U.S. Indices tumbled on Monday while the Treasury curve steepened in response to further pressure from US President Trump on Fed Chair Powell to lower interest rates. It remains to be seen if the President can fire Powell, but NEC Director Hassett suggested Trump is studying ways on how to do this. The fears of killing Fed independence from the government sparked the risk off session, but the front-end of the curve saw yields fall as it started to price in potentially earlier rate cuts, but the longer end of the curve saw yields rise with fears of cutting rates too-early would boost inflation. The downside in equities was steep with indices lower by 2.4% across the board, with slight underperformance in the NASDAQ 100 with reports that Huawei is readying a new AI chip for mass shipments as China looks for alternatives to Nvidia (NVDA) hitting the chip sector. On China, Trump said the US is having nice conversations with China, while China’s MOFCOM issued a statement, noting it is firmly opposed to any party striking a deal with the US at the expense of China, and if a situation arises, it will respond. Oil prices saw two-way trade with downside on the risk off environment with ongoing trade fears still weighing, while there were also hopes for progress between US and Iran, after Trump said he had a good meeting with Iran. He also suggested we could see a Ukraine/Russia deal this week. However, oil settled off lows with upside continuing post settlement, with Israeli press reporting the Air Force conducted drills simulating another Iranian missile attack in case talks between the US and Iran collapse. In FX, the Dollar was sold to the benefit of G10 peers on the aforementioned Trump criticisms of Powell, with both havens and cyclicals performing well against the Dollar, but CAD was hampered by weaker oil prices. Gold continues to benefit from the uncertain environment under the new administration, with the yellow metal hitting fresh record highs. Note, with UK and EU players were away for Easter Monday, and as such volumes lower than usual. Attention this week turns to Global Flash PMI data, earnings and central bank speakers. On earnings, highlights this week include VZ, TSLA, T, BA, IBM, PEP, MRK, PG, INTC, GOOGL. The Chicago Fed President (Goolsbee) said that short-run inflation expectations are up, but long-term expectations are not rising. He noted the impact of tariffs on the macro economy could be modest, and in response to calls for a pre-emptive cut, Goolsbee said “we do not know what the impact on the supply chain will be”. He reiterated his view that rates will be lower in 12-18 months, adding they need to wait it out and figure out what to do. He stressed it would be difficult if both sides of the Fed’s mandates were to go wrong, it is also about the magnitude and how long it lasts. On Fed independence, he said it is important, and noted the Fed Chair is the most important person at the table, their opinion carries a lot of weight. Elsewhere, Oil closed 1.8% lower while Gold surged a further 3%, closing above $3430 and yet another new-all-time high.
To mark my 3175th 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 525 points yesterday and is now ahead by 6980 points for April 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 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 2.38% lower at a price of 5158.
The Dow Jones Industrial Average closed 971 points lower for a 2.48% loss at a price of 38,170.
The NASDAQ 100 closed 2.46% lower at a price of 17,808.
The Stoxx Europe 600 Index closed 0.13% lower.
Yesterday, the MSCI Asia Pacific closed 0.7% lower.
Yesterday, the Nikkei closed 1.31% lower at a price of 34,279.
Currencies
The Bloomberg Dollar Spot Index closed 1.09% lower.
The Euro closed 1.07% higher at $1.1518.
The British Pound closed 0.63% higher at 1.3378.
The Japanese Yen rose 1.06% closing at $140.70.
Bonds
Germany’s 10-year yield closed 2 basis points lower at 2.47%.
Britain’s 10-year yield closed 4 basis points lower at 4.57%.
U.S.10 Year Treasury closed 13 basis points higher at 4.40%.
Commodities
West Texas Intermediate crude closed 1.82% lower at $63.50 a barrel.
Gold closed 2.98% higher at $3427.10 an ounce.
This morning on the Economic Front we have no data of note from either the U.K. or the Euro-Zone. Fed Members Jefferson and Harker are speaking at 2.00 pm and 2.30 pm respectively. At 3.00 pm we have Euro-Zone Consumer Confidence and the Richmond Fed Manufacturing Index. Finaly, we have a Two-Year Treasury Auction at 6.00 pm, followed by speeches from Fed Members Kashkari at 7.00 pm and Kugler at 11.00 pm.
Cash S&P 500
My S&P plan worked well on Thursday but not so well yesterday. On Thursday morning the S&P rallied to my 5312 T/P level on my latest 5286 average long position. Subsequently, I emailed my Platinum Members to buy the market again at a price of 5260 before the S&P rallied to my 5297 T/P level. Yesterday, I bought the S&P again at an average rate of 5221 before getting stopped out of this position at 5166 and I am now flat. The S&P hit a low at 5100 on two occasions yesterday afternoon before thankfully rallying into the close. This recovery saw implied volatility drop, triggering the end-of-day short-covering rally that helped transform what was nearly a 3.5% loss on the S&P into a more modest 2.4% decline. In my opinion as long as the S&P cannot recover the key 5500 resistance level then we are heading to new lows for the year. The next major support level is from 4500/4650 where I will be an aggressive buyer on any test with no stop. The Trump policy of devaluing the Dollar is not working as any policy that devalued the Dollar or sought to end its status as the world’s reserve currency would harm American businesses and consumers. Those ideas, when translated into policies like the new tariff regime, are causing a general de-risking among large institutional investors and global central banks. The notion that the U.S. could start a multifront trade war on both its allies and adversaries without any collateral damage to the American economy dollar-denominated assets was always misguided. The stress in the markets is the result of a private sector balance sheet crisis-over leveraged hedge funds-that is draining liquidity from the market. Given the damage caused in the past few weeks even a U-TURN by the Trump Administration will only result in a temporary respite as the reputational damage is enormous and will take months to recover. Short-term the S&P has support from 5080/5110 where I will be a buyer with a 5063 ‘Closing Stop’. If I am taken long, I will have a T/P level at 5137.
EUR/USD
The Euro traded the whole of Thursday’s sell range for a now 1.1540 average short position. I will leave my 1.1635 ‘Closing Stop’ unchanged. I will now raise my T/P level on this position to 1.1430. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
The Dollar fell a further 1.1% on Monday in what turned out to be another turbulent trading session marked by heightened volatility and a rush to exit U.S. Assets. The American Markets will not stabilise until we see the Dollar reverse some of its 13% fall over the past four weeks. Given where USD/JPY is trading today, the move might have considerable room, especially since USD/JPY is once again approaching critical support in the 140 to 141 range. If that support breaks, we could see further significant strength in the Yen. Monday’s aggressive sell-off saw my second buy level at 98.70 triggered for a now 99.05 average long position. I will leave my 97.95 ‘Closing Stop’ unchanged while lowering my T/P level to 99.70. 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 long the Russell from last week at a rate of 1850. I will continue to look to add to this position on any further move lower to 1780. Meanwhile, I will leave my 1910 T/P level unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
FTSE 100
On Thursday, the FTSE rallied to my 8280 latest sell level before trading lower to my revised 8240 T/P level and I am still flat. Today, I will again be a seller on any further rally to 8300/8380 with a higher 8455 ‘Closing Stop’. I still do not want to be long the FTSE at this time. If I am taken short, I will have a T/P level at 8235.
Dow Rolling Contract
Wow! The Dow is lower by almost 2000 points since I marked prices on Thursday morning. Thankfully we had no buy level in this market given the sustained sell-off. The Dow hit an afternoon low at 37830 before rallying 300 points into the close. With sentiment at levels that we normally associate with ‘Bottoms’ I will be a small buyer from 37600/37850 with a 37395 tight ‘Closing Stop’. If triggered, I will have a T/P level at 38200. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
My NDX plan worked well on Thursday. The NDX rallied to my 18360 T/P level on my latest 18160 long position. Subsequently, I bought the NDX again at a price of 18150 as emailed to my Platinum Members before the market rallied to my 18390 T/P level. Yesterday, the NDX sold off further. I am now long at an average rate of 17920 with a lower 17595 ‘Closing Stop’. I will have a T/P level on this position at 18130. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
On Thursday the Bund rallied to my 132.20 sell level before trading lower to my revised 131.88 T/P level and I am now flat. I cannot see Bund Yields continuing to trade as low as they are while Treasury Bond Yields are rising substantially. Today, I will again be a seller of the Bund from 132.60/133.60 with a higher 134.35 ‘Closing Stop’. If I am taken short, I will have a T/P level at 131.90.
Gold Rolling Contract
The Surge in Gold is getting silly as the market continues to build value outside both its Daily and Weekly Bollinger Bands. However, as long as Central Banks are continuing to sell the Dollar it is difficult to have a short Gold position despite the market trading at one of the most overbought readings for a main asset class that I have ever seen. I will continue to stay flat the Gold Market until the volatility stabilises. If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
My Silver plan worked well as the market sold off to my 32.10 buy level before rallying to my 32.50 revised T/P level and I am still flat. Silver has support below from 30.80/31.70 where I will again be a buyer with the same 29.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 32.40.
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