U.S. Indices had rallied early Wednesday morning and accelerated to peaks in the US session on positive rhetoric regarding China and US trade. The Wall Street Journal reported that the White House is considering cutting China tariffs to de-escalate the trade war, with tariffs likely to be between 50-65%, but no final decision has been made. This report saw the E-Mini S&P 500 futures test 5,500 to the upside. However, the gains then pared with officials noting the White House is not considering something unilaterally, it would be part of negotiations, and that negotiations are yet to take place. Stocks closed well off the earlier peaks but remained firmly in the green. Also supporting the equity space was US President Trump overnight, saying he would not fire Fed Chair Powell, but he continued to call for lower rates. This saw the Treasury curve flatten, while T-notes were choppy in response to the WSJ trade report. T-notes initially chopped on the report but swiftly pared with a one-way trade lower thereafter into settlement, settling relatively unchanged (nearly a whole point off the highs). The downside was likely driven by details of the report being digested (50-65% tariffs are still very high), and as officials dialled down the softening tone on China. Crude prices were choppy but ultimately settled in the red with reports from Reuters that several OPEC+ members want the group to approve another accelerated oil output increase for June, hitting both WTI and Brent. In FX, the Dollar was strong against the Japanese Yen, Euro and Swiss Franc during the risk-on trade. Elsewhere, earnings were in focus with Tesla (TSLA) rallying despite a weak report, but as Musk signalled, he will be scaling back his DOGE work. Boeing (BA) rose after a stronger-than-expected report, while AT&T (T) were flat. Philip Morris (PM) also beat expectations. Data took the back seat with the focus largely on trade/Trump updates. Nonetheless, Flash PMI data in the US was mixed (services missed, manufacturing beat, but composite fell), while new home sales topped all analyst forecasts. The S&P Global Flash PMIs for April saw Manufacturing top expectations at 50.7 (exp. 49.1, prev. 50.2), while Services missed at 51.4 (exp. 52.5, prev. 54.4), meaning the Composite fell to 51.2 from 53.5, which incidentally is a 16-month low. Business expectations about the year ahead also dropped to one of the lowest levels seen since the pandemic, while prices charged for goods and services rose at the sharpest rate for just over a year, with an especially steep increase reported for manufactured goods, linked to tariffs. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said that the data points to a marked slowing of business activity growth at the start of Q2, accompanied by a slump in optimism about the outlook. As well as this, as price pressures intensified, it creates a headache for the Fed, which is coming under increasing pressure from the President and also to shore up a weakening economy just as inflation looks set to rise. Manufacturing is broadly stagnating as any beneficial effect of tariffs is offset by heightened economic uncertainty, supply chain concerns and falling exports. Lastly, confidence about business conditions is worsening due to the impact of the Trump administration announcements, while tariffs are also cited as the key cause of higher prices. New Home Sales rose 7.4% in March to 724k (prev. 0.674k), above the 680k forecast and above the top end of analyst forecasts (700k). Despite the report being much stronger than expected, Oxford Economics “still see limited upside for sales in 2025 given our forecast for mortgage rates to remain elevated and the economy to weaken in response to the Trump administration’s tariff policies. The Fed’s Beige Book was released last night: It was little changed since the previous report, but uncertainty around international trade policy was pervasive across reports. Just five Districts saw slight growth, three Districts noted activity was relatively unchanged, and the remaining four Districts reported slight to modest declines. Manufacturing was mixed, but two-thirds of Districts said activity was little changed or had declined. The energy sector experienced modest growth. Agricultural conditions were fairly stable across multiple Districts. The outlook in several Districts worsened considerably as economic uncertainty, particularly surrounding tariffs, rose. Prices were also little changed since the previous report, but uncertainty around international trade policy was pervasive across reports. Just five Districts saw slight growth, three Districts noted activity was relatively unchanged, and the remaining four Districts reported slight to modest declines. Manufacturing was mixed, but two-thirds of Districts said activity was little changed or had declined. The energy sector experienced modest growth. Agricultural conditions were fairly stable across multiple Districts. The outlook in several Districts worsened considerably as economic uncertainty, particularly surrounding tariffs, rose. Meanwhile, Fed Member Kugler said tariff increases are significantly larger than previously expected, and the economic effects of tariffs and uncertainty are likely to be larger than anticipated. Kugler added that they are facing potential shocks now, much related to tariffs and uncertainty. Ahead, Kugler supports holding the policy rate steady as long as upside risks to inflation remain, while economic activity and employment remain stable. Kugler reiterated a familiar Fed line that the central bank policy is well-positioned for macroeconomic changes. Speaking on inflation expectations, something the Fed watches closely, she added that they are largely well-anchored and hopes they remain so. Elsewhere, both Oil and Gold closed lower by 2.3% and 2.6% respectively.
To mark my 3175th 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 65 points yesterday and is now ahead by 7440 points for April 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 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 1.67% higher at a price of 5375.
The Dow Jones Industrial Average closed 419 points higher for a 1.07% gain at a price of 39,606.
The NASDAQ 100 closed 2.28% higher at a price of 18,693.
The Stoxx Europe 600 Index closed 1.78% higher.
Yesterday, the MSCI Asia Pacific closed 1.3% higher.
Yesterday, the Nikkei closed 1.89% higher at a price of 34,868.
Currencies
The Bloomberg Dollar Spot Index closed 0.95% higher.
The Euro closed 0.86% lower at $1.1321.
The British Pound closed 0.51% lower at 1.3263.
The Japanese Yen fell 1.36% closing at $143.45.
Bonds
Germany’s 10-year yield closed 6 basis points higher at 2.50%.
Britain’s 10-year yield closed 1 basis points higher at 4.57%.
U.S.10 Year Treasury closed 1 basis points lower at 4.38%.
Commodities
West Texas Intermediate crude closed 2.29% lower at $62.21 a barrel.
Gold closed 2.63% lower at $3291.10 an ounce.
This morning on the Economic Front we have the German IFO Survey at 9.00 am, followed by a 20-Year U.K. Gilt Auction at 10.00 am. Next, we have U.S Weekly Jobless Claims, Durable Goods Orders and the Chicago Fed National Activity Index at 1.30 pm. This is followed by Existing Home Sales at 3.00 pm and the Kansas City Fed Manufacturing Index at 3.30 pm. Finally we have a Seven Year Treasury Auction at 6.00 pm and a speech from Fed Member Kashkari at 10.00 pm.
Cash S&P 500
President Trump’s 100th day does not come until April 29. It feels like it has been more like 1,000 days. If you feel utterly confused and have no idea what is going on, know that you are not alone. Luckily, the markets can tell us a lot of information even when they are in a state of massive confusion. What is clear is that the S&P 500 does not like the 5,450 level. There have now been four attempts to break out that have failed. There is nothing that stands out as special about that area from a technical standpoint, that I can tell, and I have tried looking at and measuring it from a few different angles. The other thing it tells me is that my view that another leg lower started seems to be wrong, at least for now. However, the fact that 5,450 has been tested a few times and remains a wall is not a good sign for where the market is heading next. Now that we have two large lower gaps, I would guess that we fill the lower gap at 5,260. What is also probably not a good sign is that the 10-year Treasury finished the day down just two basis points. It was like the little engine that could, and kept working all day long to pull itself up the hill, after it fell 15 basis points to start the day. That is quite the feat, and more impressively, it seems that many sellers prefer the 4.25% region. A lot has been thrown at this bond market – the kind of stuff that should send rates lower, too – yet they won’t drop. I hate to say it, but that probably means rates are going to be heading much, much higher. There could be a good reason for that, according to S&P Global, the US Flash PMI today noted that input costs in the Manufacturing sector increased at the fastest rate since August 2022. It is worth nothing that a significant amount of liquidity has been removed from reserves over the past two weeks. We tend to see general collateral rates fall this time of the month and then begin to tighten up again by the end of the month. We saw the same thing heading into the end of March. But there are fewer reserves available today than there were a month ago, so I will keep an eye on SOFR in the mornings. The higher it goes, the tighter the liquidity conditions in the market. Things have been fairly loose the last couple of days. On the other hand, the blackout period for buying your own shares ends next week which may help liquidity. So far there have been no tariff agreements with any country so my own opinion is that this is going to take longer to resolve, thus the heightened volatility. I am still flat the S&P as the market never came close to Wednesday’s buy range. Yesterday’s surge has left a massive ‘Open Gap’ from Tuesday’s 5287 close to Wednesday’s 5356 low print. As a result, I will not chase the S&P higher as I continue to be a strong buyer on any further dip lower to 5265/5295 with the same 5249 ‘Closing Stop’. If I am taken long, I will have a T/P level at 5333. Despite my concerns I still do not want to be short the S&P at this time.
EUR/USD
The Euro fell shy of Wednesday’s sell range and I am still flat. I will now lower my sell level to 1.1410/1.1510 with a lower 1.1615 ‘Closing Stop’. If I am taken short, I will have a T/P level at 1.1320. I still do not want to be long the Euro at this time.
Dollar Index
My 99.05 average long Dollar position worked well as the market rallied to my 99.70 T/P level and I am now flat. Given how severely oversold the Dollar is trading, despite Tuesday’s and Wednesday’s rally I will continue to be a buyer of dips. The Dollar has short-term support from 98.60/99.40 where I will again be a buyer with a lower 97.65 ‘Closing Stop’. If I am taken long, I will have a T/P level at 100.20.
Russell 2000
I am still flat the Russell Index. The market surged on the U.S. open hitting an intra-day high at 1970 before falling a huge 70 points into the close. Today, I will continue to be a buyer on any dip lower to 1790/1870 with the same 1735 ‘Closing Stop’. If I am taken long, I will have a T/P level at 1945. I still do not want to be short the Russell at this time.
FTSE 100
I am still short the FTSE at an average rate of 8360 with the same 8475 ‘Closing Stop’. Ahead of the weekend, I will now raise my T/P level to 8325. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
Unfortunately, the Dow just missed my sell range on Wednesday before falling over 650 points from its 40376 high print and I am still flat. I will not chase the price of the Dow lower as I continue to be a seller on any further rally to 40500/40800 with the same 41105 wider ‘Closing Stop’. If I am taken short, I will have a T/P level at 40190.
Cash NASDAQ 100
Despite falling over 350 points from its afternoon high, the NDX still led Wednesday’s gains, closing higher by 2.7%. This move saw another 400-point gap left from Tuesday’s close. Personally, I think the market is getting ahead of itself as so far no deal on tariffs with any country has been agreed. If there was something meaningful behind Trump’s tweets then the Dollar would be trading 2/3% higher. I am still flat the NDX. Today, I will raise my buy level slightly to 18150/18350 with a higher 17895 ‘Closing Stop’. If I am taken long, I will have a T/P level at 18570. I still do not want to be short the NDX at this time
December BUND
The Bund just missed Wednesday’s sell level before having a small sell-off into the New York Close and I am still flat. Ahead of the weekend, I will not chase the Bund lower as I continue to be a seller on any further rally to 132.60/133.60 with the same 134.35 ‘Closing Stop’. If I am taken short, I will have a T/P level at 131.90.
Gold Rolling Contract
The volatility in Gold is insane. Having hit a new all-time high on Monday at $3500, the market is now trading below $3300. Gold has short-term support from 3180/3210 where I will be a small buyer with a 3165 tight ‘Closing Stop’. If I am taken long, I will have a T/P level at 3260. I still do not want to be short Gold at this time.
Silver Rolling Contract
I am still flat. Silver finally caught a bid yesterday, closing higher by 3%. This should not surprise as I continue to be bullish of Silver, looking for an eventual test of the May 2011 high at $50. Silver is trading at 33.30 this morning. I will now raise my buy level to 31.30/32.30 while leaving my 29.95 ‘Closing Stop’ unchanged.
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