U.S. Indexes closed at new all-time highs, led by all three American Indexes with NVIDIA largely responsible for the move as breadth across sectors was poor. NVIDIA’s (NVDA, +5%) gains came amid CEO Huang’s keynote address at GTC, where new lines of products and roadmaps were unveiled, including NVIDIA Arc, 17 quantum builders, and 7 new AI supercomputers. The Co. sees USD 500 billion of business in the next five quarters. Also supporting Tech was Microsoft (MSFT, +2%), gaining after signing a new pact with OpenAI, which includes OpenAI being contracted to purchase USD 25 billion of Azure services as well as removing fundraising constraints for OpenAI. On the flip side, Real Estate was the biggest loser with poor guidance from Alexandria Real Estate (ARE, -19.2%) weighing. In FX, the Dollar was broadly weaker against peers. The Australian Dollar outperformed as optimism over US-China trade relations improved, with the latest Wall Street Journal reports suggesting that US President Trump and China’s President Xi to discuss lowering China tariffs in exchange for a crackdown on fentanyl. Details/outcome on an agreement will be dependent on the meeting between the two leaders this week. Sterling underperformed as fiscal concerns remain, and easing in BRC food inflation adds to recent dovish Bank of England bets. Separately, Treasuries were slightly bid across the curve, showing little reaction towards US data and supply. The US 7 Year Note Auction was met with soft direct demand, leaving a higher dealer take-down and a larger-than-average tail. Data saw ADP’s first preliminary estimate of an average increase of 14,250 jobs in the four weeks ending on October 11th. Meanwhile, Consumer Confidence fell one point as concerns remain over tariffs/inflation, but topped expectations, while the Richmond Fed improved in September, driven by increases in shipments, new orders, and employment. Regarding commodities, crude prices were weighed by continued concerns over OPEC+ supply increases outweighing the Gaza ceasefire coming to a halt as Israel strikes Gaza in response to Hamas violations earlier in the day. Gold fell for the third consecutive day as profit-taking persists. US Consumer Confidence fell to 94.6 from an upwardly revised 95.6. Originally, expectations were for a decline to 93.2 from 94.2. The Present Situation Index rose to129.3 from 127.5, and the Expectations Index declined 2.9 points to 71.5. Consumers’ average 12-month inflation expectations inched up to 5.9% from 5.8%. Consumers indicated that they will likely buy fewer goods in the upcoming holidays if tariffs inflate the price of imported items. 27.8% of consumers said jobs were “plentiful” (previously 26.9% in September), while 18.4% said jobs were “hard to get” (previously 18.2%). Ahead six months: 15.8% of consumers expected more jobs to be available (previously 16.6%), 27.8% anticipated fewer jobs (previously 25.7%), 12.5% expected their incomes to decrease (previously 11.7%); Consumers’ perceived likelihood of a US recession over the next 12 months declined in October, but more consumers thought a recession had already started. Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board, writes, “Consumers’ write-in responses were led by references to prices and inflation, which continued to be the main topic influencing consumers’ views of the economy. References to tariffs declined further this month but remained elevated. References to US politics were up notably, with the ongoing government shutdown mentioned multiple times as a key concern.” In October, the Richmond Fed Composite Index rose to -4 from -17 in September. All three of the component indices lifted – shipments notably rose to 4 from -20, while new orders and employment remain negative but printed -6 (prev. -15) and -10 (prev. -15), respectively. Local business conditions improved to -1 from -12, while the index for future business conditions fell to -5 from -1. Elsewhere ahead, shipments lifted to 13 (prev. 0), new orders to 12 (prev. 8), while employment was nearly unchanged at 2. On the inflationary gauges, prices paid and received notably fell in October; while looking ahead, they also saw a chunky decline. Backlog of orders lifted, but remains firmly below 0, while lead time decreased to 6 from 10. Elsewhere, Oil closed lower by 2.25% while Gold ended Tuesday’s session with a 0.66% loss following another two-way volatile session.
To mark my 3275th 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 was flat yesterday and is still ahead by 3957 points for October after closing September with a gain of 3774 points after 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 0.23% higher at a price of 6890.
The Dow Jones Industrial Average closed 161 points higher for a 0.34% gain at a price of 47,706.
The NASDAQ 100 closed 0.74% higher at a price of 26,012.
The Stoxx Europe 600 Index closed 0.24% lower.
Yesterday, the MSCI Asia Pacific closed 0.3% higher.
Yesterday, the Nikkei closed 0.58% lower at a price of 50,219.
Currencies
The Bloomberg Dollar Spot Index closed 0.09% lower.
The Euro closed 0.16% higher at $1.1660.
The British Pound closed 0.47% lower at $1.3274.
The Japanese Yen rose 0.48% closing at $152.12
Bonds
U.K.’s 10-Year Gilt closed 1 basis points lower at 4.40%.
Germany’s 10-Year Bund Yield closed 1 basis points higher at 2.62%
U.S.10 Year Treasury closed 1 basis points higher at 4.00%.
Commodities
West Texas Intermediate crude closed 2.25% lower at $59.95 a barrel.
Gold closed 0.66% lower at $3955.10 an ounce.
This morning on the Economic Front we have U.K. Money Supply and Mortgage Lending at 9.30 am. Next, we have U.S. MBA Mortgage Approvals at 12.00 pm and the Trade Balance at 12.30 pm. At 1.45 pm we have the Bank of Canada rate announcement. This is followed by New Home Sales and Pending Home Sales at 2.00 pm. Finally, we have the FOMC Statement at 6.00 pm and the Powell Press Conference at 6.30 pm.
Cash S&P 500
The Federal Reserve is widely expected to cut rates by 25 basis points to 3.75-4.00% when the latest FOMC Statement is released at 6.00 pm. Within the rate decision, participants will be eyeing any dissenters, with Governor Miran expected to vote for a 50bps reduction. In recent remarks, he noted that a 25bps pace is too slow, but he does not think moving by more than 50bps increments is necessary. There will also be a focus on any balance sheet adjustments. Rabo Bank notes that the FOMC will likely end the balance sheet runoff, but that is not necessarily the consensus view. While some analysts now expect the Fed to end its balance sheet runoff, citing recent money market turbulence that could threaten interest rate control, some see a gradual wrap-up; others anticipate a full halt, with mortgage bonds likely to continue running off slowly due to housing market conditions. In the following press conference, Chair Powell may not give much forward guidance for December, given the limited data availability. Given the ongoing US government shutdown, there has been a lack of data for the Fed to see, although the recent CPI data was cooler-than-expected, which will be welcomed. In FX, ING would not expect any FOMC-day USD rally to be particularly long-lasting unless the Fed delivers clear hawkish signals, and they expect the broader information flow to point to renewed dollar softness, especially heading into a seasonally weak year-end, with their EUR/USD target for December remaining at 1.20. Despite the Dow, S&P and NDX closing at new all-time highs, Breadth was awful with 100 stocks closing lower for every 84 up. The last time the stock market held up until late October on rampant optimism and thin leadership was 1973, when the Dow’s rally to test all-time highs ended on Friday October 26 on a daily closing basis and October 29 on an intraday basis, after which the market collapsed in November. We are now right in that range. Apart from the FOMC Statement this evening, the other widely anticipated news is earnings reports for five companies that have been leaders in the mania. Microsoft, Google and Meta will all report after the close this evening. The huge rises in the NASDAQ Indexes since April predict good earnings. The earnings themselves have no predictive power. Yet investors anticipate that reports with such emotional intensity and surely volatility will spike. Interestingly, the VIX closed 4% higher yesterday despite the rally to new all-time highs. This is another negative divergence suggesting trouble ahead. The level of internal weakening suggests that when the market finally does turn, it will be a spectacular reversal. In my opinion if your pension is fully invested in equities you need to take protection or at least switch a large majority of your pension into cash. I am still short the S&P at a price of 6765. I will leave my 6740 T/P level unchanged while having no stop on this position for now. If this view changes I will be back with a new update for my Platinum Members.
EUR/USD
I am still flat as the Euro again traded in a narrow range on Tuesday. Today, I will continue to be a seller on any further rally to 1.1710/1.1790 with a higher 1.1845 ‘Closing Stop’. If I am taken short, I will have a T/P level at 1.1645
Dollar Index
No Change: I am still long the Dollar at 98.70 with a now lower 99.10 T/P level. I will continue to look to add to this position at 98.00 while leaving my 97.25 ‘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
I am still short the Russell at an average rate of 2520 with the same 2480 T/P level. I will leave my 2605 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
FTSE 100
The FTSE hit my sell range for a now 9710 short position. I will add to this position at 9780 while leaving my 9825 tight ‘Closing Stop’ unchanged. I will now raise my T/P level to 9650. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
No Change: I am still flat. Given the Daily chart I really want to be a seller but I have enough short exposure from the other markets and for this reason I will stay flat the Dow today. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
The NDX rallied to my sell range for a now 25950 short position. I will only add to this position on any further move higher to 26150 with a now higher 26305 ‘Closing Stop’. I will now raise my T/P level to 25800. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
The Bund continues to trade in narrow ranges making it difficult to make points. I am still long from last Friday at a price of 130.00. I will continue to look to add to this position at 129.30 while leaving my 128.55 ‘Closing Stop’ unchanged. I will now lower my T/P level to 130.50. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold fell below $3900 early this morning. I was still asleep and missed the opportunity to buy the market. Today, I will be a small buyer from 3850/3875 with a 3835 ‘Closing Stop’. If I am taken long, I will have a T/P level at 3910. If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
I am still long at an average rate of 49.20 with the same 47.15 ‘Closing Stop’. I will also leave my 49.80 T/P level unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Recent Comments