looks increasingly likely to me that the Euro has registered a Double Top at Monday’s 1.1620 high print. As long as we do not break above 1.1620 I expect the Euro to test its 1.1200 now key support level. Today, I will again be a seller from 1.1510/1.1600 with a higher 1.1665 ‘Closing Stop’. If I am taken short, I will have a T/P level at 1.1430.
Dollar Index
The Dollar just missed yesterday’s buy range and I am still flat. Today, I will raise my buy level to 98.00/98.70 with a higher 97.35 ‘Closing Stop’. If I am taken long, I will have a T/P level at 99.50.
Russell 2000
No Change”. The Russell has short-term support from 2010/2080 where I will continue to be a buyer with the same 1965 ‘Closing Stop’. I no longer want to be short the market at this time. If I am taken long, I will have a T/P level at 2130.
FTSE 100
The FTSE continues to trade sideways close to all-time highs and I am still flat. Today, I will lower my sell level to 8870/8950 with a lower 9035 wider ‘Closing Stop’. If I am taken short, I will have a T/P level at 8815.
Dow Rolling Contract
I am still flat the Dow as the market fell shy of Wednesday’s buy range. I do not like the price action in the Dow as the market continues to make lower rebound highs. I will now lower my Dow buy level to 41600/41850 with a lower 41395 ‘Closing Stop’. If I am taken long, I will have a T/P level at 42070. Despite how heavy the Dow is trading I still do not want to be a seller of the market at this time.
Cash NASDAQ 100
Overnight the NDX traded lower to my 21570-buy level. I am still long with a lower 21690 T/P level. I will continue to look to add to this position on any further move lower to 21420 while leaving my 21255 ‘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
The boring sideways price action for the Bund continues and I am still flat. Today, I will raise my buy level to 129.50/130.30 with a higher 128.36 ‘Closing Stop’. If I am taken long, I will have a T/P level at 130.95. I still do not want to be short the Bund at this time. If this view changes, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
No Change: There is no doubt that Gold is expensive. Any geopolitical situation sees investors pile into Gold. I have no interest in buying the Gold market at these levels and will use any rallies from here to go short. Gold has short-term resistance from 3470/3490. I will lower my sell level to this area with a lower 3511 ‘Closing Stop’. If triggered, I will have a T/P level at 3448.
Silver Rolling Contract
This morning Silver hit my 36.30 buy level. I am still long and I will add to this position on any further move lower to 35.30 while leaving my 33.95 ‘Closing Stop’ unchanged. I will now lower my T/P level to 37.10. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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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