U.S. Equity Markets started the new week in positive fashion led by the 2% gain in the NASDAQ 100. Federal Reserve speakers grabbed some of the headlines. San Francisco President Mary Daly said the case is building for a 50-basis point, or 0.5%, rate increase at the next policy meeting in May. She said she would like to see the central bank be more aggressive on the front end of raising rates, while New York Fed President John Williams said that he would like to see the Fed start to wind down its balance sheet in May. So, all indications are pointing to more tightening from the central bank at next month’s reading. One of the other big stories of the day was Tesla (TSLA) CEO Elon Musk’s new stake in Twitter (TWTR). Wall Street said Elon Musk’s 9.2% stake in Twitter highlighted the value proposition offered by a number of large-cap technology companies. Meta Platforms (FB) 14 times forward 12-month price-to-earnings (P/E) multiple stood out. At the same time, hedge funds remain under-exposed to technology stocks. So, the story highlighted the risk-to-reward opportunity in the space is skewed higher in the near term. That serves as a tailwind for tech stocks – and broader markets. The Twitter news sent shares soaring more than 20%, lifting other technology stocks alongside it. Within the S&P 500 Index, seven of the 11 sectors finished lower. European Markets closed higher. Russia’s lead negotiator Vladimir Medinsky said he did not share the same optimism as his Ukrainian counterparts about the near-term potential for a Presidential meeting. German Chancellor Olaf Scholz said Europe and the U.S. will impose more sanctions on Russia in the coming week and discuss ceasing energy imports immediately. European Central Bank Executive Board member Isabel Schnabel said high inflation is likely to prove persistent and interest rates could start to rise as soon as the fourth quarter. Euro-Zone Economic Sentiment fell to the lowest level since July 2020, as investors grew increasingly pessimistic about the outlook. In Asia, The People’s Bank of China said it will construct a more effective financial safety net to promote economic growth and stability. Japanese Prime Minister Fumio Kishida’s ruling coalition partner called on the Bank of Japan to pay closer to the weakening Yen, expressing economic growth concerns. China’s government sent military troops to the city of Shanghai for mass COVID-19 testing after it reported 9,000 new daily infections. Former Japanese Prime Minister Yoshihide Suga called for the government to enact a supplemental budget to support economic growth. Elsewhere, Oil rose 4% as French President Emmanuel Macron called for a ban of Russian oil, while Gold rose 0.6% despite the stronger Dollar.
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For anyone following my Platinum Service it lost 66 points yesterday, and is now ahead by 224 points for April after closing March with a gain of 5883 points. The Platinum Service made an impressive 5324 points gain in February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss, having made 2466 points in November, 1028 points in October, 2866 points in September, 1543 points in August, and 996 points in July. The Platinum Service made 1366 points in June, 1439 points in May, 1244 points in April, after ending March with an impressive gain of 3769 points. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 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 0.81% higher at a price of 4582.
The Dow Jones Industrial Average closed 103 points higher for a 0.3% gain at a price of 34,921.
The NASDAQ 100 closed 2.01% higher at a price of 15,159.
The Stoxx Europe 600 Index closed 0.8% higher.
Yesterday, the MSCI Asia Pacific Index fell 0.1%.
Yesterday, the Nikkei closed 0.25% higher at a price of 27,736.
Currencies
The Bloomberg Dollar Spot Index closed 0.4% higher.
The Euro closed 0.4% lower at $1.0971.
The British Pound closed 0.1% higher at 1.3149.
The Japanese Yen rose 0.1%, closing at $121.70.
Bonds
Germany’s 10-year yield closed five basis points lower at 0.51%.
Britain’s 10-year yield closed eight basis points lower at 1.54%.
US 10 Year Treasury closed one basis points lower 2.38%.
Commodities
West Texas Intermediate crude closed 4% higher at $103.62 a barrel.
Gold closed 0.6% higher at $1932.10 an ounce.
This morning on the Economic Front we have German Euro-Zone and U.K. Markit Composite PMI at 8.55 am, 9.00 am and 9.30 am respectively. This is followed by U.S. Trade Balance at 1.30 pm. Next, we have Composite PMI at 2.45 pm and ISM Services PMI at 3.00 pm. Finally, we have speeches from Fed Members Brainard and Kashkari starting at 3.00 pm.
Cash S&P 500
Apparently, Elon Musk buying 9.2% of Twitter Shares was the signal to pile into Technology Stocks as Apple, Google and Microsoft ended yesterday’s session with gains of 2.25%, 2.15% and 1.59% respectively. I mentioned in yesterday’s commentary that S&P has become tricky to trade. This move higher saw the S&P hit my sell range into the close and I am now short in small size at 4583. I will add to this position at 4603 with a now fixed 4619 stop. However Internally the market was weak yesterday as shown by the McClellan which closed lower at + 147 last night. Market Cap to GDP is still at an astounding 191% which is not sustainable as everyone is expecting a positive April given the fact that we have seen positive Aprils’ in 15 of the last 16 years as mentioned last week. With Inflation running close to 8% the Fed are way behind the curve and as I mentioned yesterday I do not believe that Powell has the stomach to raise rates to 3%, never mind 5% that is needed or he will have driven the U.S Economy into a severe recession. I am looking for any continuing strength in April to get a more Macro short-position on board. The background is bearish as the Fed is so far from reality while Consumer Confidence is near 20-year lows given the high inflation. I will have a T/P position on my S&P short at 4568. The S&P has support from 4520/4535 and I will now raise my buy level to this area with a higher 4503 stop. If I am taken long I will have a T/P level at 4551.
EUR/USD
Unfortunately, I was stopped out of my 1.1095 long Euro position at my tight 1.1029 level and I am now flat. This morning the Euro is trading lower at 1.0970. The Euro has resistance from 1.1030/1.1080 where I will be a small seller with a 1.1105 stop. The Euro has support from 1.0845/1.0895 where I will be an aggressive buyer with a 1.0789 stop.
March Dollar Index
I am still flat as the Dollar rallied a further 0.4% yesterday. I will now raise my buy level to 98.10/98.60 with a tight 97.75 stop.
Cash DAX
I am still flat as the DAX again fell shy of my sell range despite the 2% gain in the NDX. Today, I will now raise my sell level to 14670/14770 with a higher 14855 stop. I no longer want to be long the DAX at this time.
Cash FTSE
No Change. The FTSE again traded in a narrow range yesterday and I am still flat. I will continue to be a seller on any further rally to 7610/7670 with the same 7705 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 7565.
Dow Rolling Contract
Unfortunately, the Dow just missed my initial 34550 buy level before rallying 300 points and I am still flat. With Financials continuing to struggle, just like the S&P above I will use strength in the Dow to get a Macro Short position on board. The Dow has resistance from 35100/35300 where I will be a strong seller with no stop for now. Meanwhile, I will leave my 34300/34550 buy level unchanged with again no stop for now.
Cash NASDAQ 100
The NASDAQ led both the S&P and Dow higher yesterday as thankfully we had no sell level in the NDX and are still flat. The NDX has short-term resistance from 15320/15420 where I will be a small seller with a 15505 tight stop. I no longer want to be long the NDX at this time.
June BUND
The Bund never came close to yesterday’s buy level as the rally which started on Thursday gained more traction yesterday, closing higher at 159.26. With Germany announcing that food prices will have to rise by 25/50% it shows how far behind the curve the ECB are as they have no clue with their continued policy of buying bonds. I said last week that Lagarde and the Board should all be sacked as they are way out of their league with their ‘’Transitory’’ Inflation stance. The Bund has support from 158.00/158.60 and I will now raise my buy level to this area with a tight 157.55 stop.
Gold Rolling Contract
Gold tried to sell-off again yesterday, before a late rally saw Gold close higher at 1932. I am still flat and this morning I will leave my 1893/1908 buy level unchanged with the same 1881 tight stop.
Silver Rolling Contract
I am still flat and today I will lower my buy level to 23.20/23.80 with a lower 22.75 stop.
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