Despite a choppy trading session, Equity Markets rallied in the last two hours, closing on the highs of the day. The S&P led Tuesday’s gains, closing higher by 0.65%. Stronger Economic data saw the Dollar reverse earlier loses, closing with a gain of 0.56% following a volatile two-way trading session. Continued unwinding of geopolitical risk saw Gold fall 0.7%. General Motors (GM) and the United Auto Workers (“UAW”) union reached a tentative deal on Monday, successfully ending the six-week-long strike that disrupted production at the automaker’s plants. This makes General Motors the last of the “Big Three” automakers (General Motors, Ford Motor, and Stellantis) to reach an agreement with the union. The deal, which is still pending approval from union members, includes a 25% hourly pay raise and cost-of-living adjustments over the course of the contract. The strike cost the company $800 million and would have cost an estimated $200 million per week had it continued. This is a significant victory for both parties, with production set to stabilise and union members returning to work with better wages and benefits. McDonald’s (MCD) reported stronger-than-expected third-quarter sales and profits, driven by higher prices and successful advertising. The company’s comparable sales rose 8.8%, exceeding the 7.8% estimate. Its earning per share also came in above expectations, rising to $3.19. However, U.S. locations saw a slight dip in customer traffic as higher prices weighed on low-income consumers. Still, analysts say the burger giant remains well positioned to weather a tougher economic climate. According to Glassdoor, employee confidence is deteriorating as concerns about job cuts reach their highest level since July 2020. The Glassdoor Employee Confidence Index (which measures the number of employees reporting a positive six-month business outlook for their employer) slumped to 45% in October, down from 54.6% one year ago. Confidence is the weakest among information workers and highest among construction workers, though it is still down on a year-over-year basis. This comes as employment numbers unexpectedly surged in September, highlighting the disconnect between the data and how Americans actually feel. European Markets closed higher. The German economy shrank in the third quarter, with gross domestic product (“GDP”) falling 0.1%, raising concerns of a possible recession in Europe’s largest economy. The decline in GDP was largely due to a slowdown in consumer spending as the effects of higher interest rates set in. Weakened demand for industrial goods and the fallout from last year’s energy crisis have only exacerbated Germany’s economic troubles. Additionally, S&P Global reports showed slowing momentum in the labour market, private sector, and services sector. Currently, Germany is the only major economy the International Monetary Fund expects to contract this year, and there are looming concerns about its longer-term growth as well. German inflation dropped to 3% in October, down from 4.3% in September. This marked the lowest Consumer Price Index (“CPI”) reading since August 2021. The core CPI reading, which excludes volatile food and energy prices, fell to 4.3%, down from the previous month’s 4.6%. While headline and core inflation are trending in the right direction, both numbers came in well above the European Central Bank’s (“ECB”) 2% target. If stubborn inflation persists, it could potentially force the ECB to continue its monetary-tightening campaign. U.K. housing and money-supply data have raised concerns about a potential economic downturn. Mortgage approvals dropped to their lowest level in eight months as high borrowing costs have weighed on the housing market, while money supply experienced a sharp contraction in September, down to 4.2%, marking the second decline in 13 years. This has dampened consumer confidence and suggests that a recession is increasingly likely. However, the Bank of England is cautious about relying on money-supply data as an indicator for the economy and inflation. In Asia, the Bank of Japan was dovish at their latest Meeting sending the Japanese Yen Crashing. The USD/JPY ended yesterday’s session with a huge 1.8% gain at 151.80 having been trading at 149.00 ahead of the meeting. The JPY/USD is within striking distance of the October 22 high at 151.95. Elsewhere, Oil fell 1.6% while Gold ended Tuesday with a 0.7% loss.
To mark my 2900th 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 60 points yesterday to finish October with a gain of 3184 points, after closing September with a small gain of 228 points, after finishing August with 1485 points gain 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 3164 points in February, 4687 points in January 2054 points in December, 4789 points in November and 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 0.65% higher at a price of 4193
The Dow Jones Industrial Average closed 123 points higher for a 0.38% gain at a price of 33,052.
The NASDAQ 100 closed 0.52% higher at a price of 14,409.
The Stoxx Europe 600 Index closed 0.59% higher.
Yesterday, the MSCI Asia Pacific closed 0.5% lower.
Yesterday, the Nikkei closed 0.53% higher at a price of 30,858.
Currencies
The Bloomberg Dollar Spot Index closed 0.56% higher.
The Euro closed 0.4% lower at $1.0575.
The British Pound closed 0.2% lower at 121.43.
The Japanese Yen fell 1.8% closing at $151.60.
Bonds
Germany’s 10-year yield closed 1 basis points lower at 2.82%.
Britain’s 10-year yield closed 4 basis points lower at 4.52%.
U.S.10 Year Treasury closed 4 basis points higher at 4.93%.
Commodities
West Texas Intermediate crude closed 1.6% lower at $81.02 a barrel.
Gold closed 0.7% lower at $1983.10 an ounce.
This morning on the Economic Front we have U.K. Manufacturing PMI at 9.30 am. This is followed at 11.00 am by U.S. MBA Mortgage Applications. Next, we have ADP Employment Change at 12.15 pm and Manufacturing PMI at 1.00 pm. This is followed by the JOLTS Job Openings, ISM Manufacturing and Construction Spending at 2.00 pm. Finally, we have the FOMC Statement at 6.00 pm and the Powell Press Conference at 6.30 pm.
Cash S&P 500
Slowly but surely the technical signals are beginning to align. This is still a big week with the FOMC Statement this evening followed by the Powell press conference at 6.30 pm. The last press conference saw the S&P trade at 4460 before falling 200 Handles. On Thursday we have Apple reporting their earnings after the close and then on Friday we have Non-farm Payrolls. The Treasury announced their latest funding requirements of $1.6 trillion for the next two Quarters. While this is an enormous number it is a relative slowdown from the horrid pace that we have seen. October alone saw $600 billion. Given the astronomical debt, the Treasury needs lower rates and it is why in my opinion the Fed is finished hiking. In my view QT has to stop and I would not be surprised if we see intervention to drive bond yields lower as the maths require this scenario. Remember no one wants a recession ahead of the Presidential Election in 12 months’ time. The potential firepower in signal charts for a massive rally is enormous. Futures Markets have massive, short exposure while at the same time Asset Managers have their lowest long exposure for the year to date. The VIX closing lower by a further 8% adds credence that we may have hit a bottom last week as signalled by the GANN Charts that I mentioned yesterday. Although the S&P closed on the high of the day at 4195, weaker earnings from AMD sees the market trading 10 Handles lower as I go to post. I am still aggressively long at an average rate of 4180 from last Thursday. Ahead of the FOMC and Powell, I will now lower my T/P level to 4196. I will leave my 4129 ‘’Closing Stop’’ unchanged. If any of the above levels are hit I will be back with a new update for my Platinum Members.
EUR/USD
Just when it looked like the Euro was going to test 1.07, strong U.S. Economic data saw the Euro fall 100 points to my 1.0570 buy level. I am still long with a now lower 1.0630 T/P level. I will add to this position at 1.0500 with the same 1.0445 ‘’Closing Stop’’. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
September Dollar Index
A frustrating session as the Dollar missed my 105.90 T/P level by 1 point before rallying 80 points after the USD/JPY rose 1.8%. I am still short at 106.25. I will continue to add to this position at 106.95 with the same 107.35 ‘’Closing Stop’’. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
The DAX built on Monday’s rally, closing higher by 0.65% yesterday at a price of 14810. Ahead of the FOMC and Powell, I am reluctant to chase the DAX higher despite the positive trading sessions over the past 48 hours. Therefore I will continue to be a buyer on any dip lower to 14470/14570 with the same 14395 tight ‘’Closing Stop’’. I still do not want to be short the DAX at this time.
Cash FTSE
No Change. I am still flat the FTSE. The FTSE has strong support below from 7200/7270 where I will be an aggressive buyer with a lower 7145 ‘’Closing Stop’’. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
Unfortunately, the Dow missed yesterday’s 32750 buy level by just 35 points before rallying 300 points into the close. I will now raise my Dow buy level slightly to 32560/32820 with a higher 32395 ‘’Closing Stop’’. If this view changes I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
My NDX plan worked well as the market sold off to my 14260-buy level before rallying to my revised 14320 T/P level and I am now flat. The NDX closed higher at 14409 but is trading 50 points lower on the weaker AMD earnings. The NDX is severely oversold. We have short-term support from 14130/14280 where I will again be a buyer with the same 13995 wider ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 14440.
December BUND
No Change. I am still flat the Bund having exited the last of my long positions last Thursday. The Bund has support below from 127.30/128.10 where I will again be a buyer with a lower 126.55 higher ‘’Closing Stop’’.
Gold Rolling Contract
Gold saw some further unwinding of geopolitical risk, closing lower by 0.7% at $1983 last night in New York. I am still flat and surprised that Silver has not been stronger. Gold has short-term support from 1950/1965 where I will continue to be a small buyer with a 1939 tight ‘’Closing Stop’’. Even though Gold is severely overbought, I still do not want to be short the market.
Silver Rolling Contract
No Change. I am still long Silver from five weeks ago at 24.05. In a change of strategy, I will have no stop or no T/P level on this position. This morning Silver is trading lower at 22.90. If this view changes, I will be back with a new update for my Platinum Members.
Recent Comments