U.S. Indices saw strength on Tuesday and pared some of Monday’s weakness amid the broader risk-on sentiment and participants buying Dollar-denominated assets. Risk-on trade was already seen as US players entered for the day and after the US cash equity open, but it was further buoyed after Bloomberg reported that US Treasury Secretary Bessent told a closed-door investor summit Tuesday that the tariff standoff with China is unsustainable and that he expects the situation to de-escalate. Do note, FBN’s Gasparino later posted on X that he has been told by a person close to Bessent that the reports on his remarks about a trade deal with China having been imminent overstate what he said. Elsewhere on the trade footing, Politico noted that the White House is ‘close’ on Japan and India trade agreements but added it may take months to hammer out the final deals. US data was dismal as both Philly Fed Services and Richmond Fed disappointed, albeit saw little market move, while IMF downgraded the 2025 and 2026 global growth forecasts. Amid the greater demand for US assets on Tuesday, the Dollar was bid to the detriment of most G10 peers (both the Euro and Swiss Franc lagged), although the Canadian Dollar saw marginal gains due to firmer oil prices. On this, the crude complex was firmer, buoyed by the aforementioned risk-on sentiment and new US sanctions against Iran, amongst other things. Overall, T-Notes reversed prior day Trump vs. Powell steepening. Fed speak saw little new. Sectors were all in the green with everyone noticing gains of around 1.5% or more. Financials outperformed, while Consumer Staples ‘underperformed’, with the focus in the US equities space on earnings. The highlights included VZ, RTX, LMT, and NOC with all major earnings recapped below. The Richmond Fed Survey disappointed in April, as the composite manufacturing index fell to -13 from -4 in March. Of its three component indices, shipments and new orders fell notably to -17 (prev. -7) and -15 (prev. -4), respectively, and employment fell slightly to -5 from -1. Moreover, the local business conditions index tumbled to -21 from -13, while the index for future local business conditions also dropped notably to -37 from -22. On the inflationary footing, prices paid and received both rose, and firms expected heightened growth in both indices over the next 12 months. Furthermore, the future indices for shipments, new orders, and capacity utilisation all fell into negative territory. Meanwhile Fed Member Kashkari speaking on tariffs, said they are somewhat inflationary and also slow growth, and it is logical that tariffs lead to one-time increases in prices, but the backdrop of high inflation runs the risk of unanchoring inflation expectations. Kashkari added that cannot allow inflation expectations to get unanchored, a familiar line from the Fed, and so far long-run inflation expectations have not moved much; the Fed’s job is to make sure they don’t. Kashkari added that it is too soon to judge the path of interest rates and interest rate level in the US is largely influenced by capital flows. On data, he has not seen evidence of widespread layoffs yet; but will be paying close attention to signs if the labor market is softening materially. Data showing the labor market is healthy is stale. Finally, Fed Member Barkin said inflation expectations may have loosened. Firms are defensive, delaying and deferring investments, and there are a lot of reasons to be worried about consumer spending. Elsewhere, Oil closed 1.78% higher while Gold ended Tuesday’s session lower by 1.55% following another wild trading day.
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For anyone following my Platinum Service it made 395 points yesterday and is now ahead by 7375 points for April 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 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 2.51% higher at a price of 5287.
The Dow Jones Industrial Average closed 1066 points higher for a 2.66% gain at a price of 39,186.
The NASDAQ 100 closed 2.63% higher at a price of 18,276.
The Stoxx Europe 600 Index closed 0.25% higher.
Yesterday, the MSCI Asia Pacific closed 0.4% higher.
Yesterday, the Nikkei closed 0.17% lower at a price of 34,220.
Currencies
The Bloomberg Dollar Spot Index closed 0.68% higher.
The Euro closed 0.76% lower at $1.1426.
The British Pound closed 0.26% lower at 1.3335.
The Japanese Yen fell 0.46% closing at $141.48.
Bonds
Germany’s 10-year yield closed 3 basis points lower at 2.44%.
Britain’s 10-year yield closed 1 basis points lower at 4.56%.
U.S.10 Year Treasury closed 1 basis points higher at 4.39%.
Commodities
West Texas Intermediate crude closed 1.78% higher at $64.20 a barrel.
Gold closed 1.55% lower at $3372.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone and U.K. Manufacturing PMI at 8.30 am, 9.00 am and 9.30 am respectively. Next, we have Euro-Zone Construction Output and the Trade Balance at 10.00 am. This is followed by U.S. MBA Mortgage Applications at 12.00 pm and Building Permits at 1.30 pm. Fed Members Goolsbee and Waller are speaking at 2.00 pm and 2.30 pm respectively. At 2.45 pm we have Composite PMI, followed by New Home Sales at 3.00 pm. Finally, we have a Five-Year Treasury Auction at 6.00 pm, and the Beige Book at 7.00 pm.
Cash S&P 500
The S&P rallied hard on Tuesday, managing to reclaim all of its losses from Monday, before surging after the close following a tweet from President Trump that he never had any intention of firing Fed Chair Powell. At 8.30 pm on Monday the S&P was trading at a price of 5101. Last night’s Chicago close was 5287 while as I go to press the S&P is now trading at 5390. This is an insane move making it almost impossible to have any kind of stop in the market. It is frustrating that I was stopped late Monday at 5166 and now we are trading over 200 Handles higher. When you look at the VIX Index which closed at 30 last night and see the 10-and 20 Day realised volatility at COVID levels, you can only help but wonder. It is almost as if the market is saying that all of this trade-war-related uncertainty is going to vanish magically. Even the 60-Day realised volatility is at 30. I still think the S&P will continue to form lower highs and lower lows until we finally break the April 7 low of 4803. Meanwhile, the USD/JPY has weakened to 142.80 as I go to post after it managed to survive a test of 140 early Tuesday morning. Where USD/JPY seems to go is what matters in my opinion. As of right now we do not have a good answer. I am still flat the S&P as the market never came close to Tuesday’s buy range. Yesterday’s surge has left a massive ‘Open Gap’ from Monday’s 5158 close to Tuesday’s 5208 low print. The S&P will have support at last night’s close of 5287. Therefore, I will be a small buyer from 5265/5295 with a higher 5249 ‘Closing Stop’. If I am taken long, I will have a T/P level at 5333. Despite my concerns I still do not want to be short the S&P at this time.
EUR/USD
My latest 1.1540 short Euro position worked well as the market sold off to my 1.1430 T/P level and I am now flat. Tuesday’s price action suggests that we have put at least a temporary bottom in the Dollar, which in turn helped the equity markets to recover Monday’s plunge. The Euro has resistance from 1.1490/1.1590 where I will again be a seller with a 1.1665 ‘Closing Stop’. If I am taken short, I will have a T/P level at 1.1400. I still do not want to be long the Euro at this time.
Dollar Index
The Dollar recovered some of Monday’s aggressive sell-off, trading at 99.50 as I go to post. I am still long at an average rate of 99.05 with the same 99.70 T/P level. Meanwhile, I will leave my 97.95 ‘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
News after the close on Trump’s U-TURN re firing Powell saw the Russell open above my 1910 T/P level at a price of 1925. I have now exited my 1850 long position here and I am now flat. The Russell has support below from 1800/1880 where I will again be a buyer with 1735 ‘Closing Stop’. If I am taken long, I will have a T/P level at 1945. I still do not want to be short the Russell at this time.
FTSE 100
News after hours that Trump will not fire Fed Chair Powell sees the FTSE trading higher overnight. This latest move saw the whole of my FTSE sell level triggered for a now 8360 average short position. I will now raise my T/P level to 8310 while my ‘Closing Stop’ is now at a price of 8475. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
I am still flat as the Dow never came close to Tuesday’s buy range before surging 2000 points higher from where I marked prices early yesterday. The Dow has resistance from 40500/40800 where I will be a small seller with a 41105 wider ‘Closing Stop’. If I am taken short, I will have a T/P level at 40190.
Cash NASDAQ 100
My latest 17920 long NDX position worked well as the market rallied to my 18130 T/P level and I am now flat. This morning, the NDX is trading higher at a price of 18650. We have support below from 18050/18250 where I will again be a buyer with a higher 17795 ‘Closing Stop’. If I am taken long, I will have a T/P level at 18430. I still do not want to be short the NDX at this time
December BUND
I am still flat. Today, I will continue to be a seller of the Bund from 132.70/133.70 with the same 134.35 ‘Closing Stop’. If I am taken short, I will have a T/P level at 131.90.
Gold Rolling Contract
No Change: The Surge in Gold is getting silly as the market continues to build value outside both its Daily and Weekly Bollinger Bands. However, as long as Central Banks are continuing to sell the Dollar it is difficult to have a short Gold position despite the market trading at one of the most overbought readings for a main asset class that I have ever seen. I will continue to stay flat the Gold Market until the volatility stabilises. If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
I am still flat. Silver has support below here from 30.80/31.70 where I will again be a buyer with the same 29.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 32.40.
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