U.S. Indices closed little changed on Monday, although outperformance was seen in the NASDAQ 100 thanks to gains in the Tech and Consumer Discretionary sectors. On the flipside, Utilities, real Estate and Consumer staples underperformed while overall breadth was weak as the large-cap stocks kept indices bid. Equities were bid at the open but sold off throughout the last few hours of trade with little fresh news driving price action. Participants are still cognizant of the soft labour market report seen last Friday, ahead of inflation data this week. T-notes were firmer across the curve, but much more so in the long-end, seeing the curve bull flatten mid Trump naming Waller, Warsh and Hassettt as final three Fed Chair Picks. In FX, Antipodes outperformed while the Dollar and Japanese Yen lagged, with the Yen pressured by Japanese PM Ishiba resigning as leader of the LDP, and as such resigning from the PM role. Crude prices were bid as the OPEC-8 lifted production, albeit at a slower pace of increase of 137k bpd (as touted), while reports of fresh Russia sanctions from the US and EU also supported the upside. Although crude prices settled well off earlier peaks after Saudi Arabia cut October OSPs to NW Europe and Asia, while maintaining prices to the US from September. Gold prices continued to advance to a fresh record high on rate cut expectations, geopolitics, and dollar weakness. Attention this week turns to the BLS Benchmark Payroll revisions on Tuesday, PPI on Wednesday, CPI on Thursday, as well as the Senate Banking panel vote on Fed Governor Nominee Miran. Treasury traders will also be watching 3-, 10- and 30-year supply throughout the week. The New York Fed Survey of Consumer Expectations for August saw inflation expectations tick up at the short-term horizon and remained unchanged at the medium- and longer-term horizons. Unemployment and job loss expectations worsened. Job finding expectations declined to a series low. Spending and household income growth expectations remained broadly unchanged. Specifically, median one-year ahead inflation expectations rose 0.1% to 3.2%, but the three-year and five-year forecast horizons were unchanged at 3.0% and 2.9%. Inflation uncertainty increased for the one and three-year horizons, but declined for the five-year horizon. Home price growth was unchanged at 3.0%. On the labour market, one-year ahead earnings growth expectations fell by 0.1% to 2.5%, below the 12-month average of 2.8%. Mean unemployment expectations rose by 1.7% to 39.1%, above the 38.1% 12-month average. The mean perceived probability of losing one’s job in the next 12 months rose by 0.1% to 14.5%, also above the 14.0% average. Also, the mean perceived probability of finding a job if one’s current job was lost fell markedly by 5.8% to 44.9%, the lowest readings since the start of the series. Elsewhere, both Gold and Oil rose by 1.38% and 0.8% respectively.
To mark my 3250th 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 150 points yesterday and is now ahead by 372 points for September after 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 0.21% higher at a price of 6495.
The Dow Jones Industrial Average closed 114 points higher for a 0.25% gain at a price of 45,514.
The NASDAQ 100 closed 0.46% higher at a price of 23,762.
The Stoxx Europe 600 Index closed 0.52% higher.
This Morning, the MSCI Asia Pacific closed 0.4% higher.
This morning, the Nikkei closed 0.18% lower at a price of 42,565.
Currencies
The Bloomberg Dollar Spot Index closed 0.32% lower.
The Euro closed 0.39% higher at $1.1761.
The British Pound closed 0.31% higher at $1.3551.
The Japanese Yen fell 0.05% closing at $147.45
Bonds
U.K.’s 10-Year Gilt closed 1 basis points lower at 4.64%.
Germany’s 10-Year Bund Yield closed 2 basis points lower at 2.64%
U.S.10 Year Treasury closed 2 basis points lower at 4.05%.
Commodities
West Texas Intermediate crude closed 0.79% higher at $62.36 a barrel.
Gold closed 1.38% higher at $3636.10 an ounce.
This morning on the Economic Front we have data of note from either the U.K. or the Euro-Zone. At 11.00 am we have the U.S. NFIB Small Business Optimism Index. Finally, at 3.00 pm we have a Three-Year Treasury Auction at 6.00 pm.
Cash S&P 500
‘Nothing Matters’ The S&P continues to trade close to all-time highs driven by liquidity. However, if the labour market sends a larger signal as we have seen with the past couple of NFP Reports then we know the markets could change on a dime. Adding to the mix would a stubbornly high CPI or PPI print this week. For my bearish case to plan out we need to see a reversal in earnings which have continued to grow against an uncertain backdrop. The Monthly Chart for the S&P is showing large negative RSI divergences which in the past have been a strong sell signal. This is another reason why I have no interest in being a buyer, preferring to sell rallies with tight stops. Markets closed flat on Monday ahead of this week’s inflation data. The PPI report comes Wednesday, followed by CPI on Thursday. In addition, there will be 3-, 10-, and 30-year Treasury auctions this week, setting up significant settlement dates next week. As of now, September 15 is set to settle for $78 billion. SOFR rose to 4.42%, which is a relatively high level for this time of the month and signals a lack of liquidity in the funding markets. So far, the Standing Repo Facility has not been triggered, which suggests that while liquidity remains sufficient, it is becoming tighter and more expensive to borrow. So far, liquidity has not impacted the broader market, but parts of it have stalled. The semiconductor SMH ETF is one example, having consolidated since mid-July. Its RSI has been trending lower, suggesting a shift in momentum. It is possible to identify a diamond reversal top pattern forming, though these patterns are tricky, as they can also represent bullish consolidation. Yesterday, the S&P rallied to my 6506-sell level before selling off to my revised 6491 T/P level (low of 6483) as emailed to my Platinum Members and I am now flat. Today, I will again be a seller on any further rally to 6516/6536 with a higher 6553 wider ‘Closing Stop’. If I am taken short, I will have a T/P level at 6492. I still have no interest in buying the S&P without first having a meaningful correction that is long overdue.
EUR/USD
No Change: Although the Dollar retains the dubious accolade of being the worst performing G10 Currency this year after another poor month in August, the EUR/USD has traded sideways over the past couple of months. The currency pair is currently holding below the early July peak close to 1.1829. The market has built up a sizeable long Euro position, mostly on the back of the enthusiasm earlier this year triggered by the loosening of Germany’s debt brake. In recent weeks, upside momentum in the Euro has waned against the backdrop of the market being already positioned long EUR’s and given the still slow rate of growth in Europe’s largest economy. Although lower ECB Rates will support consumer and business confidence in the Euro-Zone, industry is still faced with headwinds in the shape of still relatively high energy costs, long-term concerns over labour shortages in Germany, the new Trump Tariffs and a stronger exchange rate. On the margin, France’s political woes are also a negative factor given the potential impact on confidence in the Euro-Zone’s second largest economy. While enthusiasm for building long Euro positions may be faltering, it is also likely that downside pressure on the US Dollar is running out of steam. It is noticeable that the Euro could not sustain much upward momentum following Friday’s awful NFP Report. Friday’s post payroll report saw the Euro trade the whole of my sell range for a still 1.1740 average short position. I will leave my 1.1825 ‘Closing Stop’ unchanged while raising my T/P level to 1.1670. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
No Change: One of the main factors contributing to the Dollar weakness this year was the increase in Dollar hedging by non-USD based asset managers. In 2024, the Dollar was the best performing G10 currency as the greenback rose on the tide of U.S. exceptionalism. Data from the Bank of Japan between 2021 and 2024 shows that the hedging ratio for major Japanese Life Insurers dropped from around 60% to 40% as fund managers took advantage of the upward trend in the value of the Dollar. The opposite has happened so far this year and may be running out of steam. For these reasons I am happy to be a buyer of dips in the Dollar. On Friday, the Dollar hit my buy range for a now 97.70 long position. I will add to this position at 97.00 while leaving my 96.45 ‘Closing Stop’ unchanged. I will leave my 98.50 T/P level unchanged for now. 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 Friday at a price of 2405 with the same 2360 T/P level. I will add to this position at 2465 while leaving my 2505 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
FTSE 100
The FTSE continues to trade in narrow ranges which is done almost every day for September. I am still flat. Today, I will continue to be a buyer on any dip lower to 9070/9150 with the same 8995 wider ‘Closing Stop’. If I am taken long, I will have a T/P level at 9205. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
I am still flat. The Dow has resistance from 45750/46010 where I will be a small seller with a 46205 tight ‘Closing Stop’. I will not chase the Dow higher preferring to leave my 44700/44950 buy level unchanged with the same tight 44495 ‘Closing Stop’. If I am taken short, I will have a T/P level at 45520. If I am taken long, I will have a T/P level at 45200.
Cash NASDAQ 100
The NDX led Monday’s move higher, hitting my sell range for a now 23810 short position. I will add to this position at 23970 while raising my ‘Closing Stop’ to 24105. I will also raise my T/P level to 23670. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
The Bund consolidated Friday’s gains and I am still flat as the market never came close to Monday’s buy range. Ahead of the key inflation reports from the U.S. tomorrow and Thursday, I will not chase the Bund higher. Therefore, I will continue to be a buyer from 128.60/129.40 with the same 127.85 ‘Closing Stop’. If I am taken long, I will have a T/P level at 129.95. I still do not want to be short the Bund at this time.
Gold Rolling Contract
Gold has now rallied over $200 in the past four trading sessions. This is an insane move especially as the RSI and stochastics are extremely overbought. The precious metal broke out of a multi-month ascending triangle pattern that formed between April and September of this year, after failing to break above the $3,440 level on three occasions following the intraday high on April 22. A conservative measure of the breakout suggests that Gold could rise to $3,580, while a more aggressive measure points to a potential climb toward $3,700. At present, gold is trading in the middle of that range. Therefore, I will be a small seller on any further rally to 3685/3705 with a 3731 ‘Closing Stop’. Gold has support below from 3530/3550 where I will be a small buyer with a higher 3505 ‘Closing Stop’. If I am taken short, I will have a T/P level at 3651. If I am taken long, I will have a T/P level at 3573.
Silver Rolling Contract
I am still flat. I will not chase the price of Silver higher as I continue to be a buyer on any dip lower 39.70/40.50 with the same 38.25 ‘Closing Stop’. If I am taken long, I will have a T/P level at 41.40.
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