U.S. Equity Markets closed ultimately closed flat on Wednesday with slight outperformance in the NASDAQ 100. The majority of sectors closed in the red, with energy and Tech the only sectors closing in the green. Tech was supported by upside in NVDA after prior day weakness, helped by positive commentary from JP Morgan, noting the Blackwell production shipment ramp is on track to fire in Q4 with a strong demand outlook for FY25. The energy sector also outperformed on account of higher crude prices as geopolitical tensions remain high, with participants eyeing the Israeli response to Iran, and any fallout thereafter. Nonetheless, crude prices settled well off their earlier peaks after the US inventory data showed a larger build than expected, although upside in futures resumed post-settlement. T-notes were lower across the curve after the ADP National Employment print rose above all analyst forecasts, which also gave a further boost to the Dollar. The Japanese Yen was the clear FX laggard after Japanese Prime Minister Ishiba took a dovish stance on rates, noting Japan is not in the environment for an additional rate hike. Meanwhile, Bank of Japan Governor Ueda reiterated the market is not stable, also implying it is not the time to hike. Note, there were several Fed speakers on Wednesday, albeit only Barkin spoke on monetary policy, where he also signalled two 25bp rate cuts through year-end but warned the last mile of inflation may still take longer than expected, and he is worried price pressures could get stuck next year. The September ADP print was hotter than all analyst forecasts, rising by 143k, above the 120k consensus, and just above the most optimistic 143k forecast, accelerating from the prior (revised up) 103k. The report highlighted that “Job creation showed a widespread rebound after a five-month slowdown. Only one sector, information, lost jobs. Manufacturing added jobs for the first time since April.” On wages, the median change in annual pay for job stayers eased to 4.7% from 4.8% Y/Y, while job changes eased to 6.6% from 7.3%. The ADP Chief Economist, Nela Richardson, added that “Stronger hiring did not require stronger pay growth last month. Typically, workers who change jobs see faster pay growth. But that premium over job-stayers shrank to 1.9 percent, matching a low we last saw in January.” The strong labour market data comes ahead of the BLS NFP report on Friday, however Pantheon Macroeconomics ” caution against placing much weight on ADP’s initial estimate of private payroll growth, as it has been a poor guide since its methodology was overhauled two years ago”. Elsewhere, Oil closed higher by a further 1.68% while Gold was flat despite the stronger Dollar.
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For anyone following my Platinum Service it made 110 points yesterday and is now ahead by 390 points for October after ending September with a gain of 4402 points following a 301-point loss for August after closing July with a gain of 1918 points while June closed with a gain of 2074 points, having made 1843 points in May. The Platinum Service made 4010 points in April after ending March with a gain of 2113 points. February closed with a gain of 1606 points, after closing January with a gain of 3675 points. December saw a gain of 1890 points after finishing November with a gain of 1734 points. October ended with a gain of 3184 after closing September with a small gain of 228 points, after finishing August with a gain of 1485 points, 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 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 0.01% higher at a price of 5709.
The Dow Jones Industrial Average closed 39 points higher for a 0.09% gain at a price of 42,196.
The NASDAQ 100 closed 0.15% higher at a price of 19,802.
The Stoxx Europe 600 Index closed 0.05% higher.
Yesterday, the MSCI Asia Pacific closed 0.4% higher.
Yesterday, the Nikkei closed 2.18% lower at a price of 37,808.
Currencies
The Bloomberg Dollar Spot Index closed 0.42% higher.
The Euro closed 0.2% lower at $1.1047.
The British Pound closed 0.1% lower at 1.3266.
The Japanese Yen fell 2.03% closing at $146.47.
Bonds
Germany’s 10-year yield closed 5 basis points higher 2.10%.
Britain’s 10-year yield closed 8 basis points higher at 4.03%.
U.S.10 Year Treasury closed 6 basis points higher at 3.79%.
Commodities
West Texas Intermediate crude closed 1.68% higher at $70.98 a barrel.
Gold closed 0.2% lower at $2658 an ounce.
This morning on the Economic Front we have German, Euro-Zone and U.K. Composite PMI at 8.55 am, 9.00 am and 9.30 am respectively. Next, we have Euro-Zone PPI at 10.00 am. This is followed by U.S. Weekly Jobless Claims at 1.30 pm and Composite PMI at 2.45 pm. Finally, we have ISM Services PMI and Factory Orders at 3.00 pm. Meanwhile, Fed Members Kashkari and Bostic are speaking at 3.40 pm and 3.45 pm respectively.
Cash S&P 500
Incredible price action as buyers keep showing up on every dip. For the ‘’Fear & Greed’’ Index to print ‘’Extreme Greed’’ on the last day of September which is traditionally is the weakest month of the year against a backdrop of overvalued stocks and a geo-political scenario that is getting worse every day just adds to the difficulties faced in trying to short the S&P. I have zero interest in buying the S&P at current levels preferring to see a decent sell-off first. The strategy of selling rips has worked well over the past three weeks but you have to be quick to take your gains as they quickly evaporate. I am still flat the S&P as the market never came close to either my buy/sell levels yesterday. There is no need to take undue risks as we patiently wait for the S&P to hit our levels. Tomorrow’s NFP data will be key to the major move. As a result, I am going to leave my buy/sell levels basically unchanged from yesterday. Therefore, I will continue to be a strong buyer on any further dip lower to 5628/5648 with the same 5606 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 5669. My only interest in selling the S&P is from 5752/5772 with a now higher and wider 5791 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 5734. If my view changes on any of the above levels I will be back with a new update for my Platinum Members.
EUR/USD
The Euro missed my 1.0885 T/P level by 2 points before having a small sell-off into the New York close. I am still long at a price of 1.1050 with the same tight 1.1085 T/P level. I will add to this position on any further move lower to 1.0970 while leaving my tight 1.0915 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with anew update for my Platinum Members.
Dollar Index
The Dollar has now rallied over 1.3% off last Friday’s 100.22 low print. I am still flat. The Dollar has short-term resistance from 102.00/102.60 where I will be a small seller with a tight 103.15 ‘’Closing Stop’’.
Cash DAX
The DAX traded heavy yesterday, and I am still flat. Given the backdrop in the German Economy I have no interest in buying the market. However, with buyers turning up on every sell-off it is difficult to be short. For these reasons I will not chase the DAX lower, continuing to be a seller on any further rally to 19520/19620 with the same 19705 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 19450.
Cash FTSE
Despite the rise in Gilt Yields above 4% the FTSE was bid all day Wednesday albeit trading in a narrow range. I have no interest in chasing the market higher as I continue to be a strong buyer on any dip lower to 8100/8180 with the same 8015 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 8240. I still do not want to be short the FTSE at this time
Dow Rolling Contract
No Change: The Dow traded in a narrow range yesterday and I am still flat. I have no particular edge in the Dow at these levels. I just cannot be a buyer given how overbought the market is trading while I am not going to chase the market lower. The Dow has resistance from 42600/42850 where I will continue to be a seller with the same 43105 wider ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 42380.
Cash NASDAQ 100
I am still flat the NDX as the market again fell shy of yesterday’s sell range. Ahead of the key NFP Report tomorrow at 1.30 pm I will now raise my NDX sell level to 19980/21030 with a higher and wider 20205 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 19860. I still do not want to be long the NDX at this time. I still do not want to be long the NDX at this time. If this view changes, I will be back with a new update for my Platinum Members.
December BUND
My 135.80 aver short Bund position worked well as the market sold off to my 135.40 T/P level and I am now flat. Today, I will again be a seller on any further rally to 135.90/136.60 with a higher 137.15 ‘’ Closing Stop’’. If I am taken short, I will have a T/P level at 135.30. I still do not want to be long the Bund at this time.
Gold Rolling Contract
Gold closed flat yesterday and I am still flat. As I have said for the past two weeks, I have no interest in chasing the price of Gold higher, preferring to be a buyer of Silver. Gold has short-term support from 2570/2588. I will continue to be a buyer on any dip to this area with the same 2559 tight ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2602.
Silver Rolling Contract
My Silver plan worked well as the market traded lower to my 31.10 buy level before rallying to my 31.80 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 30.40/31.30 with the same 28.95 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 32.05.
Please Note: There will no Daily Commentary tomorrow. Any of my calls that are not hit today and are subsequently triggered on Friday will see me return with update emails for my Platinum Members.
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