U.S. Indexes were broadly firmer as risk sentiment improved on the extension of the US/Iran ceasefire, although underlying uncertainty kept oil prices supported. Equities were bid, while crude prices also moved higher, highlighting the conflicting forces of easing immediate escalation risk but ongoing disruption in the Strait of Hormuz. Geopolitical headlines remained mixed. Reports suggested US/Iran talks could resume as soon as Friday, although Iranian press pushed back on this, while uncertainty persists around the duration and credibility of the ceasefire. Continued reports of disruptions in the region, with Iran seizing and firing on ships despite the ceasefire extension, kept a geopolitical risk premium embedded in energy markets. The move in oil fed through into rates, with the Treasury curve bear flattening as yields rose into the US afternoon. Despite this, precious metals held onto gains, with Gold and Silver supported even as yields edged higher. In FX, antipodes outperformed, tracking the positive risk tone, with NZD leading gains amid hawkish RBNZ pricing. The dollar saw modest strength, largely driven by Euro weakness after Germany, France, and Italy downgraded growth forecasts in response to the war. The Swiss Franc also lagged on the improved risk backdrop with equities gaining. Overall, markets are balancing optimism around a potential de-escalation with lingering uncertainty, leaving oil supported and cross-asset price action somewhat mixed. Elsewhere, there was no Tier 1 US data, while the Fed remains in blackout ahead of the April 29th meeting. The 20-year bond auction came in stronger than expected but had little impact on price action, with markets remaining firmly focused on geopolitical developments. Meanwhile, Oil closed higher by a further 3.5% while Gold ended Wednesday’s session with a 0.3% gain.
To mark my 3350th 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 was flat yesterday and is still ahead by 1196 points for April after ending March with a massive gain of 9002 points, having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, 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 1.05% higher at a price of 7137.
The Dow Jones Industrial Average closed 340 points higher for a 0.69% gain at a price of 49,480.
The NASDAQ 100 closed 1.73% higher at a price of 26,942.
The Stoxx Europe 600 Index closed 0.35% lower.
Yesterday, the MSCI Asia Pacific closed 0.3% higher.
Yesterday, the Nikkei closed 0.40% higher at a price of 59,585.
Currencies
The Bloomberg Dollar Spot Index closed 0.17% higher.
The Euro closed 0.12% lower at $1.1714.
The British Pound closed 0.18% higher at $1.3512.
The Japanese Yen rose 0.08% closing at $159.47.
Bonds
U.K.’s 10-Year Gilt closed 2 basis points higher at 5.16%.
Germany’s 10-Year Bund Yield closed 1 basis points higher at 3.02%
U.S.10 Year Treasury closed 1 basis points lower at 4.30%.
Commodities
West Texas Intermediate crude closed 3.67% higher at $92.96 a barrel.
Gold closed 0.34% higher at $4739.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone and U.K. Manufacturing PMI at 8.30 am, 9.00 am and 9.30 am respectively. Next, we have UK CBI Industrial Trends at 11.00 am, followed by U.S. Weekly Jobless Claims and the Chicago Fed National Activity Index at 1.30 pm. Finally, we have Manufacturing PMI at 2.45 pm and the Kansas City Manufacturing Index at 4.00 pm.
Cash S&P 500
Stocks finished the day mixed, with the S&P 500 up 1% while the equal-weight RSP fell by 4 bps—dispersion to the max, it would seem. The DSPX closed today at 38.5, suggesting that the dispersion trade is becoming quite crowded. It is back within a range it does not reach very often, with only a few notable historical instances. This was driven by S&P 500 constituent implied volatility remaining elevated, while the VIX index declined today. That caused the spread between the two to widen, making conditions more favorable for the dispersion trade. That spread, like the dispersion index, is extremely wide. It will begin to narrow as we move through earnings season, but until we get through the mega-cap results, it is likely to either remain at current levels or widen further. Technically, nothing for the SPX has changed, except that we now have a gap likely to be filled at lower levels from yesterday’s open (7064-7102). Straight-line declines into the close, followed by a gap open the next day, tend to be unstable patterns and are often filled fairly quickly. It would not be surprising to see that gap filled in short order. In the meantime, Brent oil prices rose by almost 3% on the day to nearly $102. At this point, the falling wedge has been broken, and oil now appears to have formed an inverse head and shoulders pattern on the intraday chart, along with a smaller bull flag. I think if we see Brent move above $104, it could very well be on its way to $110. The 2-year also rose by 2 bps on the day, finishing at 3.8%. A move above resistance would likely set the 2-year up to climb back toward 4%. In the meantime, the spread between Italian and German 10-year rates widened by 2 bps. Again, this spread is very tight, but if it continues to widen, it is a signal that other spreads may begin to widen as well and, more importantly, that financial conditions are starting to tighten as we saw with Tuesday’s surge in Gilt Yields. Additionally, 1-year inflation expectations appear to be coiling here, with a bullish-looking flag of their own, suggesting higher inflation may be on the way. I just do not think it is possible for oil to rise the way it has without financial conditions tightening and stock markets falling. One respected analyst that I follow says his charts are telling him the S&P may hit a new all-time high at 7230. If this happens he thinks that this high will take a decade to surpass. I will certainly be watching his calls closely over the coming weeks. I am still short of the S&P at an average rate of 7019. Ahead of the weekend I will only add to this position at 7175 with the same no stop. Meanwhile, I will leave my 6995 T/P level unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
EUR/USD
I am still flat as the Euro never came close to either my buy/sell level on Wednesday. Today, I will leave my levels unchanged: The Euro has short-term support below from 1.1580/1.1660 where I will be a small buyer with a 1.1495 ‘Closing Stop’. I will now lower my sell level to 1.1790/1.1860 with a lower 1.1935 ‘Closing Stop’. If I am taken long, I will have a T/P level at 1.1730. If I am taken short, I will have a T/P level at 1.1730.
Dollar Index
I am still long the Dollar at an average rate of 98.30 with the same 97.25 ‘Closing Stop’. I will leave my T/P level unchanged at 98.70. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
No Change: I am still short the Russell at an average rate of 2725 from last Friday. To reduce risk, I will leave my 2700 T/P level unchanged with the same 2795 ‘Closing Stop’. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
FTSE 100
U.K. Gilt Yields remained elevated, putting downward pressure on the FTSE. The FTSE has support below from 10250/10350 where I will be a small buyer with a 10155 ‘Closing Stop’. If I am taken long, I will have a T/P level at 10460. I no longer want to be short the FTSE at this time.
Dow Rolling Contract
I am still flat the Dow. Ahead of the weekend, I will now raise my sell level to 49900/50200 with a higher 50405 ‘Closing Stop’. If I am taken short, I will have a T/P level at 49670. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
A late rally saw the NDX spike into the close. This move higher saw the whole of my sell range triggered for a now 26880 average short position. With the NDX closing at a new all-time high which makes absolutely no sense to me given the valuations etc I have to respect the price action. I will leave my tight 21705 ‘Closing Stop’ unchanged while raising my T/P level to 26700. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
I am still flat the Bund. I will not chase the Bund lower as I continue to be a seller from 126.50/127.30 with the same 128.05 ‘Closing Stop’. If I am taken short, I will have a T/P level at 125.70.
Gold Rolling Contract
Gold traded in a narrow range on Wednesday and I am still flat. The bottom of the Bollinger Band comes in at a price of 4351 this morning. Today, I will continue to be a buyer from 4320/4420 while leaving my 4195 wider ‘Closing Stop’ unchanged. If I am taken long, I will have a T/P level at 4530. If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
I am still flat. Today, I will again be a buyer on any further dip lower to 71.80/74.80 with a lower 69.85 wider ‘Closing Stop’. If I am taken long, I will have a T/P level at 77.30. I still do not want to be short Silver at this time.
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. I am travelling back to Dublin tonight. From Monday my Daily Commentary will be posited at the normal time of 8.00 am/8.30 am.
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