U.S. Indices were firmer on Wednesday and rose to highs in wake of the latest FOMC rate decision, accompanying SEP’s and Chair Powell’s press conference, but closed off highs. Recapping, the Fed left rates unchanged at 4.25-4.5%, as expected, with dot plots unchanged, growth forecasts cut, and 2025 unemployment and inflation projections raised. The Fed also announced it will slow the pace of the balance sheet runoff. The decision on rates was unanimous, although there was one dissent from Governor Waller, who supported no change to the balance sheet runoff. In the press conference, Powell largely stressed a wait-and-see approach and that they are not in a hurry to cut rates, even when quizzed about cutting in May, as he stressed several times there is a lot of uncertainty ahead, and to bear that in mind when digesting Fed forecasts. Treasuries saw upside, while the Dollar weakened, albeit DXY still gained on the day, with the Japanese Yen the major beneficiary amid yield differentials, and as such the only G10 FX firming against the Dollar. Away from the Fed, attention continues to reside around US/Ukraine/Russia updates, as Trump and Zelensky spoke yesterda with Trump stating they had a very good call. The crude complex saw gains, but did settle off highs as participants continue to digest geopolitical events. Spot gold firmed and briefly breached USD 3,050/oz to the upside. For the record, sectors were exclusively in positive territory with Consumer Discretionary sitting atop of the pile, with TSLA (+5%) supporting the sector. Consumer Staples and Health are the relative laggards, and flat. Ahead, Super Thursday is on the docket with PBoC LPR, SNB, Riksbank, and BoE rate decisions, in addition to ECB President Lagarde, BoC Governor Macklem, US Initial Jobless Claims, Philly Fed, as well as NKE, FDX and MU earnings. The Federal Reserve left rates on hold as was widely expected, while the median Fed dot plots were left unchanged throughout the forecast horizon, still seeing two further cuts in 2025. The Fed removed language about risks to its goals being roughly in balance and noted that uncertainty about the economic outlook has increased. January’s statement read, “The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance”, although Powell later signalled this was not meant to signal a policy shift. The SEPs saw 2025 and 2026 growth projections lowered, with 2025 unemployment raised, as were the median headline and core PCE projections. The Fed also announced that from April the Fed will slow the pace of the balance sheet runoff, where the monthly Treasury redemption cap will decline to USD 5 billion from USD 25 billion, but the monthly redemption cap on MBS was unchanged at USD 35 billion. Regarding the composition of the 2025 dot, four on the FOMC see no cuts in 2025, four see one cut, nine see two cuts, and two see three cuts. Regarding the rate decision, it was a unanimous decision although Governor Waller preferred no change to the Fed’s balance sheet policy. Powell’s Press Conference: Largely stressed a wait-and-see approach and that the Fed is not in a hurry to adjust policy, something he repeated when asked about cutting rates in May. He stressed several times there is a lot of uncertainty ahead, and to bear that in mind when digesting Fed forecasts. He acknowledged the rise in short-term inflation expectations but highlighted that long-term inflation expectations remain anchored. He also noted that tariffs tend to see upside in inflation, and downside in growth, but said it is challenging to know how much of an impact tariffs are having directly on inflation, but the increase in goods prices recently is partly due to tariffs. He said it would not make sense for the Fed to act on a policy that has a transitory effect on inflation. He said the Fed can cut, or hold, at what is a “clearly restrictive” level. Regarding the balance sheet, he said it was a technical adjustment and not meant to signal a change in the monetary policy stance, noting it makes sense to slow as the balance sheet approaches an ample level, but they are still far from that. Powell also said that the removal of the Fed language that goals are roughly in balance, was also not meant to send a signal. On PCE, due March 28th, the Chair said PCE prices likely rose 2.5% in February and core PCE prices probably rose 2.8%. Elsewhere, Oil rose 0.43% while Gold ended Wednesday’s session with a further 0.8% gain.
To mark my 3150th 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 185 points yesterday and is now ahead by 1426 points for March after 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 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 1.08% higher at a price of 5675.
The Dow Jones Industrial Average closed 383 points higher for a 0.92% gain at a price of 41,964.
The NASDAQ 100 closed 1.30% higher at a price of 19,736.
The Stoxx Europe 600 Index closed 0.19% higher.
Yesterday, the MSCI Asia Pacific closed 0.4% higher.
Yesterday, the Nikkei closed 0.25% lower at a price of 37,751.
Currencies
The Bloomberg Dollar Spot Index closed 0.05% lower.
The Euro closed 0.35% lower at $1.0900.
The British Pound closed 0.1% higher at 1.3001.
The Japanese Yen rose 0.7% closing at $148.40.
Bonds
Germany’s 10-year yield closed 3 basis points lower at 2.77%.
Britain’s 10-year yield closed 4 basis points higher at 4.64%.
U.S.10 Year Treasury closed 5 basis points lower at 4.24%.
Commodities
West Texas Intermediate crude closed 0.43% higher at $67.19 a barrel.
Gold closed 0.8% higher at $3050.10 an ounce.
This morning on the Economic Front we have U.K. Unemployment including Average Earnings at 7.00 am. This is followed German PPI at 8.00 am and the ECB Economic Bulleting at 10.00 am. Next, we have the Bank of England Rate Announcement at 12.00 pm and Governor Bailey’s press conference at 12.30 pm. In At the same time, we have U.S. Weekly Jobless Claims and the Philly Fed Manufacturing Index. Next, we have Existing Home Sales at 2.00 pm. Finally, we have a press conference with Bank of Canada Governor Macklem at 5.50 pm.
Cash S&P 500
The Fed as expected stuck with its two-rate cut call for the rest of the year. With the Fed’s balance sheet ridiculously high the Fed have to start the process of ending QT especially given the recent economic data. Although Powell said that Trump’s tariffs are in inflationary it is difficult not to expect rate cuts and more QE sooner rather than later and this is the interpretation that markets have taken given Wednesday’s rally. I wrote at length yesterday about the bullish technical set-up in the market and I have no wish to change this view despite Powell’s views about inflation. The question is the timing of it all. The 5th year cycle clearly demonstrates recession risk building later in any decade or the beginning of a decade. That is when we had the big bear moves. 1990 recession, 2001 recession, 2008 recession, 2020 crash, 2022 bear market, 1987 crash. 1929 crash, 1973/74 oil crisis, 1940-41 WWII, you get my drift. None have year 5 in them. Where’s the bear market/recession of 1925, 1935, 1945, 1955, 1965, 1975, 1985, 1995, 2005, 2015? It does not exist. I firmly believe that last Thursday’s 5506 low print will hold for the foreseeable future unless something dramatic happens. For bulls to regain control the S&P needs to break and close over its 200 Day Moving Average at 5758. I know this level is 60 Handles from current pricing and if we do tag this key resistance level the S&P will probably be short-term overbought. However, I have no interest in selling rallies given how much technical damage has been done over the past five weeks. As you know markets have a habit of ignoring bad news when they are as oversold as they are now. The S&P has support from 5640/5660. I will now raise my buy level to this area with a higher 5619 wider ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 5690.
EUR/USD
I am still flat the Euro as the market traded in a narrow range over the past 24 hours. The Euro remains overbought. I will continue to be a seller of rallies. The Euro has resistance from 1.0990/1.1060 where I will be a strong seller with the same 1.1125 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 1.0920. I still do not want to be long the Euro at this time. If this view changes, I will be back I will be back with a new update for my Platinum Members.
Dollar Index
No Change: I am still long at an average rate of 103.75 with the same 104.10 T/P level. I will leave my 102.85 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
It has taken over a week but finally the Russell 2000 rose to my 2085 T/P level on my 2060 average long position and I am now flat. The Russell has support below from 1980/2050 where I will again be a strong buyer with a lower 1935 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2110.
Cash FTSE
I am still flat. Just like the Euro above, the FTSE has also traded in a narrow range over the past 24 hours which is no surprise ahead of the Bank of England Rate Announcement at 12.00 pm and the Bailey Press Conference at 1.30 pm. The FTSE has strong support from 8550/8620. I will be a small buyer on any dip to this area with a higher 8485 tight ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 8685. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
As expected, the Dow rallied hard yesterday. Unfortunately, this move happened without any test of Wednesday’s buy range and I am still flat. The Dow is nowhere near as oversold as the other main American Indexes, as shown by the 200 Day Moving Average which comes in at a price of 42009 – which is just above last night’s New York close. Today, I will raise my buy level to 41400/41650 with a higher 41095 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 41940. I still do not want to be short the Dow at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
The NASDAQ surges yesterday helped by the recovery in some of the MAG stocks. This move higher saw my 19630 T/P level triggered on my latest 19470 long position and I am now flat. This morning, the NDX is trading higher at a price of 19850 as I go to post. The NDX is still oversold as shown by the 200-Day Moving Average which comes in at a price of 20210 this morning. For bulls to regain control this key MA needs to be broken. However, I would not short into this key resistance area given how oversold the American Indexes are per my S&P Commentary yesterday. The NDX has short-term support from 19450/19700 where I will be a strong buyer with a higher 19275 ‘’Closing Stop’’. If my buy level is executed, I will have a T/P level at 19880.
December BUND
The Bund never came close to Wednesday’s buy level and I am still flat. Today, I will raise my buy level to 127.40/128.20 with a higher 126.75 ‘’Closing Stop’’. If triggered, I will have a T/P level at 128.90. 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
Gold continues to build vale above 3020 and I am still flat. Ahead of the weekend, I will now raise my Gold sell level to 3085/3105 with a higher 3121 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 3067. Given how overextended the Gold market is to the upside, I just cannot justify a long position at these levels. If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
No Change: Silver never came close to yesterday’s buy range, and I am still flat. Although I can never be short Silver given how underperforming this asset is versus Gold, I am not prepared to chase the market at these levels. Silver has short-term support from 32.40/33.20 where I will be a small buyer with a higher 30.95 wider ‘’Closing Stop’’. If triggered, I will have a T/P level at 33.90.
Please Note: There will be no Daily Commentary tomorrow. Any of my calls that are not hit today and are subsequently triggered on Friday will see me return with updated emails for my Platinum Members.
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