U.S. Indexes added to recent gains despite early weakness following the government shutdown. Outperformance was in the NASDAQ 100 while sectors were more mixed. Health Care was the clear laggard as the sector continues to benefit from President Trump’s clarification on the sector, with the latest agreement with Pfizer (PFE) showing the administration is not going to be as aggressive against pharmaceutical companies as initially thought, particularly after Trump’s triple-digit tariff threat. On the flip side, materials underperformed with weakness in some chemical names like LYB and FMC, weighing. T-notes bull steepened in response to the soft ADP data, which bolstered Fed rate cut bets with markets now fully pricing in a 25bp rate cut in October. Upside was also seen ahead of the data on the government shutdown, which supported havens in general, particularly the Japanese Yen and Gold, albeit gold prices fell off its best levels on likely profit taking, with the data having little impact on the yellow metal. Elsewhere, the ISM Manufacturing PMI was largely in line with expectations, remaining in contractionary territory, but internals were more mixed. In FX, the Dollar Index was lower while the Yen outperformed, but the Swiss Franc lagged. Crude prices were lower, likely weighed on by Saudi Aramco’s surprise LPG price cut, which could help bolster its sales amid increasing competition. Note, on Thursday, the weekly jobless claims data will not be released due to the government shutdown. Attention will turn to speeches from the Bank of Japan’s Governor Ueda overnight, Treasury Secretary Bessent this afternoon, and Fed’s Logan later on. The ADP Private Payrolls report, which has extra focus this month due to the government shutdown, was overall very weak. Private employers cut 32k jobs in September, well below the consensus of +50k and the most pessimistic forecast of +23k, while the prior was revised down to -3k from +54k. It also announced it conducted its annual preliminary rebenchmarking of the report in September based on the FY 24 QCEW results, which led to a reduction of 43k jobs in September versus the pre-benchmarked data. On wages, the median change in annual pay for job stayers rose to 4.5% from 4.4%, while for job changers it fell to 6.6% from 7.1%. ADP’s Richardson says that “Despite the strong economic growth we saw in the second quarter, this month’s release further validates what we’ve been seeing in the labor market, that U.S. employers have been cautious with hiring.” The headline ISM Manufacturing PMI rose to 49.1 from 48.7, a touch above the 49.0 forecast, but remained in contractionary territory for the seventh consecutive month. Within the report, New Orders fell to 48.9 from 51.4, while the Backlog of Orders Index rose to 46.2 from 44.7. The Supplier Deliveries index rose to 52.6 from 51.3, indicating slower deliveries than in August. The Prices Paid component eased to 61.9 from 63.7, beneath the 63.2 forecast. Oxford Economics highlights that this may suggest the peak impact from tariffs on prices may have passed, but sectoral tariffs could send this higher again. Employment rose to 45.3 from 43.8. Summarising the report, ISM’s Spence says, “In September, U.S. manufacturing activity contracted at a slightly slower rate, with production growth the biggest factor in the 0.4-percentage point gain of the Manufacturing PMI”. However, the combined drops in the New Orders and Inventories indexes (4.2 points) exceeded the increase in the Production Index (3.2), rendering the Manufacturing PMI improvement negligible. Last month’s increase in new orders seems to have flowed through to production but does not appear to be sustainable given the subsequent drop in new orders in September. On tariffs, some respondents said that profits are down and tariffs are being shouldered by all companies in their space (transportation and equipment). A respondent in the chemical products business said tariffs are still causing issues with imported goods into the US, not only on cost concerns but also on documentation issues. A respondent in miscellaneous manufacturing said that “Steel tariffs are killing us.” Overall, Oxford Economics writes that lower interest rates, reduced political uncertainty and a fiscal boost from the One Big Beautiful Bill will take time to filter through the manufacturing sector. Fed Member Logan reiterated her known hawkish stance, saying that the Fed will be cautious in any further reductions. The Dallas Fed President said financial conditions are a tailwind now, and this is evidence that policy is only modestly restrictive. She added that it is not clear how much further the Fed can cut before hitting neutral. The Dallas Fed President said the US may need further labour market slack to reach the inflation target of 2%. On inflation, said expectations cannot be taken for granted, and excluding tariff impacts, inflation may be as high as 2.4%, driven by non-housing services. Elsewhere, Oil closed lower by 0.66% while Gold was flat after a volatile session that witnessed plenty of two-way volatility.
To mark my 3250th 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 490 points yesterday on the first trading session of October after closing September with a gain of 3774 points after 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 0.34% higher at a price of 6711.
The Dow Jones Industrial Average closed 43 points higher for a 0.09% gain at a price of 46,441.
The NASDAQ 100 closed 0.49% higher at a price of 24,800.
The Stoxx Europe 600 Index closed 1.21% higher
This Morning, the MSCI Asia Pacific closed 0.6% higher.
This morning, the Nikkei closed 1.13% higher at a price of 45,055.
Currencies
The Bloomberg Dollar Spot Index closed 0.03% lower.
The Euro closed 0.04% lower at $1.1727.
The British Pound closed 0.23% higher at $1.3475.
The Japanese Yen fell 0.49% closing at $147.13
Bonds
U.K.’s 10-Year Gilt closed 1 basis points lower at 4.69%.
Germany’s 10-Year Bund Yield closed 1 basis points higher at 2.71%
U.S.10 Year Treasury closed 3 basis points lower at 4.10%.
Commodities
West Texas Intermediate crude closed 0.66% lower at $61.96 a barrel.
Gold closed 0.17% higher at $3864.10 an ounce.
This morning on the Economic Front we have Euro-Zone Unemployment at 10.00 am. Due to the Government shutdown there will be no U.S. data released until further notice. Meanwhile, Treasury Secretary Bessent will speak this afternoon.
Cash S&P 500
This is the most extensive and concentrated market in history. The recent ramp has been caused by one stock – NVIDIA – which has made a new all-time closing high for a now whopping $4.5 trillion Market Cap valuation. This is just insane and my sense is the price action has been so persistent that the buy the dip is now the ‘’NEW NORMAL’’ as written by Bank of America this week. I am extremely skeptical as these valuations are as dangerous as hell with all these companies shuffling Capex into each other with a clear circular business model that just smells shady in my opinion. Nvidia is now a $4.5 trillion company with a 27 PRICE TO SALES RATIO. I remember the days when 2-3 used to be expensive. This is madness and the amount of things that can go wrong on this is staggering. Positive seasonality is with us this week before buybacks are completely out and earnings take over. While it seems that I am one of the few people looking for a correction I just want to remind you that sizeable tops can occur in October. 2018 peaked on October 3 while the 2007 peak was on October 11. While it may be irrelevant this year I just to remind everyone who is buying against this backdrop that they can be playing with fire. As long as the S&P continues to trade outside the top of its Monthly and Quarterly Bollinger Band I will not be a buyer. Yesterday we saw 1-month realised volatility fall to 6.2%, which is fairly low on a historical basis. It may go lower still, but it is important to note that the last times it reached similar levels were in July 2024, November 2019, April 2019, October 2018, and October 2017. Each of those periods of low volatility was followed by a surge in volatility. Another interesting point is that Meta has not participated at all in the recent move higher in the index. Maybe the market is tired of all the AI spending the company has done—I don’t know—but it is something to watch, as Meta also has a history of peaking before the S&P 500. Yesterday’s rebound to new all-time highs saw the S&P trade the whole of my sell range for a now 6696 average short position with a now higher 6731 ‘Closing Stop’. I will raise my T/P level to 6681. If any of the above levels are hit, I will be back with a new update for my Platinum Member.
EUR/USD
I am still short the Euro at a price of 1.1750 with the same 1.1690 T/P level. I will continue to look to add to this position at 1.1830 with the same 1.1915 ‘Closing Stop’. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
I am still long the Dollar at a price of 97.70 from Tuesday. I will continue to look to add to this position at 97.00 with the same 96.35 ‘Closing Stop’. I will now lower my T/P level to 98.20. 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. I will continue to be a seller on any further rally to 2465/2525 with the same 2575 ‘Closing Stop’. If I am taken short, I will have a T/P level at 2420.
FTSE 100
Wrong! I was stopped out of my latest 9325 average short FTSE position at 9425 and I am now flat. Wednesday’s latest move higher saw the FTSE close at yet another new all-time-high which in my opinion is mind boggling given the economic and political backdrop. However, a market that cannot fall on bad news has to be respected and which I am finding it hard to fathom. The FTSE has further resistance from 9510/9580 where I will again be a seller with a higher 9651 ‘Closing Stop’. If I am taken short, I will have a T/P level at 9430. I still do not want to be long the FTSE at this time. If this view changes, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
The Dow just missed Wednesday’s initial sell range by 11 points before falling 300 points and I am still flat. Subsequently, the Dow had a small rally into the close. Today, I will raise my sell level to 46700/46950 with a higher 47205 ‘Closing Stop’. If I am taken short, I will have a T/P level at 46420. The Dow has short-term support below from 45550/45800 where I will be a small buyer with a 45395 tight ‘Closing Stop’. If I am taken long, I will have a T/P level at 46040.
Cash NASDAQ 100
The NDX rallied the whole of Wednesday’s sell range for a now 24700 average short position. I will now raise my T/P level to 24570 while leaving my 24905 ‘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 Bund again traded in a narrow range on Wednesday, and I am still flat. Today, I will continue to be a buyer on any dip lower to 127.90/128.70 with the same 127.15 ‘Closing Stop’. If I am taken long, I will have a T/P level at 129.30.
Gold Rolling Contract
My Gold plan worked well with the market trading higher to my 3892 sell level before selling off to my 3860 T/P level and I am now flat. Given how overbought Gold is trading, I will continue to be a seller of rallies. Gold has further resistance from 3910/3930 where I will be a small seller with a higher 3951 ‘Closing Stop’. If I am taken short, I will have a T/P level at 3885. I still do not want to be long Gold at this time.
Silver Rolling Contract
I am still flat. Today, I will not chase the price of Silver higher as I continue to be a buyer on any dip lower to 44.00/45.00 with the same 42.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 46.20.
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