U.S. Indices eventually closed lower on Tuesday with the exception of the Russell 2000 which closed positive, albeit well off the earlier highs and lows, in what was a headline-intensive day which drove choppy trade. On Trump tariffs, the President initially raised the 25% tariff on all steel and aluminum coming into the US from Canada to 50%, effective March 12th, but this was later revoked after the Ontario Premier announced they are suspending the 25% surcharge on exports of electricity. Elsewhere, and also improving risk sentiment through the US afternoon, was the joint US/Ukraine statement on a ceasefire proposal. The US State Department said the US and Ukraine took important steps toward restoring durable peace for Ukraine and Ukraine expressed readiness to accept the US proposal to enact an immediate and interim 30-day ceasefire. Following this, Trump stated he will talk to Russian President Putin, but it takes “two to tango” and thinks he will talk with him this week, but he hopes to have a total ceasefire in the coming days. On data, the JOLTS report came in above expectations while the quits rate and vacancy rate increased, but saw little reaction due to it being stale data whilst participants had tariff updates to focus on. The Dollar was sold as the Dollar Index hitting a new low for the year. The Euro outperformed as it was boosted by comments from the German Green party co-leader that they are hopeful of a defence deal occurring this week. Meanwhile, the Japanese Yen lagged as it was hit by Nikkei reporting that the GPIF will not be boosting its holdings of stocks, firmer US Treasury yields also weighed. Treasuries were sold on the choppy tariff updates and Russia/Ukraine ceasefire optimism. The crude complex was choppy but settled with slight gains as it pared some of Monday’s losses amid broader macro sentiment, as opposed to energy-specific headlines. Ahead, US CPI and the Bank of Canada rate announcement are the highlights on Wednesday, as well as any further rhetoric on Trump Tariffs on Ukraine/Russia. After Canada’s Ontario announced a 25% tariff on electricity coming into the US, US President Trump said he will add an additional 25% tariff, to a total of 50%, on all steel and aluminum coming into the US from Canada. Ontario suggested it will not back down, but later withdrew the 25% surcharge on electricity. Trump was quizzed about whether he would then step down on the retaliation, and he said he is looking at backing down on the 50% duties on Canada, and he may back off doubling the tariffs but said he will “let you know” if they are going into effect. However, White House Trade Adviser Navarro said that the 50% tariffs on Canada steel and aluminum will no longer be taking effect today. Note, the 25% tariffs on steel and aluminum coming into the US are set to come into effect today. US JOLTS job openings for January printed 7.74 million, above the expected 7.63 million, and down from the prior 7.508 million. Drilling into the details, Quits rate and Vacancy rate rose to 2.1% (Rev. 1.9%) and 4.6% (prev. 4.5%), respectively. Overall, total job postings were unaffected by the federal government hiring freeze ordered by President Trump on January 20th. Pantheon Macroeconomics notes that Federal government postings fell by only 3K to 135K, even though the JOLTS data reflect postings on the last business day of the month. Overall, Pantheon adds that both the hiring and separations rates remained at extremely low levels in January, but they expect involuntary separations to rise over coming months, given the recent deterioration in two reliable forward-looking indicators. PM adds, WARN layoff announcements were 18% higher in the three months to January than in the previous three months. The Bank of Canada will publish their next rate decision on Wednesday 12th March 2025 at 13:45GMT/09:45EDT alongside the accompanying statement from BoC Governor Macklem, ahead of the press conference at 14:30GMT/10:30EDT. The BoC is expected to cut rates by 25bps on Wednesday although some do look for the BoC to keep rates unchanged. The main challenge to the BoC is the impact of tariffs but it is hard to quantify the overall impact until the final rate, duration and on what products have been decided, as the situation is currently very fluid. The unknowns result in a lot of uncertainty, and even that can have an impact on the economy before the measures take effect. Given the uncertainty and US President Trump’s love for tariffs, one more cut at this meeting is likely but the path ahead will likely see a slowdown of the pace of rate cuts. The second 25bps rate cut is not fully priced until July. Recent data saw an uptick in inflation, a disappointing labour market report, while Q4 GDP growth was strong, it was buoyed by the sales tax holiday, although the main focus right now is on the impact of upcoming tariffs. Elsewhere, Oil closed 0.72% higher while Gold reversed Tuesday’s losses ending yesterday’s session with a gain of 0.8%.
To mark my 3150th 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 375 points yesterday and is now down by 1531 points for March after 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 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 0.76% lower at a price of 5572.
The Dow Jones Industrial Average closed 478 points lower for a 1.14% loss at a price of 41,433.
The NASDAQ 100 closed 0.28% lower at a price of 19,376.
The Stoxx Europe 600 Index closed 1.70% lower.
Yesterday, the MSCI Asia Pacific closed 0.4% lower.
Yesterday, the Nikkei closed 0.64% lower at a price of 36,793.
Currencies
The Bloomberg Dollar Spot Index closed 0.41% lower.
The Euro closed 0.5% higher at $1.0905.
The British Pound closed 0.4% higher at 1.2946.
The Japanese Yen fell 0.4% closing at $147.96.
Bonds
Germany’s 10-year yield closed 11 basis points higher at 2.93%.
Britain’s 10-year yield closed 4 basis points higher at 4.63%.
U.S.10 Year Treasury closed 9 basis points higher at 4.28%.
Commodities
West Texas Intermediate crude closed 0.72% higher at $66.74 a barrel.
Gold closed 0.8% higher at $2915.10 an ounce.
This morning on the Economic Front we have a German 10-Year Bund Auction at 10.30 am. Next, we have U.S. MBA Mortgage Applications at 11.00 am and CPI at 12.30 pm. Finally, we have the Bank of Canada Rate Announcement at 1.45 pm and followed by the press conference at 2.30 pm.
Cash S&P 500
Given the technical breakdown that we have witnessed since the February highs it is going to take a dramatic rally for the S&P to stabilise and move back to new all-time highs. Wall Street now has enormous egg on their faces as not one forecast that I read foresaw a move lower in the S&P to 5500 for 2025 with most forecasts looking for a move to 6500/7000. On the Bear side of the ledger, we have just done what we have done three times in the past 15 years: Run a massive uptrend until it broke. These highs happened on massive negative divergence with each sell-off stopping at the Weekly 200 Day Moving Average which comes in at a price of 4650. I do not believe that this level will be hit before we have a strong rally to correct the oversold conditions first. The S&P is currently on a Quarterly Red Candle. We have only seen this three times in the past 15 years when we have had consecutive Quarterly Red Candles: 2011, 2015 and 2022. The onus on the Bears is try and continue this streak while the Bulls have 15 trading left this Quarter to try and rescue the market. On the continuous chart the $SPX RSI has now hit its most oversold reading since the COVID Crash five years ago. Meanwhile the MAG Seven Index has just printed its lowest RSI reading since this Index was created. This negativity creates a lot of firepower for a counter rally by the end of March especially as we have the FOMC Meeting next week. Another interesting statistic is that since the 1929 Crash the fifth year of each subsequent decade has seen that year end with strong gains even during WW11. The VIX is up for four consecutive weeks which has only happened once in the past 10 years – 2020. Given how fried the RSI is to the downside I will continue with my strategy of buying dips. Not many people in the Trump Cabinet can be happy seeing their portfolios taking a massive beating since the Inauguration. Shortly after the S&P opened yesterday morning, I emailed my Platinum Members to exit their latest 5587 average long S&P position at my revised 5634 T/P level. Subsequently, the S&P sold off to my next buy level at 5583 as emailed to my Platinum Members. I am still long with no stop and a T/P level at 5640. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
EUR/USD
The Euro rallied to my next sell level at 1.0940 for a now 1.0905 average sell level. I will leave my 1.1005 ‘’Closing Stop’’ unchanged while raising my T/P level to 1.0830. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
No Change: I am still long at an average rate of 103.75 with a now lower 104.40 T/P level. I will leave my 102.85 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
The Russell Index is now down 20% since the August highs. Yesterday, in contrast to the other main American Indexes, the Russell closed higher. Whether this is meaningful, only time will tell. I am still long the Russell at an average rate of 2060 with the same 1985 tight ‘’Closing Stop’’. I will now lower my T/P level to 2100. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash FTSE
Wrong! I was stopped out of my 8630 average long position at 8535 and I am now flat. The FTSE which was only severely overbought two weeks ago is now oversold. The FTSE has further support below from 8420/8490 where I will again be a buyer with a lower 8345 ‘’Closing Stop’’. If triggered, I will have a T/P level at 8570.
Dow Rolling Contract
The Dow got hit hard on Tuesday, closing 500 points lower than Monday’s New York close. The Dow has now lost over 4500 points in the past few weeks for an 11% fall from its December all-time high. This move lower saw the whole of Tuesday’s buy range triggered for a now 41600 average long position. I will leave my 41295 ‘’Closing Stop’’ unchanged while lowering my T/P level to 41850. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
The NDX fell shy of my T/P level before falling 500 points off its 19680 high print. I am still long at an average rate of 19250 with a now lower 19650 T/P level. It is interesting that despite the NDX being tanked over the past two weeks that the $BPNDX closed flat/higher over the past two trading sessions. Just like the S&P above, I will have no stop on this position. If any of the above prices are hit, I will be back with a new update for my Platinum Members.
December BUND
The Bund followed Global Bond Markets lower, hitting my second buy level at 127.40 for a now 127.70 average long position. I will leave my 126.55 ‘’Closing Stop’’ unchanged while lowering my T/P level to 128.50. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
No Change: Gold continues to oscillate around the 2900 price point. I am still flat. I will continue to be a buyer on any dip lower to 2830/2846 with the same 2817 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2864.
Silver Rolling Contract
No Change: I am still flat. I will continue to be a buyer on any dip lower to 30.70/31.50 with the same 29.85 ‘’Closing Stop’’. If triggered, I will have a T/P level at 32.20.
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