U.S. Indices closed at new all-time highs on Tuesday while the Dollar was sold and T-Notes steepened in response to a “not as bad as feared” CPI in the face of President Trump’s tariffs, keeping a September rate cut on the table following the weak July jobs report – for more on CPI, please see analysis below. Outperformance was led by the Russell, which rose almost 3% while the other three indices saw gains of around 1%. The majority of sectors were green, with notable outperformance in Communication and tech stocks, while Real Estate, Consumer Staples and Health Care lagged. T-Notes steepened, with the front-end bid while the long-end was sold after CPI, with T-Notes hitting lows after Trump announced he is considering suing Fed Chair Powell over the Fed renovations, raising more concerns over Fed independence and boosting term premium. The CPI and post from Trump hit the buck, seeing the Dollar and the Canadian Dollar underperform in the FX space while the Swiss Franc prospered, paring some of the recent weakness in the fallout of the US/Switzerland trade war. Sterling also performed well after the latest jobs data showed an easing in the pace of the labour market slowdown. Crude prices settled red with attention still on the Trump/Putin meeting on Friday, although Ukraine announced that Russia has made more advances today and that Ukraine is not willing to pull out of Donbas. Elsewhere, the OPEC MOMR saw world oil demand unchanged, but the EIA boosted their forecasts for 2025 and 2026. Meanwhile, Fed Speak saw Schmid maintain a hawkish tone – stating that the Fed are close to neutral and he still favours a wait-and-see approach. Headline CPI rose 0.197%, in line with the 0.2% forecast and cooling from the prior 0.287%, Y/Y rose by 2.7%, below the 2.8% forecast and matching the prior pace. The Core CPI rose by 0.322%, accelerating from the prior 0.228% but in line with the 0.3% forecast, while Y/Y was hotter than expected at 3.1% (exp. 3.0%, prev. 2.9%). Regarding the Fed, the inflation levels are manageable and would likely endorse a September rate cut given the slowdown in the labour market. Pantheon Macroeconomics notes that core goods prices, ex-autos, rose 0.2%, less than the 0.5% increase in June, but still outpacing the 2024 trend, when prices were flat. The desk notes that it remains the case that prices have risen the most since January for goods that are primarily imported. Pantheon also highlights that Core Services prices rose by 0.4%, but Pantheon says it is no cause for alarm as a 4.0% rebound in airline fares contributed 0.05pp to changes in overall prices. Nonetheless, a move higher in services prices alongside rising goods prices, disputes the theory that the fall in services prices will be offset by the rising goods prices – this will be something to watch in the months ahead. Reminder, this is July data, and the latest tariff rates did not kick in until August. We will be looking at the August metrics and data ahead to see the implications of the latest tariff rates. Despite keeping the door open for a September rate cut, in the wake of the data, Fed’s Schmid (hawk) spoke, noting that retaining a modestly restrictive policy stance is appropriate, adding that inflation is too high. However, Barkin noted that they may see pressure on inflation and unemployment, noting the balance between the two is unclear. Meanwhile, in regard to PCE implications, Pantheon suggests the CPI data is consistent with a 0.23% increase in Core PCE. Elsewhere, both Oil and Gold closed lower by 1.13% and 0.3% respectively.
To mark my 3225th 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 190 points yesterday and is now ahead by 1327 points for August 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 1.13% higher at a price of 6445.
The Dow Jones Industrial Average closed 483 points higher for a 1.13% gain at a price of 44,458.
The NASDAQ 100 closed 1.33% higher at a price of 23,839.
The Stoxx Europe 600 Index closed 0.21% higher.
This Morning, the MSCI Asia Pacific closed 0.4% higher.
This morning, the Nikkei closed 1.30% higher at a price of 43,274.
Currencies
The Bloomberg Dollar Spot Index closed 0.48% lower.
The Euro closed 0.54% higher at $1.1673.
The British Pound closed 0.57% higher at $1.3509.
The Japanese Yen rose 0.21% closing at $147.71.
Bonds
U.K.’s 10-Year Gilt closed 6 basis points higher at 4.63%.
Germany’s 10-Year Bund Yield closed 4 basis points higher at 2.74%
U.S.10 Year Treasury closed 3 basis points higher at 4.29%.
Commodities
West Texas Intermediate crude closed 1.16% lower at $63.22 a barrel.
Gold closed 0.3% lower at $3345.10 an ounce.
This morning on the Economic Front we already had the release of German CPI which printed 2% y/y versus 2% expected. Next, we have the U.S. MBA Mortgage Applications at 12.00 pm. Finally, we have speeches from Fed Members Barkin, Goolsbee and Bostic at 1.00 pm, 6.00 pm and 6.30 pm respectively.
Cash S&P 500
Despite President Trump announcing a variety of new tariffs last week the S&P rallied yesterday to close at a new all-time high helped by a better CPI Report. CPI is nowhere near the Fed’s 2% target level yet it does not matter as the market continues to climb any wall of worry. With a dividend yield of close to 1% retail investors continue to pile into the market at record levels. Overall earnings results continue to exceed expectations while the key names in the Magnificent 7 are performing exceptionally well. It is very clear that trade war headlines have become a secondary driver of markets with the AI revolution and Fed now in the spotlight. Fo now the path of least resistance for equity markets continues to point higher despite the S&P now trading well above its Daily Bollinger Band (6417) with the market trading at 6447 as I go to post this morning. I was lucky yesterday as after the CPI was released the S&P hit my 6418-sell level before selling off to a low at 6386 before spending the rest of Tuesday’s session trading sideways to higher before rallying into the close. This initial move lower saw my 6399 revised T/P level triggered and I am now flat. The 14 Day RSI closed at 67 last night and is only one more rally for being severely overbought. The S&P has resistance from 6455/6475 where I will again be a seller with a 6491 ‘Closing Stop’. Given how overbought and overvalued the S&P is at this time I will not chase the S&P higher as I continue to look to buy the market on any dip lower to 6320/6340 with the same 6299 ‘Closing Stop’. If I am taken short, I will have a T/P level at 6431. If I am taken long, I will have a T/P level at 6363.
EUR/USD
The Euro hit my sell range shortly before the New York close for a now 1.1690 short position. I will add to this trade at 1.1770 while leaving my 1.1825 tight ‘Closing Stop’ unchanged. I will now raise my T/P level to 1.1620. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
The Dollar was weak yesterday, hitting my buy range for a now 98.00 long position. I will add to this position at 97.30 while leaving my 96.75 ‘Closing Stop’ unchanged. I will now lower my T/P level to 98.60. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
The Russell surged yesterday, closing higher by 3%. This move higher saw my 2250 sell level triggered. I am still short and I will add to this position at 2310 while leaving my 2365 ‘Closing Stop’ unchanged. I will now raise my T/P level to 2220. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
FTSE 100
Overnight the FTSE rallied to my 9175-sell level. I am still short with a now higher 9130 T/P level. I will add to this position at 9245 while leaving my 9305 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
Thankfully we had no sell level in the Dow and are still flat. Given the number of open positions that I currently have I am going to stay flat the Dow today and reassess tomorrow. If this view changes I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
Shortly after the CPI was released the NDX hit my 23720 second sell level for a now 23620 average short position. This trade looked good for 10 minutes before the buy the dip hit the NDX and the market rallied into the close again this morning, trading at a price of 23860 as I go to post. In my opinion this is the most overvalued market in history but the problem is it can become even more overvalued as no one knows ’Where and When’’ it will top. I will leave my 23905 ‘Closing Stop’ unchanged while raising my T/P level to 23570. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
Late yesterday the Bund hit my 129.00 buy level. As I now have a number of open positions I will now lower my T/P level on the Bund to 129.35. I will add to this position at 128.30 while leaving my 127.75 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
I am still flat as I continue to be a buyer on any further dip lower to 3305/3325 with the same 3289 ‘Closing Stop’. If I am taken long, I will have a T/P level at 3349. I no longer want to be short Gold at this time.
Silver Rolling Contract
I am still flat. Today, I will raise my Silver buy level to 36.50/37.30 with a higher 35.25 ‘Closing Stop’. If I am taken long, I will have a T/P level 38.00.
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