Tuesday’s trading session was largely a reversal of the Monday DeepSeek reaction. US equity futures were bid throughout the majority of the session led by upside in tech with Nvidia (NVDA) regaining some of the Monday losses, albeit still having some ground to cover to completely retract the move. T-notes settled red but were very choppy in response to risk sentiment, tariff commentary and auctions. On tariffs, US President Trump said he wants a larger universal tariff than 2.5% and he has a number in mind but has not quite set it yet. Meanwhile, the White House said the Feb 1st data still holds regarding Tariffs on Canada and Mexico. The Dollar was buoyed by the tariff commentary while the Japanese Yen lagged giving up some of the prior day gains and the Australian Dollar also underperformed ahead of inflation data overnight. Oil prices were choppy to Libya supply updates and the White House announcement on tariffs. Elsewhere, data was mixed with US Durable Goods disappointing on the headline but primarily due to volatile aircraft orders with core metrics more reassuring while the Atlanta Fed GDP Now data was upgraded in wake of the data to 3.2% from 3.0%. Consumer Confidence slipped but inflation expectations rose, while the Richmond Fed survey improved. There was also focus on earnings, Boeing (BA) was supported by commentary as opposed to the actual numbers while Lockheed (LMT) guidance saw the stock tumble. LVMH (MC FP) earnings disappointed, weighing on CAC futures, while BMW (BMW GY) cut its FY margin outlook. China stocks saw further gains with Alibaba (BABA) buoyed by its update that its new Qwen model outcompetes DeepSeek V3. The Federal Reserve is widely expected to hold rates between 4.25-4.50% at today’s meeting, highlighted by all 103 economists surveyed by Reuters expecting this outcome and money markets seeing just a 3% probability of a 25 basis points cut. Looking ahead, Money Markets are almost fully pricing in two 25bps rate cuts in 2025. Goldman Sachs’ baseline forecast also calls for two 25bp cuts this year in June and December and one more in 2026. GS expects inflation to keep falling and they do not expect tariffs to restrain the FOMC indefinitely. However, the desk adds it is hard to have great confidence in the exact timing of cuts, due to the fact it is hard to know how they will choose to navigate tariffs this time. Expectations of two rate cuts this year are fitting with the Fed median projections from December, which will be updated in March. Headline Durable Goods fell 2.2% in December, beneath the expected gain of 0.6% but within the wide range of forecasts between -3.5% and +4.0%, while the prior was revised down to -2.0% from -1.2%. The downside was primarily due to the volatile aircraft orders with ex-transport rising 0.3%, albeit still beneath the 0.4% forecast. Ex-defense durable goods fell 2.4% versus the prior -1.3%. The nondefense capital goods ex-aircraft rose by 0.5%, above the 0.3% forecast with the prior revised up to 0.9%. Meanwhile, the nondefense capital goods shipments ex-aircraft rose by 0.6%, versus the prior 0.4%. Analysts at Pantheon Macroeconomics highlight that this “suggests that Thursday’s advance GDP release will show a similar small gain in “core” business equipment investment, that is, excluding the volatile computer equipment and transportation components”. The desk also adds that the swings in aircraft will wash out the numbers eventually, but the larger question is “whether the nascent upturn in underlying capital goods orders and shipments will persist”. US Consumer Confidence unexpectedly fell to 104.1, beneath consensus of 105.6, and the upwardly revised prior of 109.5 (prev. 104.7). In January, the Present Situation Index fell sharply by 9.7 points to 134.3, with the Expectations Index also falling, by 2.6 points to 83.9, but remained above the threshold of 80 that usually signals a recession ahead; year-ahead inflation expectations rose to their highest level in six months. The headline weakened for a second straight month, but Chief Economist at The Conference Board Peterson notes it still remains in the narrow range since 2022, even if in the lower part. Additionally, Peterson noted, “views of current labour market conditions fell for the first time since September”; “consumers’ assessments of the present situation experienced the largest decline; and the return of pessimism about future employment prospects seen in December was “confirmed in January”. Ahead, OxFord Economics believes January’s inflation reports are unlikely to give consumers good news, as they will be lifted by residual seasonality and given added inflationary risks from tariffs this year, “inflation expectations will likely remain elevated in the near term. Elsewhere, both Oil and Gold closed higher Tuesday by 0.75%.
To mark my 3125th issue of TraderNoble Daily Commentary I am offering a special 2-Year rate of Euro 2750 for my Platinum Service which includes 1 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 lost 20 points yesterday and is now ahead by 1949 points for January after closing December with a gain of 1997 points after closing November with a gain of 3049 points having finished October with a gain of 2179 points. September saw a gain of 4402 points following a 301-point loss for August after closing July with a gain of 1918 points while June closed with a gain of 2074 points, having made 1843 points in May. The Platinum Service made 4010 points in April after ending March with a gain of 2113 points. 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 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 0.92% higher at a price of 6067.
The Dow Jones Industrial Average closed 136 points higher for a 0.31% gain at a price of 44,850.
The NASDAQ 100 closed 1.59% higher at a price of 21,463.
The Stoxx Europe 600 Index closed 0.36% higher.
Yesterday, the MSCI Asia Pacific closed 0.6% higher.
Yesterday, the Nikkei closed 1.39% lower at a price of 39,016.
Currencies
The Bloomberg Dollar Spot Index closed 0.6% higher.
The Euro closed 0.63% lower at $1.0425.
The British Pound closed 0.59% lower at 1.2424.
The Japanese Yen fell 0.75% closing at $155.67.
Bonds
Germany’s 10-year yield closed 2 basis points higher 2.56%.
Britain’s 10-year yield closed 3 basis points higher at 4.62%.
U.S.10 Year Treasury closed 3 basis points higher at 4.56%.
Commodities
West Texas Intermediate crude closed 0.77% higher at $73.73 a barrel.
Gold closed 0.80% higher at $2762 an ounce.
This morning on the Economic Front we have the German GFK Consumer Confidence at 7.00 am, followed by Euro-Zone Money Supply at 9.00 am. Next, we have U.S. MBA Mortgage Applications at 12.00 pm and the ECB Rate Announcement at 1.15 pm. This is followed by the U.S. Trade Balance and Wholesale Inventories at 1.30 pm. At 1.45 pm we have the Lagarde Press Conference. Next, we have the Bank of Canada Rate Decision at 2.45 pm and the Bank of Canada Press Conference at 3.30 pm. Finally, we have the FOMC Statement at 7.00 pm, followed by Fed Chair Powell’s Press Conference.
Cash S&P 500
Monday saw the biggest Market Cap loss in a day in US history in the largest stock in the world wiping out a near four-month trading range for Market Cap loss of half a trillion dollars with zero impact as everything got saved. Yesterday, NVIDIA rebounded 9% despite the threat of DeepSeek to its business. It looks like despite a change in administration that my 2024 ‘’Nothing Matters’’ theme continues without interruption. Nothing is allowed to break as it becomes a bear trap where shorts have to scramble to get out of their losing positions. Of course, one day this will change but for now everything remains in play. For now we have to respect the fact that nothing is broken on the Indices. However, constructs keep screaming caution. For one the un-inverted yield curve which nobody is even taking about anymore. Meanwhile Equity Premium is on the floor which is another major warning sign in my opinion. At some stage we will see a test of the 200-Day Moving Average which has not been tested in over two years. The price is at 5616 this morning. The Seasonal Chart calls for more strength into the first week of February before rolling over into late February/Early March. The $NYSI Stochastic is close to overbought which is another warning sign. To navigate this evenings FOMC Meeting and Powell press conference I will have both a buy and sell level. The S&P has resistance from 6100/6120 where I will be a seller with a 6135 ‘’Closing Stop’’. The S&P has support from 5980/5996. I will now raise my buy level to this range with a higher 5965 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 6082. If I am taken long, I will have a T/P level at 6015.
EUR/USD
One of the quietest trading sessions in many days. I am still long the Euro from late Monday at a price of 1.0430. I will continue to look to add to this position on any further move lower to 1.0370 while leaving my 1.0315 ‘’Closing Stop’’ unchanged. I will have a T/P level on this position at 1.0480. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
The Dollar surged yesterday, trading at a price of 107.90 as I go to press. Ahead of this evening’s Fed announcement, I will now raise my buy level to 106.50/107.20 with a higher 105.85 ‘’Closing Stop’’. The Dollar has resistance from 108.60/109.30 where I will be a seller with a higher 110.05 ‘’Closing Stop’’.
Russell 2000
I am still flat the Russell 2000 as the market again traded in a narrow range. With Interest Rates refusing to trade lower I will not chase the Russell 2000 higher as higher rates are not helpful to an Index that contains so many stocks with huge debt. This morning the Russell is again trading below its 50-Day Moving Average, trading at a price of 2291 as I go to press. Ahead of tomorrow’s FOMC Meeting, I will continue to be a buyer on any dip lower to 2150/2230 while leaving my 2075 ‘’Closing Stop’’ unchanged. If I am taken long I will have a T/P level at 2280.
Cash FTSE
My latest 8550 short FTSE position worked well as the market sold off to my 8500 T/P level and I am now flat. I cannot justify a long position given the strong resistance above. The FTSE has resistance from 8580/8650 where I will again be a seller with a higher 8715 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 8525.
Dow Rolling Contract
The Dow continues to defy gravity while valuations are at their highest level in history. Yesterday the Dow rallied to my second sell level at 44850 for a 44730 average short position. As I did not want to be short ahead of this evening’s Fed Meeting, I emailed my Platinum Members to exit any short position at 44800 and I am still flat. The Dow has further resistance from 45100/45350 where I will again be a seller with a higher 45505 ‘’Closing Stop’’. I still do not want to be long the Dow at this time. If I am taken short, I will have a T/P level at 44910.
Cash NASDAQ 100
Despite the NDX rebounding 2% yesterday, driven by the 9% rally in NVIDIA shares, the big question is whether AI has reached a dot-com moment. At the end of the 1990s, hundreds of e-commerce platforms were funded by eager VCs. When pets.com and others started to fail in 2000, and dot.com companies started to run out of money, companies like Lucent and Sun Microsystems that had extended credit to fast-growing customers suddenly found themselves in deep trouble on two fronts. First, their former clients were fire-selling their new equipment for cents on the dollar. Second, the clients stopped making the payments they owed. Balance sheets and income statements came under assault at the same time. Could history repeat, but this time with failing VC-funded AI companies selling the high-priced chips they were rushing to buy just months before on the fear of shortages? TBD. I am still flat the NDX as the market never came close to Tuesday’s buy range. The NDX has further resistance from 21600/21750 where I will be a small seller with a wider 21905 ‘’Closing Stop’’. If triggered, I will have a T/P level at 21470
March BUND
I am still flat the Bund with the market trading in a narrow range over the past 24 hours. Ahead of the FOMC Statement at 7.00 pm, I will now lower my buy level slightly to 130.40/131.10 with a lower 129.75 ‘’Closing Stop’’ I still do not .want to be short the Bund at this time. If this view changes, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold continues to find resistance at its broken trendline which comes in at a price of 2787. As a result, I will now be a small seller on any further rally to 2789/2805 with a 2817 tight ‘’Closing Stop’’. Gold has support from 2655/2670. I will continue to be a buyer on any dip lower to this range with the same 2639 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2684. If I am taken short, I will have a T/P level at 2773.
Silver Rolling Contract
I am still long Silver from Friday at a price of 30.40. I will continue to look to add to this position on any further move lower to 29.60 while leaving my 28.95 ‘’Closing Stop’’ unchanged. I will now lower my T/P level to 30.90. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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