U.S. Equity Markets finished Tuesday lower led by the 0.70% fall in the NASDAO 100. Markets ended lower on the first trading day of 2023, giving up some early gains. Markets struggled to gain traction as investors await key figures due out later this week – namely data dealing with the labour market. The day was fairly quiet on the macroeconomic calendar, with the final December Manufacturing Purchasing Managers’ Index (“PMI”) reading unchanged from the initial reading. November Construction Spending came in slightly better than the prior month’s number. Bearish talking points remain the headline news as the 2023 economic outlook darkens with further rate hikes and earnings estimates expected to be revised lower. Within the S&P 500 Index, six of the 11 sectors finished lower. European Markets closed higher. Euro-Zone markets ended higher but off their best levels on Tuesday. The biggest macro news came from Germany as cooler inflation data spurred yesterday’s bond market rally. The country’s December Consumer Price Index came in at 9.6% – a sharp downturn from November’s 11.3% and a consensus for a 10.7% annual growth rate. Easing pricing pressures continue to push the narrative that the European Central Bank may not be as aggressive this year. More positive news came from the Euro-Zone’s December Manufacturing PMI reading as it remained flat, sparking optimism that supply chains are beginning to recover. However, the U.K. and Italy appear to be heading toward the harshest recession for this year, as economic indicators and analysts continue to provide bearish indicators of the two nations’ economies. In Asia, Japanese markets were closed, China’s manufacturing contracted at a quicker-than-expected pace in December, as the latest COVID-19 outbreak and weak global demand weighed heavily on production, new orders, and exports. Consulting firm China Beige Book said the economy likely contracted in the fourth quarter, while Singapore’s fourth-quarter Gross Domestic Product slowed to 2.2% year-over-year growth. Finally, Australian home prices recorded the largest annual decline since 2008. The country’s markets finished weak thanks to the poor macro data from China. Elsewhere, Oil fell 3.80% while Gold continues its bullish run, closing higher by 1.06%.
To mark my 2700th 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 133 points yesterday and is now ahead by 333 points for January, after finishing December with a gain of 2054 points. November ended with a gain of 4789 points, while finishing October with a record gain of 9619 points, making 6660 points in September, after closing August with a gain of 2228 points, having made 2660 points in July, following a gain of 3371 points in June. The Service made 3651 points in May, after making 762 points in April, following a gain of 5883 points in March. The Platinum Service made an impressive 5324 points in February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 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 0.40% lower at a price of 3824
The Dow Jones Industrial Average closed 10 points lower for a 0.03% loss at a price of 33,136.
The NASDAQ 100 closed 0.70% lower at a price of 10,862.
The Stoxx Europe 600 Index closed 1.22% higher.
This morning, the MSCI Asia Pacific rose 0.4%.
This morning, the Nikkei closed 0.02% higher at a price of 26,094
Currencies
The Bloomberg Dollar Spot Index closed 0.7% higher.
The Euro closed 1% lower at $1.0558.
The British Pound closed 0.7% lower at 1.1980.
The Japanese Yen rose 1.5% closing at $130.11.
Bonds
Germany’s 10-year yield closed 6 basis points lower at 2.37%.
Britain’s 10-year yield closed 2 basis points lower at 3.65%.
U.S.10 Year Treasury closed 11 basis points lower at 3.71%.
Commodities
West Texas Intermediate crude closed 3.80% lower at $76.64 a barrel.
Gold closed 1.06% higher at $1843.10 an ounce.
This morning on the economic front we already had the release of German Import Price Index which fell 4.5% versus -1.6% expected. Next, we have German and Euro-Zone Composite PMI at 8.55 am and 9.00 am respectively, followed by U.K Mortgage Approvals and Money Supply at 9.30 am. At 12.00 pm we have U.S. MBA Mortgage Applications. At 3.00 pm we have the JOLTS Job Openings and ISM Manufacturing. Finally, at 7.00 pm we have the FOMC Minutes from the December Meeting.
Cash S&P 500
I said in yesterday’s commentary that I am happy to be a buyer of the S&P as long as we do not close below 3790. This statement was certainly tested yesterday as after the S&P sold off from a morning high at 3878 to trade the whole of my buy range for a now 3824 average long position, the S&P made an afternoon low at 3794 before a late rally saw the market close at my average buy level. This morning, we are trading higher at 3834 as I go to press. I will now lower my T/P level to 3838 while leaving my 3798 ‘’Closing Stop’’ unchanged. If any of the above levels are hit I will be back with a new update for my Platinum Members.
EUR/USD
My Euro plan worked well, helped by lower-than-expected German inflation data. The Euro hit my 1.0530 buy level before rallying to my revised 1.0578 T/P level and I am still flat. Today, I will again be a buyer from 1.0470/1.0550 with the same 1.0385 ‘’Closing Stop’’.
March Dollar Index
The Dollar had a nice rally yesterday and I am still flat as the market never came close to my buy range. I will now raise my buy level to 1.0280/1.0340 with a higher 102.15 ‘’Closing Stop’’.
Cash DAX
Better CPI data saw the DAX soar yesterday and I am still flat as thankfully we had now sell level in Europe yesterday. The price action over the past two months for European Markets is decidedly bullish. This is against a background of a challenging rate environment and weak economic data. As I have said countless times over the years a market that cannot fall on bad news has to be respected – another words do not be short. This morning, the DAX is trading higher at 14260. I will now raise my buy level to 14050/14130 with a tight 13975 ‘’Closing Stop’’.
Cash FTSE
The FTSE never came close to yesterday’s buy range and I am still flat. I will now raise my buy level to 7460/7530 with a wider 7395 ‘’Closing Stop’’.
Dow Rolling Contract
The Dow had a volatile session yesterday. Despite the volatility every dip in the Dow was bought throughout the session. After the market hit my 33030 buy level we rallied to my revised 33115 T/P level and I am still flat. This morning, the Dow is trading higher at 33200. We have support from 32750/33000 where I will again be an aggressive buyer with the same 32595 ‘’Closing Stop’’. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
The 10% fall in Tesla shares certainly weighed on the NDX yesterday. The market hit my initial 10890 buy level but unfortunately missed my second 10750 buy level by 10 points before rallying to sit at 10915 this morning. I will continue to look to add to this position at 10750 while lowering my T/P level to 10970. If any of the above levels are hit I will be back with a new update for my Platinum Members. Meanwhile, I will leave my 10595 ‘’Closing Stop unchanged.
March BUND
Weaker CPI saw the Bund soar yesterday, trading over 220 points higher from where I marked prices 24 hours ago at 136.00 as I go to press. I will now raise my buy level to 134.50/135.30 with a tight 133.85 ‘’Closing Stop’’.
Gold Rolling Contract
Gold continued its impressive move higher. I am still flat. I will again raise my buy level to 1817/1832 with a 1799 wider ‘’Closing Stop’’.
Silver Rolling Contract
Silver continues to find resistance from 24.00/25.50. Yesterday we hit a high at 24.70 before selling off to my 24.00 buy level. I am still long with no stop. I will now lower my T/P level on this position to 24.60. Longer term I still expect Silver to break this key resistance area ahead of a move to at least $30.
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