U.S. Equity Markets closed higher following another volatile session which saw plenty of two-way price action. Markets rose after U.S. PMIs came in higher than expected adding to the belief that America may be heading for a soft landing. However, weaker than expected Euro-Zone PMIs saw the Euro reverse all of Monday’s gains, closing lower by 0.6%. After the close Microsoft reported stronger than expected earnings while it was the opposite for Alphabet which plunged over 6% in afterhours following disappointing results from Google Cloud. Chevron (CVX) has agreed to purchase Hess (HES) with an all-stock deal in an attempt to boost production growth in the U.S. oil industry. The $53 billion deal will require Chevron to pay $171 per HES share, a roughly 10% premium to the stock’s 20-day average. Additionally, each Hess shareholder will receive 1.025 shares of Chevron for each share of HES they own. The acquisition will provide Chevron with a significant foothold in Guyana, one of the world’s new major oil producers, where it will enhance its production growth. This acquisition comes on the heels of ExxonMobil’s (XOM) recent deal to acquire Pioneer Natural Resources (PXD), suggesting that oil and gas will remain a key contributor to the world’s energy mix. The United Auto Workers (“UAW”) strike just hit one of Stellantis’ (STLA) most lucrative plants. Nearly 7,000 union members walked out of the plant responsible for making the bestselling RAM 1500 pickup truck, bringing the total number of workers on strike up to 14,750. The increase in pressure was due to the UAW’s belief that negotiations have lagged compared with Ford (F) and General Motors (GM). Shawn Fain, the UAW president, suggested that there is still ground to be made but the intensity of negotiations signals a resolution is nearing. Investors have been hoping for a spot bitcoin (BTC) exchange-traded fund (“ETF”) for years, and the U.S. Securities and Exchange Commission (“SEC”) announced that investors would have a decision no later than next year. Bitcoin rose over 3.6% on Monday and a further 2.1% yesterday, climbing to a three-month high of $33,450. The enthusiasm spilled over to blockchain-related companies as well. Coinbase and Marathon Digital experienced surges of 6.5% and 11.9%, respectively. The surges came as the broader market highlighted concerns about escalation in Israel and a rise in 10-year Treasurys. The SEC is currently reviewing the proposal and is expected to deliver a decision by the end of 2024. Auto-loan delinquencies in America just reached a nearly 30-year high. The number of subprime borrowers who are at least 60 days past due on their loans has risen to 6.11%, the highest level since 1994. The rise in delinquencies is due to higher car prices and borrowing costs stemming from the Federal Reserve’s interest-rate hikes. The resumption of student-loan payments and the expectation of the Fed to maintain higher interest rates have only exacerbated the worries that delinquencies will persist. European Markets closed higher. In Asia, according to the U.S. Bureau of Economic Analysis, businesses have begun reducing their exposure to China as tensions have escalated over supply chains, trade, and geopolitical issues regarding Taiwan. A recent survey found that nearly one-third of respondents had either cut or paused their investments in China, a sizable 22% increase year over year. The withdrawal is a signal that the relationship between the U.S. and China continues to erode and could continue to dampen the country’s already struggling economic situation. As a result, Mexico has now overtaken China as the top destination for foreign direct investment by U.S. companies. Elsewhere Oil closed lower for the third consecutive trading session with a 2.05% fall, while Gold closed flat.
To mark my 2875th 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 35 points yesterday and is now ahead by 2539 points for October after closing September with a small gain of 228 points, after finishing August with 1485 points gain 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 3164 points in February, 4687 points in January 2054 points in December, 4789 points in November and 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 0.73% higher at a price of 4247.
The Dow Jones Industrial Average closed 204 points higher for a 0.62% gain at a price of 33,141.
The NASDAQ 100 closed 0.97% higher at a price of 14,745.
The Stoxx Europe 600 Index closed 0.44% higher.
Yesterday, the MSCI Asia Pacific closed 0.4% higher.
Yesterday, the Nikkei closed 0.20% higher at a price of 31,062.
Currencies
The Bloomberg Dollar Spot Index closed 0.66% higher.
The Euro closed 0.6% lower at $1.0590.
The British Pound closed 0.7% lower at 121.62.
The Japanese Yen fell 0.1% closing at $149.91.
Bonds
Germany’s 10-year yield closed 4 basis points lower at 2.82%.
Britain’s 10-year yield closed 6 basis points lower at 4.54%.
U.S.10 Year Treasury closed 2 basis points lower at 4.82%.
Commodities
West Texas Intermediate crude closed 2.05% lower at $83.74 a barrel.
Gold closed 0.1% lower at $1971.10 an ounce.
This morning on the Economic Front we have German IFO Survey and Euro-Zone Money Supply at 9.00 am. Next, we have U.S. MBA Mortgage Applications at 12.00 pm. This is followed by New Home Sales and the latest Bank of Canada Rate Decision at 3.00 pm. At 6.00 pm we have a speech from ECB President Lagarde. Finally, after the close we have key earnings from Meta.
Cash S&P 500
Despite the negative sentiment where it seems no one believes in the Bull case anymore; the S&P reversed an afternoon sell-off to close higher on the day. It was an impressive comeback as the S&P managed to close over its 200-Day Moving Average (4236) as a five-day losing streak came to an end. We have positive divergences everywhere, whether it is Equal Weight, Cumulative $NYAD, Junk Bonds and even the miserable Bank Index and Small Caps. Bond Yields falling 20 basis points since Monday’s 5.02% spike high adds to the positivity in my view. Everything remains vastly oversold as shown by the $BPSPX RSI which is now at its most oversold time period since 2015. This background comes just when buybacks are due to start next week. There is every chance that the Bears will get slaughtered over the next few weeks as positive seasonality begins on Wednesday. The key to the upcoming rally is validation that we have seen a top in Treasury Yields. It must be frustrating that despite the doom and gloom, Bears have not been able to force a breakdown below the now key 4180/4200 major support level. After this week there are only nine weeks left in 2023. Although recession fears have accelerated again, it is difficult to see a recession with the labour market so tight. I am still flat the S&P. I will now raise my buy level to 4210/4228 with a higher 4189 ‘’Closing Stop’’.
EUR/USD
Much worse than expected Euro-Zone PMIs saw the Euro close lower by 0.6% yesterday. This move lower saw my 1.0605 buy level triggered. I am still long and I will add to this position at 1.0535 with the same 1.0485 ‘’Closing Stop’’. I will have a lower 1.0670 T/P level on this position. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
September Dollar Index
The late rally in the Dollar saw my 106.25 sell level triggered. I am still short, and I will add to this position on any further move higher to 106.85 with the same 107.35 ‘’Closing Stop’’. I will have a T/P level on this position at 105.70. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
Despite the awful PMI data, the DAX rallied 120 points from where I marked prices 24 hours ago. I am still flat. I am reluctant to chase the DAX higher leaving my 14600/14680 buy level unchanged with the same 14495 ‘’Closing Stop’’.
Cash FTSE
Yesterday was a frustrating session as the FTSE missed my initial 7320 buy level by 2 points before rallying to sit at 7395 this morning as I go press. Today, I will raise my buy level to 7270/7340 with a higher 7215 ‘’Closing Stop’’. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
Twice the Dow missed yesterday’s 32900 initial buy level before having 200/300-point rallies and I am still flat. Today, I will now raise my buy level to 32780/32980 with the same 32595 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 33200. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
Unfortunately, the NDX missed yesterday’s 14850 T/P level with a 14849-spike high print before selling off on the Alphabet earnings miss. I am still long at 14720 with a now lower 14830 T/P level. I will continue to add to this position at 14570 with the same 14495 ‘’Closing Stop’’. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
It took a while as finally the Bund rallied to my 129.05 on last week’s 128.70 average long position. I am still flat. The Bund has support below from 127.40/128.20 where I will again be a buyer with a lower 126.75 ‘’Closing Stop’’.
Gold Rolling Contract
No Change. Gold surged last week, trading $150 higher from where we were 10 days ago. This is a massive move on Geo-political risk. I am still flat Gold, and I am going to stay this way as I certainly have no interest in being long the market at these prices. The price action is telling you not to be short. Once the price of Gold settles in a new range I will be back with a new update.
Silver Rolling Contract
No Change. I am still long Silver from five weeks ago at 24.05. In a change of strategy, I will have no stop or no T/P level on this position. This morning Silver is trading lower at 22.95. If this view changes, I will be back with a new update for my Platinum Members.
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