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.
To mark my 3425th 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 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
Equities
The S&P 500 closed 0.46% higher at a price of 7666.
The Dow Jones Industrial Average closed 295 points higher for a 0.56% gain at a price of 53,061.
The NASDAQ 100 closed 0.23% higher at a price of 29,143.
The Stoxx Europe 600 Index closed 0.24% lower.
This Morning, the MSCI Asia Pacific closed 0.2% higher.
This Morning, the Nikkei closed 0.11% lower at 64,252.
Currencies
The Bloomberg Dollar Spot Index closed 0.08% lower.
The Euro closed 0.05% lower at $1.1584.
The British Pound closed 0.21% lower at $1.3485.
The Japanese Yen rose 0.72% closing at $158.92.
Bonds
U.K.’s 10-Year Gilt closed 1 basis points higher at 5.16%.
Germany’s 10-Year Bund Yield closed 1 basis points higher at 3.38%
U.S.10 Year Treasury closed 1 basis points higher at 4.80%.
Commodities
West Texas Intermediate crude closed 0.72% higher at $90.87 a barrel.
Gold closed 1.23% higher at $4381.10 an ounce.
This morning on the Economic front we have German, Euro-Zone and U.K. Services PMI at 8.55 am, 9.00 am and 9.30 am respectively. This is followed by Euro-Zone PPI at 10.00 am and U.S. Weekly Jobless Claims, Trade Balance and Non-Farm Productivity. Next, we have Services PMI at 2.45 pm and ISM Non-Manufacturing PMI at 3.00 pm. Finally, we have the Atlanta Fed GDP Now at 4.30 pm.
Cash S&P 500
Stocks finished the day higher, with the S&P 500 rising by 0.46%, while rates stalled along with Oil. Implied volatility measures were also lower overall. Meanwhile, realised volatility has sunk, with 21-day realised volatility falling to 7.4%, which equates to a daily move of about 46 bps. So, if the index starts moving by more than 46 bps per day, realised volatility will expand, and if daily moves contract further, realised volatility will continue to fall. It can still go lower, but unless we start trading in even tighter daily ranges, that is going to be difficult. Implied correlation also fell Wednesday, with Cboe’s 1-month index down to 10.6 and my own proxies lower. But the bigger picture is that implied correlation has been grinding higher since early July, even as realised volatility kept falling and single-stock volatility continued to drop. It is also worth remembering that implied correlations have historically remained very low. Index vol has been holding up better than the stocks beneath it for the past 2 months. Semiconductor implied volatility also fell on the day, even with Broadcom reporting results tonight, which I believe is due to a general lack of interest in the group. That is what is kind of odd here: the VIX has essentially stalled out since early August in a tight range, while realised volatility, single-stock volatility, and even semiconductor volatility have continued to fall. It suggests a couple of possibilities: either the VIX is going to fall to catch up with the decline in volatility, or investors are beginning to pay up for index-level hedges, even though you would not necessarily know it just by looking at the VIX. It just seems like a recipe for something to unwind here, and right now we are just looking for the trigger event. Perhaps it does not even need a trigger; perhaps now that Broadcom’s results are finished, the rest of that implied volatility will bleed out of the VIXEQ, and we will see single-stock volatility fall in the days to come. TBD. Anyway my ‘’Nothing Matters’’ theme continues as despite 10-Year Yields at 4.80% and Global Bond Yields at multi-year highs, American Indexes continue to attract buying on any dip. This makes it so difficult to be short. Frustratingly the S&P made a low at 7609 just four Handles above my 7605-buy level before rallying over 70 Handles in the afternoon and I am still flat. Today, I will raise my buy level to 7595/7620 with a higher 7579 ‘Closing Stop’. The S&P has short-term resistance from 7720/7745 where I will be a small seller with a 7771 tight ‘Closing Stop’. If I am taken long, I will have a T/P level at 7646. If I am taken short, I will have a T/P level at 7698. If this view changes, I will be back with a new update for my Platinum Members.
EUR/USD
I am still flat as the Euro again traded in a narrow range. The Euro has short-term support from 1.1410/1.1490 where I will continue to be a small buyer with the same 1.1345 ‘Closing Stop’. I will now lower my sell level to 1.1650/1.1730 with a lower 1.1805 ‘Closing Stop’. If I am taken long, I will have a T/P level at 1.1560. If I am taken short, I will have a T/P level at 1.1590.
Dollar Index
No Change: I am still long from last Friday at a price of 99.40. I will add to this position at 98.70 while leaving my 96.95 ‘Closing Stop’ unchanged. I will now lower my T/P level to 99.80. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
I am still flat as the Russell never came close to Wednesday’s buy range. The Russell has short-term support below from 2780/2860 where I will continue to be a buyer with a 2715 ‘Closing Stop’. I no longer want to be short the Russell at this time.
FTSE 100
It is amazing that Equity Markets are holding up especially as Gilt Yields touched 5.20% yesterday. Remember my most important rule of trading ‘A market that cannot fall on bad news has to be respected’. Today, I will continue to be a strong buyer on any further dip lower to 10600/10680 with a higher 10515 ‘Closing Stop’. If I am taken long, I will have a T/P level at 10750.
Dow Rolling Contract
The Dow was bid yesterday and I am still flat. Today, I will raise my buy level to 52300/52600 with a higher a 52055 ‘Closing Stop’. If I am taken long, I will have a T/P level at 52880.
Cash NASDAQ 100
Frustratingly the NDX missed Wednesday’s buy range by 30 points before rallying 290 points and I am still flat. With 10-Year Yields at 4.80% I just cannot see tech stocks remaining unscathed. However, I am afraid to go short as every dip no matter what the news is consistently bought. Ahead of the NFP tomorrow I will not chase the NDX higher. Therefore, I will continue to be a buyer from 28700/28900 with a higher 28595 tight ‘Closing Stop’. If I am taken long, I will have a T/P level at 29090. I still do not want to be short the NDX at this time.
December BUND
The Bund traded in a narrow range yesterday and I am still flat. The Bund has support from 120.60/121.30 where I will be an aggressive buyer with the same 119.85 ‘Closing Stop’. If I am taken long, I will have a T/P level at 122.10.
Gold Rolling Contract
Gold had a nice rally yesterday afternoon. As I wanted to bank some points for Wednesday, I exited my 4350 long position at my revised 4391 T/P level and I am now flat. Today, I will again be a buyer from 4250/4330 with a lower 4195 ‘Closing Stop’. If I am taken long, I will have a T/P level at 4395. 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 continue to be a buyer on any dip lower to 60.30/63.30 with the same 57.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 64.90.
Please Note: There will be no Daily Commentary tomorrow. Any of my calls that are not executed today and are subsequently triggered on Friday will see me return with updated emails for my Platinum Members.
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