U.S. Equity Markets surged on Monday with notable gains across major indices, particularly the Nasdaq 100 with strong outperformance in the Tech sector led by gains in Semiconductors, namely Nvidia (NVDA) after a slew of updates from the CES conference. AMD (AMD) also saw notable gains. There were several healthcare updates too amid the JPM HealthCare conference, including in M&A. Notably, Novartis (NVS) is to buy Cytokinetics (CYTK), according to WSJ. Merck (MRK) is to buy Harpoon (HARP) and Johnson & Johnson (JNJ) is to buy Ambrx (AMAM). Boston Scientific (BSX) to buy Axonics (AXNX). Yields were lower across the curve, as was the Dollar in the wake of the New York Fed Survey of consumer inflation expectations posting declines across all forecast horizons. There was also a dovish call from Bank of America, who looked for a 25bp cut in March alongside announcing plans to begin tapering the runoff of U.S. Treasury holdings. The Fed’s Bostic, however, suggested the current pace of balance sheet normalisation is appropriate, although Fed Member Logan over the weekend said she thinks it is appropriate to consider the parameters that will guide a decision to slow the runoff of their assets, as was alluded to by “several” participants in the latest FOMC Minutes. Oil prices sold off throughout the session after Saudi cut its OSPs in what desks are labelling as a sign of weak demand. Elsewhere in FX, the Japanese Yen was supported by lower U.S. rates, as was the Swiss Franc, but also alongside a hot Swiss CPI report. The NY Fed’s December Consumer Survey saw inflation expectations dip across the forecast horizons. One-year inflation expectations fell to 3% from 3.4% in November, the lowest since January 2021 and nearing the series’ pre-2020 average of 2.8% (inception in 2014); the gauge never rose above 3% between August 2014 and February 2021. Three-year inflation expectations fell to 2.6% from 3.0%, the lowest since June 2020 and comfortably beneath the pre-2020 series average of 2.9%. Five-year inflation expectations, which were introduced in January 2022, fell to 2.5% from the prior month’s 2.7%, the lowest since March 2023 and in the middle of the series’ range of 2.00-3.00%. For comparison, the University of Michigan’s December consumer inflation expectations saw the 1yr-ahead gauge fall to 3.1% from 4.5% and the 5-10yr gauge fall to 2.9% from 3.2%. Other highlights in the NY Fed’s survey include expected earnings and spending climbing at their lowest levels since 2021. Elsewhere, Oil closed 4.04% lower while despite a weaker Dollar, Gold fell 0.9%.
To mark my 2925th 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 295 points yesterday and is now ahead by 1053 points for January. December saw a gain of 1890 points after finishing November with a gain of 1734 points. October ended with a gain of 3184 points, after closing September with a small gain of 228 points, after finishing August with a gain of 1485 points, following a small gain of 285 points gain in July, after closing June with a gain of 2683 points. May closed with a gain of 3205 points. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made a record 9619 points last October. 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 1.41% higher at a price of 4763.
The Dow Jones Industrial Average closed 216 points higher for a 0.58% gain at a price of 37,683.
The NASDAQ 100 closed 2.11% higher at a price of 16,649.
The Stoxx Europe 600 Index closed 0.38% higher.
This morning, the MSCI Asia Pacific closed 0.4% lower.
This morning, the Nikkei closed 1.16% higher at a price of 33,763.
Currencies
The Bloomberg Dollar Spot Index closed 0.15% lower.
The Euro closed 0.15% higher at $1.0954.
The British Pound closed 0.2% higher at 1.2751.
The Japanese Yen rose 0.3% closing at $144.11.
Bonds
Germany’s 10-year yield closed 2 basis points lower at 2.14%.
Britain’s 10-year yield closed 2 basis points lower at 3.77%.
U.S.10 Year Treasury closed 1 basis points lower 3.99%.
Commodities
West Texas Intermediate crude closed 4.04% lower at $70.83 a barrel.
Gold closed 0.9% higher at $2028.10 an ounce.
This morning on the Economic Front we already had the release of German Industrial Production which fell 0.7% versus +0.2% expected. Next, we have Euro-Zone Employment Rate at 10.00 am. This is followed by U.S. NFIB Business Optimism at 11.00 am and the Trade Balance at 1.30 pm. Finally, we have a Three-Year Treasury Auction at 6.00 pm.
Cash S&P 500
The 30-Day Moving Average is proving to be strong support. Three times last week, including yesterday this trendline has held. My S&P plan worked well as the market traded lower to my 4680 buy level before surging 80 Handles. As I want to bank points when available, I covered this position at my revised 4693.50 T/P level and I am still flat. Bears had every chance to build on last week’s sell-off but no joy as the three American Indexes just ripped higher for the whole session. Markets are continuing to ignore the many negative scenarios from political volatility (Presidential Election in November) ongoing wars, lag effects from all the rate hikes in 2023 and of course the ridiculous debt pile that makes one wonder when the S&P is going to break. The Debt Level is now at $34 Trillion with $11 trillion added alone in the past three years. The upper trendline has a target level of 5800 for the S&P. With peak tightening behind us, there is a massive wall of liquidity waiting to hit the markets. Anytime there is a hint of a sell-off as we saw last week. Treasury Secretary Yellen is immediately out talking about a ‘’Soft Landing’’. There is no doubt ahead of the Presidential Election massive liquidity will be injected into the market. History tells us that while the 4th year of a decade may be challenging especially in an Election Year, the fifth year is decidedly bullish. My plan this year is to be a buyer of dips and to only short when markets are severely extended to the upside. Yesterday’s aggressive rally sees the 15 Minute RSIs extended for both the S&P and the NDX. The S&P has support from 4726/4741 where I will be a buyer with a 4713 ‘’Closing Stop’’. I still do not to be short the S&P at this time. If this view changes I will be back with a new update for my Platinum Members.
EUR/USD
No Change. The Euro traded in a narrow range yesterday and I am still flat. I will not chase the Euro higher, keeping my 1.0820/1.0890 buy level unchanged with the same 1.0765 ‘’Closing Stop’’. I still do not want to be short the Euro at this time.
Dollar Index
The Dollar traded in a narrow 30-point range yesterday and I am still flat. The Dollar has strong support from 101.00/101.80 where I will still be a buyer with the same 100.65 ‘’closing Stop’’. I no longer want to be short the Dollar. If this view changes, I will be back with a new update for my Platinum Members.
Cash DAX
The DAX surges yesterday and I am still flat as I have had no interest in being short this market. No matter what the economic news buyers continue to buy every dip. This morning the DAX is trading a further 140 points higher from where I marked price yesterday morning at a price of 16720. I will now raise my buy level to 16510/16610 with a higher 16435 ‘’Closing Stop’’.
Cash FTSE
The FTSE continues to trade heavy, and I am still flat as the market never came close to Thursday’s sell range. With the FTSE trading slightly higher at 7710 this morning, I will now raise my sell level to 7770/7840 with a higher 7905 ‘’Closing Stop’’. I still do not want to be long the FTSE at this time.
Dow Rolling Contract
The Dow rallied over 400 points into the close from yesterday morning’s lows. This move higher saw the Dow hit my 37670-sell level before selling off to my revised 37620 T/P level as emailed to my Platinum Members and I am now flat. For those of you who are still short, I would look to cover this position and be flat ahead of the Cash Opening this afternoon. The 14-Day RSI closed higher at 71 last night meaning the Dow is still overbought. The Dow has further resistance from 37800/38050 where I will be a small seller with a higher 38305 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 37650.
Cash NASDAQ 100
Wow! A incredible 400 point rally in the NDX yesterday from where I marked prices 24 hours ago. With Apple shares falling 10% last week, history tells us that this is not sustainable for the world’s largest stock without having some bounce back. Monday’s move higher saw my 16430 T/P level triggered on my latest 16320 long position and I am now flat. This morning, the NDX is trading at 16600. We have support below from 16370/16520 where I will again be a buyer with a higher 16255 ‘’Closing Stop’’. Despite the NDX being short-term overbought I have no interest in being short this market. If this view changes, I will be back with a new update for my Platinum Members.
March BUND
Unfortunately, the Bund missed my initial 135.10 buy level by 8 points before having a nice 70-point rally into the close. I will not chase the Bund higher, leaving my 134.30/135.10 buy level unchanged with the same 133.75 ‘’Closing Stop’’. I still no longer want to be short the Bund at this time.
Gold Rolling Contract
Frustratingly, Gold missed yesterday’s buy level by just 1$ before having a 15$ rally into the New York close. As I am long Silver, I will not chase the price of Gold higher, leaving my 2000/2015 buy level unchanged with the same 1999 ‘’Closing Stop’’. I still do not want to be short Gold at this time.
Silver Rolling Contract
No Change. I still believe in the bull case for this precious metal. I will continue to hold my 24.40 average long position with no stop or T/P level for now. If this view changes, I will be back with a new update for my Platinum Members.
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