U.S. Indices chopped on Tuesday as eyes turn to the FOMC on Wednesday but the Russell outperformed while Dow Jones lagged. Dow weakness ensued after JPM’s Lake gave some Q4 guidance – IB revenue up low-single digits, and markets revenue up low teens. This hit JPM shares and also weighed on the Financial sector. Energy, Consumer Staples, and Consumer Discretionary sectors outperformed, while Health Care, Industrials and Real Estate underperformed – Financials also closed lower. T-Notes flattened in response to the September and October JOLTS report, which saw a notable increase from August – rising to 7.67 million in October from 7.23 million in August – well above the 7.15 million forecast. This saw traders pare rate cut bets in 2026, but December pricing was little changed – participants still price an 88% probability of a 25bps rate cut this evening. The data also gave a helping hand for the Buck, while the Japanese Yen lagged following the 7.6 magnitude in Japan overnight. The Australian Dollar outperformed after the RBA, which held rates as expected, but Governor Bullock leant hawkish. She said the outlook is for an extended pause, or hike, and does not see rate cuts in the foreseeable future. Oil prices settled lower with focus remaining on Russia/Ukraine, where Zelensky said Ukraine and Europe are ready to present a peace plan to the US. Meanwhile, Trump told Zelensky he wants Ukraine to agree to ceasefire by Christmas, and Zelensky sees leader level talks with the US next week. Gold and silver prices were bid, particularly the latter which rose above USD 60/oz to fresh record highs, from an earlier lower of 57.62. Note, there was a lot of focus on US/Sino relations – where the US is to approve NVIDIA (NVDA) H200 chip exports to China, but under special security reviews, while China will reportedly limit the imports. Elsewhere, CNBC reported that China is buying US soybeans again but falling short of the goal set by the Trump trade agreement. The October and September JOLTS report was released, which saw the September print jump to 7.658 million from August’s 7.227 million print, before rising further in October to 7.670 million. Meanwhile, the Vacancy rate rose to 4.6% in September from 4.3% in August, and was unchanged in October at 4.6%. The quits rate rose to 2.0% in September from 1.9% in August, but fell to 1.8% in October. The data shows an improvement in the state of the labour market from the end of summer, with JOLTS rising, which could support the case of the hawks, but Oxford Economics highlight the rise in the layoff rate could embolden calls from the doves – the layoff rate rose to 1.2% in October, from 1.1% in September and August, albeit it has been within a 1.0-1.2% range since December 2022. Oxford Economics also point out that “The difference between the number of hires and separations, a proxy for the next change in nonfarm employment at the end of October, was 99,000. This points to another healthy gain in nonfarm payrolls in October, at least in the private sector.” October NFP will be released on December 16th, alongside the November report, but there will be no October unemployment rate. The Federal Reserve is widely expected to cut rates by 25bps to 3.50-3.75%, with Fed money markets currently pricing in an 88% chance of such an outcome, and this comes despite widening divisions among policymakers. The latest cut would follow Octoberʼs reduction, although Chair Powell cautioned then that a December cut was far from assured and gave an analogy that “driving in the fog, you could slow down”. Given the Government shutdown, key data has been delayed, and little has been seen since the prior meeting, but in the following week, we will see the October and November NFP, the November Unemployment rate, and the November CPI. Although markets are heavily pricing in a cut, it is a close call as shown by expected votes, and given this, there is a widely held view that it will be a “hawkish cut”. JPM generally agrees with this view and adds that one way this could be conveyed would be for the statement to mimic last yearʼs forward guidance. Last Novemberʼs statement referenced “In considering additional adjustments…” which was followed by a cut in December, and then the Dec. statement was adjusted to say “In considering the extent and timing of additional adjustments…” which was followed by a pause in rates until September 2025. By reverting to the extent and timing guidance, the Committee could hint at a pause in the coming January meeting. Ahead, Rabo Bank expects the Fed to continue its cutting cycle at least until its estimate of the neutral rate is reached. Elsewhere, Oil closed lower by 0.85% while Gold ended Tuesday’s session with a gain of 0.5%
To mark my 3300th 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 was flat yesterday and is still ahead by 1062 points for December 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 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 0.09% lower at a price of 6840.
The Dow Jones Industrial Average closed 179 points lower for a 0.38% loss at a price of 47,560.
The NASDAQ 100 closed 0.16% higher at a price of 25,668.
The Stoxx Europe 600 Index closed 0.10% lower.
This morning, the MSCI Asia Pacific closed 0.3% higher.
This morning, the Nikkei closed 0.1% lower at a price of 50,602.
Currencies
The Bloomberg Dollar Spot Index closed 0.15% higher.
The Euro closed 0.09% lower at $1.1625.
The British Pound closed 0.14% lower at $1.3298.
The Japanese Yen fell 0.67% closing at $156.92
Bonds
U.K.’s 10-Year Gilt closed 3 basis points lower at 4.50%.
Germany’s 10-Year Bund Yield closed 1 basis points lower at 2.86%
U.S.10 Year Treasury closed 2 basis points higher at 4.19%.
Commodities
West Texas Intermediate crude closed 0.85% lower at $58.38 a barrel.
Gold closed 0.47% higher at $4209.10 an ounce.
This morning on the Economic Front ECB President speaks at 11.00 am. Next, we have U.S. MBA Mortgage Applications at 12.00 pm and the Employment Cost Index at 1.30 pm. At 2.45 pm we have the Bank of Canada Rate Decision. Finally, we have the FOMC Rate Announcement at 7.00 pm followed by the Fed Chair Powell Press Conference at 7.30 pm.
Cash S&P 500
I am expecting a contentious meeting of the FOMC when the Statement is announced at 7.00 pm. The Committee will cut rates by 25 basis points to a range between 3.5% and 3.75% amid a strong dissent over the risk of inflation. On one side will be one or more members who will oppose any rate cuts while the other will have Governor Miran pushing for a 50-basis point cut. And the debate will only continue as members make their case publicly in the days and weeks to come. As is often the case when Fed Chair Powell adopts a hawkish view, one should anticipate volatility in asset prices with declines in equity prices as he lays out his risks to the economy. Whatever decisions the Fed makes, the path forward is fraught with risk should inflation remain sticky or rise as monthly job creation remains soft. I do not expect the Fed to update its plans for the end of QT or reserve management purchases at this meeting with any announcement on the latter likely to be part of the March 18 meeting next year. Yesterday’s session was a non-event as markets are on ‘HOLD’ ahead of this evening’s FOMC Statement and key press conference with Powell at 7.30 pm. Today, I will leave my sell level unchanged from 6875/6895 with no stop. The S&P has short-term support from 6770/6790 where I will be a strong buyer with a 6753 tight ‘Closing Stop’. If I am taken short, I will have a T/P level at 6848. If I am taken long, I will have a T/P level at 6822. If these views changes, I will be back with a new update for my Platinum Members.
EUR/USD
The Euro continues to trade in narrow ranges and I am still flat. The Euro has resistance from 1.1690/1.1760 where I will be a small seller with a 1.1815 ‘Closing Stop’. Meanwhile, I will continue to be a buyer on any dip lower to 1.1440/1.1510 with the same 1.1375 ‘Closing Stop’. If I am taken short, I will have a T/P level at 1.1615. If I am taken long, I will have a T/P level at 1.1570.
Dollar Index
No Change: The Dollar Index has traded in a narrow 120-point range for most of the past six weeks. The Dollar continues to hold above the key 97.00/98.00 support zone before briefly rallying above 100. If the Dollar can move back above 100, I would be more confident of the completion of a base. Resistance is from 99.60/100.20 which is derived from the last three intermediate swing lows. Beyond that, 101.65/104.91 represents a Fibonacci 38.2%-61.8% retracement of this year’s January-July decline. Regarding support, the 96.22-96.38 range is a Double Bottom. A breakdown (which I do not expect) would allow for further weakness toward the 93.50 area which is the top from the late 2020/early 2021 bottom formation. I am still long the Dollar from last week at 99.20 with the same 99.50 T/P level. I will continue to look to add to this position on any further move lower to 98.40 while leaving my 97.95 ‘Closing Stop’ unchanged. 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 short the Russell from last week at a price of 2505. I will add to this position at 2565 with the same 2605 ‘Closing Stop’. The Russell is short-term overbought having risen 8.7% in the past 10 days which is an insane move. Today, I will raise my T/P level to 2480. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
FTSE 100
I am still flat. The FTSE continues to trade heavy albeit in extremely narrow ranges. Today, I will continue to be a buyer on any dip lower to 9500/9570 with the same 9430 ‘Closing Stop’. If I am taken long, I will have a T/P level at 9630. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
I am still flat as the Dow never came close to Tuesday’s sell range. I will not chase the Dow lower as I continue to be a seller from 48150/48450 with the same 48605 tight ‘Closing Stop’. If I am taken short, I will have a T/P level at 47880. If this view changes I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
I am still flat the NDX. Today, I will continue to be a seller on any further rally to 25760/25960 with the same 25105 ‘Closing Stop’. If I am taken short I will have a T/P level at 25610. I still do not want to be long the NDX at this time.
December BUND
I am still long the Bund at 127.30 with the same 127.90 T/P level. I will add to this trade at 126.60 while leaving my 125.95 ‘Closing Stop’ unchanged. 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: I do not like the price action in Gold and is the main reason that I have not been chasing the market higher. Gold has short-term support from 4060/4090. Today, I will continue to be a buyer on any dip to this area with the same 4035 ‘Closing Stop’. If I am taken long, I will have a T/P level at 4114.
Silver Rolling Contract
Silver close above $60 yesterday following a 4.5% rise to new all-time highs. Silver has the highest extreme in bullish sentiment in 37 years. Given the vertical move higher in Silver I have no interest in buying the market at this time. My own view is that when markets correct over the next few weeks everything will be sold including both Gold and Silver. Once the precious metals correct, they should attract strong buying especially Silver which I would then expect to soar. A 25% correction from current highs would see the price fall to $43 which is a previous high and any tag would be a great buying opportunity. Despite my bearishness in Silver I do not want to be short as I learnt my lesson in trying to short Gold in October. Therefore, I will stay flat Silver for now and let’s see how this inflated market plays out over the coming days/weeks. If this view changes, I will be back with a new update for my Platinum Members.
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