U.S. Indices closed in the red on Tuesday with the initial rally seen after the soft-leaning CPI faded. Downside was led by the Dow, while Russell and Equal Weight S&P were flattish with both the S&P and NASDAQ closing lower by 0.2%. Sectors were more mixed with Energy and Defensives leading the gains, whilst Financials and Consumer Discretionary lagged. The downside in Financials was led by the big banks after JPM was hit post earnings, weighing on peers – hence Dow underperformance, too, and also not the best start to the Q4 ’25 earnings season. Meanwhile, the upside in Energy stocks largely tracked crude prices higher due to ongoing geopolitical concerns, mainly around Iran. President Trump has advised US citizens in Iran to “get out”, whilst also telling Iranian protestors that “help is on its way”. T-Notes bull steepened after the soft CPI report, but ultimately the report does little to change the Fed calculus, with officials likely awaiting more reports and confirmation of inflation returning to target before cutting, unless there is a drastic downturn in the labour market. The Dollar was ultimately firmer after paring the initial post-CPI weakness as geopolitics took focus after the punchy Trump comments on Iran. The Japanese Yen continues to lag after Takichi confirmed snap elections. Metals were mixed with gold prices lower, albeit silver held onto gains as volatility continues. Attention on Wednesday turns to US PPI and Retail Sales, and potential SCOTUS opinions on Trump’s tariffs. Overall, the CPI report leaned soft. The headline M/M rate rose 0.3%, in line with expectations, while the core rate rose 0.2%, beneath the 0.3% forecast. The headline Y/Y print rose 2.7%, in line with forecasts and matching the November print, while the core Y/Y rose 2.6%, below the 2.7% forecast and matching the prior pace. The supercore was also maintained at 2.7%. The report is welcome as it does not show any further upward pressure in prices, albeit it remains sticky above target. This should not change the Fed calculus too much, with Wall Street Journalist Timiraos noting the Fed will likely want to see more evidence that inflation is levelling off and then declining before cutting rates. Money markets are not pricing in cuts until the June or July meeting. If inflation were to ease in the upcoming months, this could bring forward rate cut bets, particularly if aligned with a weakening labour market. Following the data, Citi group are now expecting a 0.31% M/M increase in core PCE inflation; “Details like stronger restaurant prices and recreational services will boost PCE, while soft recreation equipment, tax services, and communications services should weigh on PCE”. The desk also notes the data would apply 2.9% Y/Y, and 2.8% for Q4 vs Q4, albeit PPI data with October and November due this afternoon, these expectations will change. Fed Member Williams said monetary policy is well-positioned ahead of the January decision amid a favourable outlook, noting policy is now closer to neutral, but still described it as moderately restrictive. Williams expects that we will see the labour market stabilise this year. He also echoed guidance, noting that in considering the extent and timing of additional adjustments, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. Williams added that the actions taken by the FOMC have moved the modestly restrictive stance of monetary policy closer to neutral. On inflation, underlying trends have been pretty favorable and expect inflation to be just under 2.5% for this year as a whole, before reaching 2% in 2027, and anticipate it will peak at around 2.75 to 3% sometime during the first half of this year. The New York Fed president added that inflation expectations remain well anchored. He also said the economic outlook is favourable and expects the economy to grow above trend this year, with real GDP growth between 2.5 and 2.75%. GDP growth looks to have been somewhat above 2% last year, and it will likely pick up some this year. Williams added that downside risks to employment have increased as the labour market cooled and expects that they will see the labour market stabilise this year and then strengthen somewhat thereafter. Elsewhere, Oil closed higher by 2.7% while Gold was flat.
To mark my 3300th 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 410 points yesterday and is now ahead by 2132 points for January 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 0.19% lower at a price of 6963.
The Dow Jones Industrial Average closed 398 points lower for a 0.80% loss at a price of 49,191.
The NASDAQ 100 closed 0.18% lower at a price of 25,741.
The Stoxx Europe 600 Index closed 0.08% lower.
This Morning, the MSCI Asia Pacific closed 0.3% lower.
This Morning, the Nikkei closed 2.93% higher at a price of 53,461.
Currencies
The Bloomberg Dollar Spot Index closed 0.27% higher.
The Euro closed 0.14% lower at $1.1649.
The British Pound closed 0.22% lower at $1.3434.
The Japanese Yen fell 0.61% closing at $159.10
Bonds
U.K.’s 10-Year Gilt closed 3 basis points higher at 4.40%.
Germany’s 10-Year Bund Yield closed 1 basis points higher at 2.81%
U.S.10 Year Treasury closed 1 basis points higher at 4.17%.
Commodities
West Texas Intermediate crude closed 2.71% higher at $61.11 a barrel.
Gold closed 0.18% lower at $4592.10 an ounce.
This morning on the Economic Front we have a 10-Year Gilt Auction at 10.00 am followed by U.S. MBA Mortgage Applications at 12.00 pm. Next, we have U.S. PPI and Retail Sales at 1.30 pm. This is followed by Business Inventories and Existing Home Sales at 3.00 pm. Finally, we have the Fed Beige Book at 7.00 pm.
Cash S&P 500
The S&P 500 made a new all-time high at 6998 post CPI before attracting selling. Supposedly, this afternoon is another opportunity for the Supreme Court to issue an opinion on tariffs. Who knows—we will find out around 3.00 pm whether an opinion is released or not. The timing is ideal for the stock market, as the S&P 500 is compressing and will soon be forced to make a decision on direction. I continue to think this looks more like a topping area for the index than the start of a “melt-up.” It could certainly be counted as an ending diagonal triangle. In the meantime, rates appear to be frozen in time, with economic data—whether good or bad—having no effect on the long end of the curve. Wednesday’s CPI report, which missed on the core, had no impact on the 30-year yield. It still looks like a bull flag, but for now, nothing is happening. To find rates moving higher, one needs to look to Japan, where the 10-year continues to grind higher. The 10-year JGB is currently at 2.17%. Based on the wedge pattern and extending it forward, the 10-year yield could climb toward 2.25% which will their highest yield in over 20 years. USDJPY broke out yesterday, rising above resistance at 159. For now, it appears the market cares more about Japan’s fiscal spending plans than interest-rate spreads. A move toward 162 seems increasingly likely at this point. Meanwhile, Software stocks were absolutely obliterated. Shares of Salesforce, ServiceNow, and Workday were smashed. In fact, ServiceNow is back at its 2021 highs, which also correspond to the April 2025 lows. Salesforce appears to be the best of the bunch, but that is not saying much. I am guessing the market thinks these businesses will be cannibalised by AI. The charts all look horrible. My latest 6965 average short position worked well as the market hit my 6948 T/P level. Subsequently, I emailed my Platinum Members to sell the S&P again at 6975 before trading lower to my 6957 T/P level and I am now flat. Today, I will again be a seller from 6970/6990 with a 7011 ‘Closing Stop’. If I am taken short, I will have a T/P level at 6952.
EUR/USD
I am still flat the Euro. Today, I will lower my sell level to 1.1720/1.1800 with a lower 1.1875 ‘Closing Stop’. If I am taken short, I will have a T/P level at 1.1660.
Dollar Index
The Dollar closed higher at 99.25 yesterday and I am still flat. Ahead of PPI I will not chase the market higher as I continue to be a buyer from 97.80/98.60 with the same 97.15 ‘Closing Stop’. If I am taken long, I will have a T/P level at 99.10.
Russell 2000
The Russell continues to trade close to all-time highs following last week’s 4.6% gain. I am still short at an average rate of 2580 with the same tight 2655 ‘Closing Stop’. I will now raise my T/P level to 2565. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
FTSE 100
The FTSE traded in a narrow range again on Tuesday. I am still short at an average rate of 10130. I will now raise my T/P level to 10095. I will continue to look to add to this trade at 10200 while leaving my 10305 ‘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
The Dow never came close to yesterday’s sell range as the market sold off following the earnings report from JP Morgan. I will now lower my sell level to 49400/49700 with a lower 49905 tight ‘Closing Stop’. If I am taken short, I will have a T/P level at 49170. I still do not want to be long the Dow at this time.
Cash NASDAQ 100
My latest 25750 short position worked well as the market sold off to my revised 25680 T/P level and I am now flat. Today, I will again be a seller from 25800/26000 with the same tight 26105 ‘Closing Stop’. If I am taken short, I will have a T/P level at 25640.
December BUND
I am still flat as the Bund continues to trade in very narrow ranges. Today, I will continue to be a buyer from 126.60/127.40 with the same 125.85 ‘Closing Stop’. If I am taken long, I will have a T/P level at 127.90. I still do not want to be short the Bund at this time.
Gold Rolling Contract
No Change: I am still flat Gold and I am going to stay flat as I still have no edge at these price levels. If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
Silver tagged on a further 3% on Tuesday, closing above $87. Earlier in yesterday’s session Silver made a new all-time high at 89.10. Overnight Silver has risen a further 3%, trading above $90 as I go to post. Big banks have been selling Silver for the past 20 years which is the main reason that Gold has been outperforming Silver over the past number of years. But as we have seen over the past 10 months this is now changing. Allegedly both BAC and Citibank have a combined short position in Silver of about 4.4 billion ounces. If this is true, the shorts cannot find such a huge amount of silver anywhere to cover their shorts and therefore short sellers have to settle in cash. At $100 per oz, that would come out to a $440 billion short position. However, with shorts having to close out their massive positions analysts could see silver prices trade above $300/$400 per oz. This is scary and probably justifies the enormous rally in Silver since October. I am going to stay flat Silver for now and wait for a meaningful correction first to get long again. TBD.
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