U.S. Indexes closed on Wednesday, with the Russell 2000 outperforming while the NASDAQ 100 underperformed. The vast majority of sectors finished in the green, although Consumer Discretionary was flat and Real Estate closed lower amid ongoing concerns around elevated yields, albeit the Treasury curve itself was little changed on the session. The Treasury curve saw a marginal steepening, with front-end yields edging lower while the belly and long end were broadly flat as attention turns towards Friday’s NFP report. Administration officials continued to be quizzed on elevated bond yields, with Commerce Secretary Lutnick saying rates will come back down and the market will stabilise, adding that he is not concerned. Treasury Secretary Bessent meanwhile said the goal of the buyback operations is to avoid a bad market outcome, noting that buybacks free up balance-sheet capacity and make room for banks to participate more at Treasury auctions. Oil prices settled in the green amid elevated US-Iran tensions, although US President Trump said the renewed campaign against Iran will not continue for too long and that oil prices will come down. However, Trump also said he is prepared to launch another attack on Iran. Meanwhile, the Saudi Foreign Ministry urged all parties to remain calm, halt escalation, respect international law and return to negotiations. In FX, the Japanese Yen outperformed amid intervention watch following some sizeable Yen buying, while Treasury Secretary Bessent added to the move by saying, “I know what Japan are doing”. The Canadian Dollar also strengthened following the Bank of Canada, which left rates unchanged but placed greater emphasis on its inflation mandate amid rising upside risks, while Governor Macklem acknowledged the bluntness of monetary policy in addressing the impact of US-Canada tariffs. The NZD lagged after the RBNZ hiked rates as expected overnight, although its OCR projections were lower than forecast. Elsewhere, Gold and Silver posted solid gains, while Bitcoin was broadly flat. Fed Governor Williams said that rates are in a good place to balance the Fed’s dual mandate and reiterated his support for the previous decision to hold, with future policy dependent on the totality of incoming data. On inflation, he identified tariffs and the Middle East conflict as the main sources of price pressure, alongside some services inflation, but sees no evidence of second-round effects and noted that inflation expectations remain well anchored. Recent inflation trends have been encouraging, and he sees inflation moving lower, although the Fed still needs confidence it is on a path back to 2%, while the labor market remains stable and solid. Williams attributed much of the rise in Treasury yields to the strong economy and surge in AI-related investment rather than inflation concerns, noting that higher investment could ultimately boost productivity and the neutral rate, although current data is not yet signalling a meaningful rise in the neutral rate. ADP national employment rose 38k in August from a revised lower 44k in July, and shy of the expected 47k. Job-stayers median change in annual pay was unchanged at 4.4%, while job-changers was 7.3% from July’s 7.5%. Private employers posted their slowest pace of job creation since January. Manufacturing, professional services, and information shed jobs, while education and health care, construction, and leisure and hospitality all showed solid hiring. ADP chief economist Richardson said that “Pay can tell us a lot about today’s choppy hiring. To understand hiring patterns, you have to look deeply into where pay growth is accelerating, where it’s slowing, and for whom. Once-predictable wage growth has been overtaken by the complexities of demographic change, persistent inflation, and AI’s effects on jobs.” Elsewhere Oil closed higher by 1% while Gold reversing some of Tuesday’s losses, closing higher by 1.23% last night.
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For anyone following my Platinum Service it made 410 points yesterday and is now ahead by 710 points for September after ending the month of August with a gain of 2645 points after closing July with a gain of 8031 points, after ending June with a new record of 10527 points after ending May with a loss of 1104 points, having ended April with a gain of 1730 points, 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 previous 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
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