U.S. Equity Markets ultimately closed primarily in the green Tuesday, with lows seen after the open on the hot CPI Report was released. Equity weakness swiftly pared however with gains being seen throughout the session, led by the NASDAQ with Tech/Semi-Conductors soaring, supporting the S&P 500 to see a record high close. The Russell 2000 was the outlier and closed flat. The hot inflation data saw money markets lean (eventually) more hawkish with 83bps of rate cuts priced in throughout the year at time of writing, vs. 88bps pre-CPI. The Dollar and bonds saw two-way price action to the inflation prints but finished the session with a more traditional response to the hawkish data. The Dollar Index initially sold off on the report to a low of 102.72 but sharply pared to peaks of 103.17, although it failed to hold above 103.00 heading into the overnight session. Elsewhere in FX, Sterling sold off after a dovish labour market report and the Japanese Yen was sold after remarks from Bank of Japan Governor Ueda noting some weak data recently while Bloomberg sources suggested a March hike is too close to call. T-Notes were lower across the curve with the long end leading the losses ahead of 10 year supply. The auction was weak, taking T-Notes to lows of 111-02+ before paring somewhat into settlement. Crude prices settled marginally lower while Gold prices tumbled to find support at USD 2,150/oz and Bitcoin eased off its recent record highs but holds above USD 70k currently. Overall, CPI data was hotter than expected with the core CPI rising 0.4% M/M, above the 0.3% consensus, and matching the top end of analyst forecasts. The Core Y/Y rose 3.8%, easing from the 3.9% prior, but not as much as the 3.7% forecast. The headline numbers saw M/M rise 0.4% (exp. 0.4%, prev. 0.3%), with Y/Y rising 3.2% (exp. 3.1%, prev. 3.1%). The annualised measures rose, with the core CPI 3 month annualised rate ticking up to 4.1% from 3.9%, and the 6 month rising to 3.8% from 3.5%. The main concern here is that the hot January report has continued into February, somewhat dismissing the argument that seasonality concerns led to the “one-off” hot print in January. Nonetheless, the BLS exclaims that the rise in shelter and gasoline prices contributed to over 60% of the monthly increase – suggesting the high price rises are largely concentrated in these areas; Pantheon Macroeconomic writes “the bigger picture is fine”. There is still plenty of data due before the May and June meetings to help shape expectations. The Fed (and now markets) have already dismissed the probability of a March cut while May also seems highly unlikely. This report therefore likely does little to alter the Fed’s near-term narrative. We will see three more CPI (April 10th, May 15th June 12th), PCE (March 29th, April 26th, May 31st) and NFP reports (April 5th, May 3rd and June 7th) before the June 12th FOMC. The Fed is now in the March blackout period, therefore the first chance we will hear from them will be in the FOMC statement and then remarks from Fed Chair Powell, who will likely explain that this data supports taking a data dependent and cautious approach to policy. It will be interesting to see if the Fed Chair repeats his line at the semi-annual testimony (post Jan CPI) that the Fed is “not far” from gaining confidence that inflation is on the track to hit the 2% goal, particularly after this latest report. However, he also explained that the Fed is not looking for better inflation readings than what has already been, but for more of what has been seen.
To mark my 2950th 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 364 points yesterday and is now ahead by 1430 points for March. February closed with a gain of 1606 points, after closing January with a gain of 3675 points. December saw a gain of 1890 points after finishing November with a gain of 1734 points. October ended with a gain of 3184 points, after closing September with a small gain of 228 points, after finishing August with a gain of 1485 points, 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 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 1.12% higher at a price of 5175.
The Dow Jones Industrial Average closed 235 points higher for a 0.61% gain at a price of 39,005.
The NASDAQ 100 closed 1.49% higher at a price of 18,219.
The Stoxx Europe 600 Index closed 1% higher.
Yesterday, the MSCI Asia Pacific closed 0.4% higher.
Yesterday, the Nikkei closed 0.06% lower at a price of 38,797.
Currencies
The Bloomberg Dollar Spot Index closed 0.13% higher.
The Euro closed 0.01% higher at $1.0927.
The British Pound closed 0.1% lower at 1.2792.
The Japanese Yen fell 0.4% closing at $147.70.
Bonds
Germany’s 10-year yield closed 3 basis points higher at 2.33%.
Britain’s 10-year yield closed 8 basis points higher at 4.05%.
U.S.10 Year Treasury closed 5 basis points higher at 4.15%.
Commodities
West Texas Intermediate crude closed 0.28% lower at $77.71 a barrel.
Gold closed 1.3% lower at $2156.10 an ounce.
This morning on the Economic Front we have U.K. Industrial Production, Trade Balance and GDP at 7.00 am. Next, we have Euro-Zone Industrial Production at 10.00 am, followed by U.S. MBA Mortgage Applications at 11.00 am. Finally, we have a 30-Year Treasury Auction at 5.00 pm.
Cash S&P 500
‘’Nothing Matters’’. Despite a much stronger than expected U.S. CPI Report, Equity Markets soared yesterday resulting in the S&P closing at a new all-time high at 5175. Anything negative is immediately discounted as the liquidity equation continues to drive everything and hence, we must be mentally prepared for the S&P to squeeze to new highs above last Friday’s 5189 all-time high. AI continues to lead despite internals been tepid at best. This is shown by Nvidia which bounced 7% yesterday, closing back above $910 per share. As I said to my Platinum Members, how can the Fed cut Interest Rates when CPI is at 3.8%. I was correct in predicting higher gasoline prices would lead to higher inflation, but you had to be quick to take any gains before they evaporate. After the S&P spiked to my 5154 sell level, we sold off to my 5136 T/P level and I am still flat. The 15 Minute Chart is overbought with a large negative divergence while the $NYSI is now maximum overbought. Incredibly, the VIX closed 9% lower at a price of 13.85. The markets seem to think psychologically we have now reached the stage ‘’where markets will never go down again’’ as if it is 1995. The S&P has resistance from 5192/5208 where I will be a small seller with a 5221 higher ‘’Closing Stop’’. The S&P has short-term support from 5100/5116 where I will be a buyer with a tight 5089 ‘’Closing Stop’’.
EUR/USD
I am still flat the Euro as the market just missed yesterday’s initial 1.0880 buy level with a 1.0894 low print. Today, I will continue to be a buyer on any dip lower to 1.0810/1.0880 with the same 1.0745 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 1.0940. I still do not want to be short the Euro at this time.
Dollar Index
I am still flat. Today I will leave my Dollar sell level unchanged at 103.30/103.80 with the same 104.45 ‘’Closing Stop’’. I still do not want to be long the Dollar at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash DAX
The 14 Day RSI in the DAX continues to be fried to the upside helped by the fact the DAX closed at yet another all-time high and is now withing a few points of the 18,000 pivot point. I have not traded the DAX for the last two weeks as I did not want to be short and just could not bring myself to buying the market given the fact that Germany is in recession. The DAX has resistance from 18140/18230. I will be a small seller in this area with a tight 18305 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 18020.
Cash FTSE
The FTSE soared yesterday, and I am still flat. The FTSE has support from 7650/7720. I will now raise my buy level to this area with a higher 7585 ‘’Closing Stop’’. I still do not want to be short the FTSE at this time. If this view changes, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
My Dow plan worked really well yesterday as the market spiked to my 35010-sell level before selling off to my revised 38826 T/P level and I am now flat. Despite much higher-than-expected CPI print the Dow continued to build value off Monday’s 38460 low print, trading at 39000 as I go to press. The Dow has further resistance from 39240/39490 where I will again be a seller with a higher 39735 ‘’Closing Stop’’. I still do not want to be long the Dow at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
The NDX missed yesterday’s buy range by 50 points before rallying over 300 points helped by the 7% rebound in Nvidia’s share price. The NDX has strong resistance at last Friday’s 18418 all-time high. Today, I will be a small seller from 18360/18510 with a tight 18605 ‘’Closing Stop’’. The NDX has support from 17900/18050. I will now raise my buy level to this area with a higher 17795 ‘’Closing Stop’’..
March BUND
I am still flat the Bund as the market never came close to yesterday’s buy range. I will now raise my buy level to 131.80/132.50 with a higher 131.15 ‘’Closing Stop’’. I still do not want to be short the Bund at this time.
Gold Rolling Contract
I am still flat as Gold again missed my conservative buy range. Today, I will raise my buy level to 2125/2142 with a wider 2109 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2153.
Silver Rolling Contract
No Change: I have said a number of times this year that ‘’Patience’’ is required in order to make sustained points in 2024. I am glad that I have stuck to the long side in Silver, despite been offside on my latest 24.24 average long position for the past month. This morning, Silver is trading slightly lower at 24.30. I will leave my T/P level on this position unchanged at 25.10. I will continue to hold this position with no stop. If this view changes, I will be back with a new update for my Platinum Members.
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