U.S. Indices closed sharply higher on Monday, with the S&P 500 reclaiming 6,700, posting broad-based gains, though the NASDAQ 100 outperformed as AI names clawed back some recent losses. Communications jumped 4%, led by Alphabet after more upbeat commentary on its latest AI updates, while tech and consumer discretionary gained about 2.5% (led by Broadcom, AVGO +11%) and 2.0%, respectively. Support also came from firmer expectations of a December rate cut after Governor Waller reaffirmed backing for a 25 basis points move, and Daly (a 2027 voter) also endorsed such a reduction. Markets priced a December cut at a 76% probability, up from 56% on Friday after dovish remarks from Williams. The Dollar eased slightly, but the Dollar Index stayed above 100, with the Australian Dollar outperforming while the Japanese Yen shed part of Friday’s gains. Focus turns to US PPI and Retail Sales on Tuesday ahead of the Thanksgiving holiday on Thursday. Oil prices were bid despite reports of further progress on Ukraine-Russia peace talks, though details remain scarce and traders appear sceptical of meaningful advances. Gold gained through the session, tracking equities higher, while Bitcoin recovered some of last week’s losses but failed to break above USD 90k, holding at session highs into APAC trade. Separately, US President Trump and China’s President Xi held a call in which Trump accepted Xi’s invitation to visit Beijing in April and extended a reciprocal invitation for later in the year. Waller, the Fed Governor reiterated his case for a rate cut at the December meeting, saying data since the last FOMC shows not much change, with weakness seen in the labour market while inflation is not a big problem. While inflation has ticked up slightly, he expects it to start falling, estimating ex-tariff inflation at 2.4–2.5%. Waller described the September jobs number as likely to be revised down and noted its concentrated nature is not a good sign. He emphasised a meeting-by-meeting approach going forward, with January posing challenges due to a flood of new data. Stated tariff effects on inflation are modest and one-off, and reiterated that if the data rebounds, the Fed can be more cautious. The San Francisco Fed President (Daly) said in a WSJ interview that she backs a December rate cut, because she sees a sudden deterioration in the job market as both more likely and harder to manage than an inflation flare-up. “On the labour market, I don’t feel as confident we can get ahead of it.” “It’s vulnerable enough now that the risk is it’ll have a nonlinear change.” Concerning an inflation breakout, she noted that it is a lower risk given how tariff-driven cost increases have been more muted than anticipated earlier this year. Daly still believes the Fed can bring inflation back to its 2% target without an increase in unemployment. While the economy has settled in a “low-hiring, low-firing” equilibrium for some time, the 2027 voter sees greater risks that the balance ultimately would break in a negative direction. She added, “I’m not willing to assume our hands are tied next year” in a way that either forecloses the option to cut rates further if the economy weakens more abruptly or to raise rates “if that’s what’s needed.” Regarding the divergence amongst the FOMC, she said it reflects genuine uncertainty, not dysfunction. On the December meeting, Daly said the decision requires a judgment call about where the risks of not moving are, and where the risks of moving are. As such, Daly puts the risks of moving [rates down] a little bit lower than others, and the risk of not moving a little bit higher than others. Elsewhere, Oil closed higher by 1.58% and Gold by 1.76%.
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For anyone following my Platinum Service it made 40 points yesterday and is now ahead by 4212 points for November, 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 1.55% higher at a price of 6705.
The Dow Jones Industrial Average closed 202 points higher for a 0.44% gain at a price of 46,448.
The NASDAQ 100 closed 2.62% higher at a price of 24,239.
The Stoxx Europe 600 Index closed 0.14% higher.
Yesterday, the MSCI Asia Pacific closed 0.8% higher.
Last Friday, the Nikkei closed 2.42% lower at a price of 48,625.
Currencies
The Bloomberg Dollar Spot Index closed 0.03% higher.
The Euro closed 0.07% higher at $1.1520.
The British Pound closed 0.05% higher at $1.3106.
The Japanese Yen fell 0.33% closing at $156.88
Bonds
U.K.’s 10-Year Gilt closed 1 basis points lower at 4.54%.
Germany’s 10-Year Bund Yield closed 1 basis points lower at 2.71%
U.S.10 Year Treasury closed 4 basis points lower at 4.03%.
Commodities
West Texas Intermediate crude closed 1.58% higher at $58.98 a barrel.
Gold closed 1.76% higher at $4136.10 an ounce.
This morning on the Economic Front we have German GDP at 7.00 pm, followed by U.S. ADP Employment Change at 1.15 pm, and PPI and Retail Sales at 1.30 pm. This is followed by the House Price Index at 2.00 pm and Capacity Utilisation/Industrial Production at 2.15 pm. At 3.00 pm we have Pending Home Sales and the Richmond Fed Manufacturing Index at 3.00 pm. Finally, we have the Chicago Fed National Activity Index at 4.30 pm and a Five-Year Treasury Auction at 6.00 pm.
Cash S&P 500
The S&P and NDX surged on Monday, which was not much of a surprise as forecast in yesterday’s Daily Commentary. The frustrating thing was the S&P missed my 6600-buy level by 9 handles before closing 100 Handles higher. Monday was the 12th higher close out of the last 13 Monday’s and in the process left another large gap from Friday’s 6602 Chicago Close to Monday’s 6630 low print. Implied volatility levels were very elevated on the VIX 1-Day, and we have seen this play out several times in recent weeks—high levels of implied volatility collapse on Monday, fueling a rally. While the rally was a bit stronger than I expected, it still fit that pattern. At this point, implied volatility appears to have mostly reset, suggesting the market could stabilise on Tuesday, if not trade lower. Despite the S&P 500’s strength, the Equal Weight Index significantly underperformed, rising just 40 basis points on the day—a much weaker showing than the overall index. Most of the gains in the S&P 500 market-cap-weighted in were driven by Broadcom. Tuesday will mark the first of a few settlement dates over the next 5 to 6 trading sessions. Today is expected to see a settlement-related liquidity drain of about $14 billion, which is not a large amount. The larger drains will come on Friday and next Monday. More importantly, signs of strain are already emerging in the overnight funding market. Yesterday, the average repo rate at the DTCC rose to 3.99%—just below the 4% threshold—up from 3.93% on Friday, signalling tightening funding conditions. Additionally, with the reverse repo facility seeing minimal usage, it suggests that excess liquidity in the marketplace has largely been absorbed. That, in turn, implies we could see renewed downward pressure on stock prices as these Treasury settlements unfold over the coming sessions, starting today. The S&P has short-term resistance from 6750/6770 where I will be a small seller with a 6795 ‘Closing Stop’. I will now raise my S&P buy level to 6615/6635 with a higher 6597 ‘Closing Stop’. If I am taken short, I will have a T/P level at 6727. If I am taken long, I will have a T/P level at 6662.
EUR/USD
I am still flat as the Euro continues to trade in narrow ranges. The Euro has strong support from 1.1380/1.1450. I will leave my buy level unchanged in this range with the same 1.1285 ‘Closing Stop’. If I am taken long, I will have a T/P level at 1.1520.
Dollar Index
I am still flat. Today, I will raise my Dollar buy level to 98.60/99.40 with a higher 97.95 ‘Closing Stop’. If I am taken long I will have a T/P level at 99.90.
Russell 2000
The Russell rallied as expected on Monday, hitting my 2405 T/P level on my latest 2365 average long position and I am now flat. The rally should come as no surprise given the fact that the Russell hit its most oversold levels since the April lows. This morning the Index is trading at 2412. We have short-term support from 2330/2380 where I will again be a buyer with a lower 2285 ‘Closing Stop’. If I am taken long I will have a T/P level at 2425.
FTSE 100
In contrast to the American Indexes the FTSE traded heavy yesterday. This move lower saw my 9515-buy level triggered. I will add to this position at 9445 while leaving my 9375 ‘Closing Stop’ unchanged. I will now lower my T/P level to 9575. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
The Dow never came close to Monday’s buy range and I am still flat. Today, I will raise my buy level to 45710/46010 with a higher 445595 tight ‘Closing Stop’. If I am taken long, I will have a T/P level at 46280.
Cash NASDAQ 100
So much for the bears gaining some traction with last Thursday’s aggressive sell-off as the NDX has now rallied over 1000 points off Friday’s low. I am still flat. I know seasonality is strong this week, but I still do not believe that we have seen the lows yet especially as Inflation continues to remain stubbornly higher than many analysts expected. The NDX has short-term resistance from 25100/25300 where I will be a seller with a 25455 ‘Closing Stop’. If I am taken short, I will have a T/P level at 24930. If this view changes, I will be back with a new update for my Platinum Members.
December BUND
The Bund has literally not moved more than 60 points in a daily session over the past two months. I am still long the Bund at an average rate of 129.50 with the same 129.80 T/P level. Meanwhile, I will leave my 128.35 ‘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
Gold has surged since hitting a low on Friday at 4020. I am still flat. I will now raise my buy level to 4010/4030 with a higher 3988 ‘Closing Stop’. If I am taken long, I will have a T/P level at 4064.
Silver Rolling Contract
I am still flat. I will not chase the price of Silver higher believing there is more profit-taking to come. Today, I will continue to be a buyer on any further dip lower to 47.50/48.50 with the same 45.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 49.70.
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