Google Shares falling a huge 10% yesterday saw U.S. Equity Markets get hit hard on Wednesday. The NASDAQ 100 led the declines with a loss of 2.47%. This was the worst day for the NDX since February 21 when the NDX fell 2.51%. Treasury Yields rising 13 Basis points added to the gloom after an awful five-year Treasury Auction. Meanwhile, the Bank of Canada left Interest Rates unchanged at 5% as expected, while it maintained guidance that it is prepared to raise rates further if needed. According to S&P Global, U.S. business output experienced a slight increase for October as the manufacturing sector broke out of a five-month contraction. S&P Global’s composite Purchasing Managers Index (“PMI”) which tracks both the manufacturing and services sectors, rose above the expansion/contraction threshold – to a reading of 51. The uptick in manufacturing activity was driven by a jump in factory orders, the first increase in six months, while the services sector saw its slowest growth in input costs in three years, as well as the smallest price increase since 2020. The positive PMI readings suggest that economic growth has carried over into the fourth quarter and that the economy could weather more tightening from the Federal Reserve. General Motors (GM) exceeded its earnings expectations despite an ongoing United Auto Workers Union strike. The company reported an adjusted earnings per share (“EPS”) of $2.28, significantly higher than the $1.84 estimate. GM had previously forecast a $14 billion profit goal. However, the carmaker has withdrawn its full-year guidance due to volatility created by the strike. The company said the strike has cost the company nearly $800 million, with an estimated $200 million weekly cost moving forward. Additionally, the company scrapped its plan to produce 400,000 electric vehicles (“EVs”) in 2024 but will continue to strive for 1 million EVs by 2025. Higher prices have not deterred consumers from buying Coca-Cola (KO) beverages. As a result, the company raised its full-year outlook. It now expects organic revenue growth and adjusted profit growth in the ranges of 10% to 11% and 7% to 8%, respectively. The positive outlook comes as the company reported a significant increase in price mix (the change in prices across a range of products) while maintaining a modest growth in volume. Coca-Cola CFO John Murphy also commented that the company will be closely monitoring the effect of weight-loss drugs on consumer habits and consumption. A member of Big Tech’s “Magnificent Seven” may be entering the market for personal-computer chips, a space long dominated by Intel (INTC). Nvidia (NVDA) has reportedly begun designing central processing units (“CPUs”) that would incorporate from Arm, a British semiconductor-design company, to run Microsoft Windows. Alongside Nvidia, Advanced Micro Devices (AMD) also plans to join the race to enter the CPU market. The two companies could begin selling chips as soon as 2025. While Intel’s dethronement in the computer-chip space is not guaranteed, the competition will undoubtedly become fiercer now that Nvidia and AMD have started development. Barclays (BCS) lost nearly $2.7 billion in market value yesterday after it lowered its forecast for lending profitability. The British banking giant kicked off reporting season for U.K. banks to a dismal start by lowering its estimated full-year net interest margin. Additionally, Barclays reported pretax profit at 1.9 billion pounds, down from the 2 billion pounds reported a year ago. The announcement translated into a 10% drop in share prices during midday trading on U.S. exchanges. General Electric (GE) raised its profit forecast as demand for flights sparked growth in its aviation division. The company now expects its 2023 adjusted EPS between $2.55 and $2.65, coming in above the estimated $2.36. It also projects sales to grow in the low teens and free cash flow to reach $5.1 billion. Larry Culp, General Electric’s CEO, suggested its aviation operations have seen sustained growth and solid execution despite supply-chain challenges. As a result, GE prices rose more than 6% during midday trading. European Markets closed mixed. Business activity has slumped in the Euro-Zone, sparking fears of a recession. The latest S&P Global PMI showed that the economy contracted, dropping to a three-year low of 46.5 and below expectations of a slight improvement to 47.4. Headwinds like rate-hiking campaigns and a slowdown of global activity have continued to plague the region. Additionally, nearby conflict in the Middle East has caused energy prices to rise, exacerbating the eurozone’s woes. Economists fear that the two consecutive quarters of negative growth could send the currency bloc into a recession. Elsewhere, Oil closed higher by 2% while Gold ended Wednesday with a small 0.3% gain.
To mark my 2875th 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 41 points yesterday and is now ahead by 2580 points for October after closing September with a small gain of 228 points, after finishing August with 1485 points gain following a small gain of 285 points gain in July, after closing June with a gain of 2683 points. May closed with a gain of 3205 points. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made 3164 points in February, 4687 points in January 2054 points in December, 4789 points in November and a record 9619 points last October. 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 1.43% lower at a price of 4186.
The Dow Jones Industrial Average closed 105 points lower for a 0.32% loss at a price of 33,035.
The NASDAQ 100 closed 2.47% lower at a price of 14,381.
The Stoxx Europe 600 Index closed 0.04% higher.
Yesterday, the MSCI Asia Pacific closed 0.5% higher.
Yesterday, the Nikkei closed 0.67% higher at a price of 31,269.
Currencies
The Bloomberg Dollar Spot Index closed 0.23% higher.
The Euro closed 0.2% lower at $1.0567.
The British Pound closed 0.4% lower at 121.10.
The Japanese Yen fell 0.1% closing at $150.07.
Bonds
Germany’s 10-year yield closed 8 basis points higher at 2.90%.
Britain’s 10-year yield closed 7 basis points higher at 4.61%.
U.S.10 Year Treasury closed 13 basis points higher at 4.95%.
Commodities
West Texas Intermediate crude closed 2.0% higher at $85.97 a barrel.
Gold closed 0.3% higher at $1979.10 an ounce.
This afternoon on the Economic Front we have ECB Rate Announcement at 1.15 pm where no change is expected. At 1.30 pm we have U.S. Weekly Jobless Claims, GDP. Trade Balance, Durable Goods Orders and Wholesale Inventories. Next, we have the ECB President Lagarde’s press conference at 1.45 pm. At 3.00 pm we have Pending Home Sales, followed by the Kansas City Fed Manufacturing Activity Index at 4.00 pm. Finally, after the close we have the key earnings from Amazon.
Cash S&P 500
Incredible price action again yesterday resulting in a number of key support levels being broken into the close. Much weaker than expected earnings from Google saw both the Dollar and Treasury Yields rise yesterday, hitting the S&P hard. The S&P closed at its Weekly 50 MA and 100 Day Moving Average. As I go to press both these levels have been broken so we will see how this plays out into tonight’s close. Despite the brutal chop I am continuing with my game plan of buying the dip. Yesterday’s move lower saw the whole of my buy range triggered for a now 4217 average long position. As we are having a nice month, I have decided to risk some of these gain by holding on to this S&P position with no stop. Seasonality will continue to improve with each passing day and by early November buybacks will be back in full swing. This could be a vicious move higher ahead of the next drama which will take place in Mid-November as Government funding will be front and centre again. Even though META had better than expected results we are seeing plenty of two-way price action overnight. The S&P has further support below at 4142 where I will add to my existing long position. For now, I have no stop or T/P level on this position. If this view changes I will be back with a new update for my Platinum Members.
EUR/USD
No Change. I am still long the Euro from Tuesday at 1.0605. I will continue to add to this position at 1.0535 with the same 1.0485 ‘’Closing Stop’’. I will have a lower 1.0665 T/P level on this position. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
September Dollar Index
I am still short the Dollar at 106.25 with the same 105.70 T/P level. As I go to press the USD/JPY is trading above 150. It will be interesting to see if we see some intervention from the BOJ as they will certainly not be happy with the current weakness in the Yen. I will add to this position at 106.95 with the same 107.35 ‘’Closing Stop’’. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
No Change. My only interest in buying the DAX is still on a move lower to 14600/14680 with the same 14495 ‘’Closing Stop’’.
Cash FTSE
It was interesting that both the DAX and FTSE did not follow the U.S. Indexes lower yesterday. I am still flat the FTSE with the same 7270/7340 buy range. I will leave my 7215 ‘’Closing Stop’’ unchanged. If triggered, I will have a T/P level at 7405.
Dow Rolling Contract
Frustratingly, the Dow missed yesterday’s 32980 buy level by just five points before rallying to an afternoon high at 33,267. Subsequently, the awful five-year Treasury Auction saw the Dow fall 200 points off this high into the close. As I am writing this commentary the Dow finally hit my 32980 buy level before having a small rally. I have now exited this position here at 33021 and I am now flat. It was interesting that the Bank Index held in yesterday despite the 13-basis point rally in Bonds. This is another positive divergence. As I am still long both the Dow and NDX, I will only be a buyer of the Dow on any further move lower to 32650/32880 with a lower 32495 ‘’Closing Stop’’.
Cash NASDAQ 100
Brutal price action. Google losing a massive $170bn in Market Cap yesterday saw the NDX fall a huge 300 points. This move lower saw my second buy level at 14570 triggered for a now 14645 average long position. Given how oversold the NDX is and the fact that all my technical signals are a screaming buy I emailed my Platinum Members to hang on to yesterday’s long position. The NDX has further support below at 14170. I will add to my existing long position at this price with no stop or T/P level for now. If this view changes I will be back with a new update for my Platinum Members.
December BUND
Higher Treasury Yields saw the Bund trade lower to my buy range. I am now long at 128.05 with a now lower 128.70 T/P level. I will add to this position on any further move lower to 127.35 with the same 126.75 ‘’Closing Stop’’. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
No Change. Gold surged last week, trading $150 higher from where we were 10 days ago. This is a massive move on Geo-political risk. I am still flat Gold, and I am going to stay this way as I certainly have no interest in being long the market at these prices. The price action is telling you not to be short. Once the price of Gold settles in a new range I will be back with a new update.
Silver Rolling Contract
No Change. I am still long Silver from five weeks ago at 24.05. In a change of strategy, I will have no stop or no T/P level on this position. This morning Silver is trading unchanged at 22.95. If this view changes, I will be back with a new update for my Platinum Members.
Please Note: There will be no Daily Commentary tomorrow. Any calls that do not hit today and are subsequently triggered tomorrow, will see me return with updated emails for my Platinum Members. Despite Monday being a bank holiday in Ireland, my Daily Commentary will be posted as normal.
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