U.S. Indices were broadly lower on Tuesday, albeit in contained ranges, as participants await the US jobs report on Wednesday, followed by CPI on Friday. Data on Tuesday was largely subdued, as Retail Sales disappointed, and the weekly ADP only saw 6.5k jobs added per week, for the last four weeks. Import/export prices saw the former come in as expected, while the latter was slightly lower, in addition to soft employment costs. Sectors were mixed, as Utilities, Real Estate, and Materials outperformed, with Financials and Communications lagging as further Alphabet weakness weighed on the latter. For Financials, weakness was led by names such as Charles Schwab and Interactive Brokers Group, which saw a sharp sell off in the US afternoon, albeit with no clear driver, but some touted Altruist adding AI tax planning to its Hazel platform. One of the other stock-specific highlights included impressive DataDog (+11%) earnings, which helped support other software names. The Dollar pared some of its earlier weakness and stopped the rot from its sell-off on Monday, with the Yen the G10 outperformer and continuing to benefit post-election. CAD saw marginal gains, while other G10s saw losses to varying degrees. Oil was slightly lower, albeit within tight parameters, with the main update being Trump informing Axios that he is considering sending a second aircraft carrier strike group to the Middle East to prepare for military action if negotiations with Iran fail, adding that either we will make a deal or we will have to do something very tough like last time. Spot Gold was lower and fell back beneath USD 5,050/oz and Treasuries caught a bid after the aforementioned soft retail sales and ECI, and saw little reaction on an average 3 Year Treasury Auction. Elsewhere, there was hawkish Fed speak from Logan and Hammack, with both of them seemingly happy with where rates are presently. The latest New York Fed survey saw consumer delinquencies rise to the highest since 2017, while mortgage defaults surged in lower-income areas, with student loan delinquencies rising to a record. The December Retail Sales report was soft, with the headline unchanged versus November despite expectations for a 0.4% increase and cooling from the prior 0.6% pace in November. Within the report, ex-autos were also unchanged and softer than the 0.3% forecast, cooling from the prior 0.5%. The control group, a good gauge for consumer spending within the GDP report, was also soft, falling 0.1% after rising 0.1% in the prior month, missing expectations of a 0.4% rise. For the headline, across sectors, the only real strength was seen in building materials, rising 1.2%, while sporting goods rose 0.4% and gasoline stations +0.3%. On the flip side, miscellaneous and furniture stores declined by 0.9%, with other businesses around flat. Pantheon Macroeconomics writes that weak underlying sales are probably a sign of what is to come. The desk notes that this data, mapped with other leading indicators, points to a 0.1% increase in real consumer spending in December, and some slight downward revisions to spending growth in October and November. Pantheon adds that this suggests, albeit with a meaningful margin of error, to 2.5% spending growth in Q4, slower than the 3.5% in Q3. The Q4 Employment Cost Index rose 0.7%, a touch softer than the 0.8% forecast and prior. Within the report, wages and salaries rose 0.7%, while benefits costs also increased 0.7%, vs the prior 0.8%. Summarising the data, Pantheon Macroeconomics says labour cost growth is continuing to moderate despite solid productivity gains, which opens the door to further easing from the FOMC later this year. Pantheon highlights that “With 2% growth in productivity looking sustainable, unit labour costs are rising at a mere 1.5% pace, easily low enough to return core PCE inflation to the 2% target.” Fed Member Hammack said the Fed is in a good position with policy ‘to see how things play out’, and that the current Fed target rate ‘in the vicinity of neutral’ (Powell has previously said in a plausible range of neutral, albeit towards the higher end), adding that Fed rate policy could be on hold ‘for quite some time’. On the inflation side of things, the Cleveland Fed President remarked it is ‘still too high’ and tariff issues still in play, and she expects it to ease as year moves forward, but that is just a forecast. Added that there is a risk inflation could stick at 3% this year and needs to come down, worries that inflation could become entrenched, but expectations are currently contained, and that it is important to get to 2% inflation before changing rates again. On the labour market, Hammack said the job market stabilised into low hire, low-fire landscape. She further added she is ‘cautiously optimistic’ about the economic outlook. In the Q&A section, Hammack echoed that interest rates could remain on hold for an extended period while economic data is assessed, and flexibility will be maintained to raise rates if needed. Elsewhere, Oil closed higher by 0.63% while Gold closed lower by 0.5% following a session that saw plenty of two-way price action.
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For anyone following my Platinum Service it made 220 points yesterday and is now ahead by 4007 points for February, after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, 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 0.33% lower at a price of 6941.
The Dow Jones Industrial Average closed 52 points higher for a 0.1% gain at a price of 50,188.
The NASDAQ 100 closed 0.56% lower at a price of 25,127.
The Stoxx Europe 600 Index closed 0.12% lower.
This Morning, the MSCI Asia Pacific closed 0.4% higher.
Yesterday, the Nikkei closed 2.28% higher at a price of 57,650.
Currencies
The Bloomberg Dollar Spot Index closed 0.29% lower.
The Euro closed 0.08% higher at $1.1921.
The British Pound closed 0.05% lower at $1.3673.
The Japanese Yen rose 0.92% closing at $152.97.
Bonds
U.K.’s 10-Year Gilt closed 4 basis points lower at 4.50%.
Germany’s 10-Year Bund Yield closed 3 basis points lower at 2.80%
U.S.10 Year Treasury closed 6 basis points lower at 4.14%.
Commodities
West Texas Intermediate crude closed 0.63% higher at $64.36 a barrel.
Gold closed 0.51% lower at $5022.10 an ounce.
This morning on the Economic Front we have no data of note from either the U.K. or the Euro-Zone. At 12.00 pm we have U.S. MBA Mortgage Applications at 12.00 pm followed by the January Non-Farm Payrolls including Average Earnings and the Unemployment Rate at 1.30 pm. Finally, we have a speech from Fed Member Bowman at 3.10 pm and a 10-Year Treasury Auction at 6.00 pm.
Cash S&P 500
Stocks drifted lower today amid a $40 billion T-bill settlement and rising IV ahead of the Job report. Most of the action, though, came in the final hour or so of trading, with the S&P 500 dropping 0.33% and the NASDAQ 100 falling 0.56%. However, these losses have been reversed overnight with the S&P trading at a price of 6956 as I go to post. This afternoon, the NFP report will be released at 1.30 pm, and looking at the data points seems like a waste of time. They used to matter and given that the next Fed meeting is not until mid-March, the market will probably look through the report anyway. Most of the action is in Japan with the Nikkei now 15% higher for the year following the impressive Takaichi electoral victory. Sector wise, Japanese banks, retailing stocks and defense contractors stand to benefit the most. In America, the borrowing binge has now shifted from the public sector to the tech sector, with Alphabet reportedly gearing up for a global century-bond issue after a $20 billion U.S. deal and a week after Oracle floated a $25 billion bond. The tally for the volume of capex budgets for 2026 for the five biggest companies: Google, Meta, Amazon, Microsoft and Oracle is now estimated at $715 billion for this year, which would be a +60% surge from the 2025 level. I am still flat the S&P as the market never came close to Tuesday’s sell level before falling in the last hour of trading. Ahead of today’s NFP release I will now lower my sell level to 6995/7020 with a lower 7041 ‘Closing Stop’. If I am taken short, I will have a T/P level at 6969. My only interest in buying the market is on move lower to my short-term support level from 6830/6855 with the same 6805 ‘Closing Stop’. If triggered, I will have a T/P level at 6886. If this view changes, I will be back with a new update for my Platinum Members.
EUR/USD
I am still flat as the Euro again traded in a narrow range. Today, I will continue to be a buyer on any dip lower to 1.1750/1.1830 with the same 1.1675 ‘Closing Stop’. The Euro has short-term resistance from 1.2040/1.2120 where I will be a small seller with a 1.2205 wider ‘Closing Stop’. If I am taken long, I will have a T/P level at 1.1890. If I am taken short, I will have a T/P level at 1.1960.
Dollar Index
I am still long the Dollar from early Tuesday morning at 96.80. I will continue to look to add to this position on any further move lower to 96.00 while leaving my 95.35 ‘Closing Stop’ unchanged. Meanwhile, I will leave my 97.35 T/P level unchanged. 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 flat the Russell as the market again traded in a narrow range on Tuesday following last Friday’s explosive rally. The Russell has short-term resistance from 2715/2775 where I will continue to be a seller with the same 2825 tight ‘Closing Stop’. If I am taken short, I will have a T/P level at 2665.
FTSE 100
I am still flat as the FTSE never came close to Tuesday’s sell range. Today, I will continue to be a seller on any further rally to 10470/10570 with a higher 10645 tight ‘Closing Stop’. If I am taken short, I will have a T/P level at 10405. I still do not want to be long the FTSE at this time.
Dow Rolling Contract
After the Dow rallied to my 50410-sell level the marker had a small retracement to my revised 50310 T/P level and I am still flat. Ahead of today’s NFP data my only interest in selling the Dow is on a further rally to 50600/50900 with a higher 51235 ‘Closing Stop’. If I am taken short, I will have a T/P level at 50280. If this view changes I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
The NDX traded lower to my 25210 T/P level on Monday’s 25330 short position and I am still flat. Today, I will again be a seller from 25440/25640 with a higher 25805 ‘Closing Stop’. If I am taken short, I will have a T/P level at 25310.
December BUND
I am still flat as the Bund never came close to Tuesday’s buy range. The BUND followed the Treasury Market higher, helping the Bund to close over 128.50. Today, I will raise my buy level to 127.30/128.00 with a higher 126.55 ‘Closing Stop’. If I am taken long, I will have a T/P level at 128.55. If this view changes I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold continues to hold above $5000 even with a round of profit-taking late yesterday. The positive news for Gold is that the PBOC added to its bullion reserves for the fifteenth consecutive month in January, while net inflows into Gold ETFs from Indian investors surged in January, exceeding inflows in the equity market. Given the volatility I have no interest in chasing the market higher believing that we can break down again without notice. Therefore, I will continue to be a buyer from 4750/4820 with the same 4595 wider ‘Closing Stop’. If I am taken long, I will have a T/P level at 4910. If this view changes I will be back with a new update for my Platinum Members.
Silver Rolling Contract
I am still flat. With Bitcoin trading lower at $67K this morning I do not think we are finished with lower Silver prices. Therefore, I will continue to wait for lower prices before initiating a new long position. We have short-term support below from 69.10/73.10 where I will again be a buyer with the same 66.85 ‘Closing Stop’. If I am taken long, I will have a T/P level at 75.80
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