U.S. Indices closed higher on Tuesday after again reversing overnight weakness on trade worries, and once US trade was underway. Upside extended in the wake of the rise in April JOLTS ahead of the May NFP due Friday, which also saw bonds pare earlier gains. Sectors were predominantly firmer, with outperformance in Technology, Energy and Materials. Meanwhile, Communication Services, Real Estate and Consumer Staples lagged. The communications sector was weighed on by losses in Alphabet (GOOGL) following more reports that Apple (AAPL) is considering Perplexity as an iPhone search alternative from Google Search. T-Notes saw a bid overnight and throughout the European session, primarily sparked by the strong 10 Year JGB auction, although upside pared thereafter after the rise in JOLTS, seeing T-Notes settle little changed. In FX, the Dollar staged a comeback with the Dollar Index closing back above 99.00 while the turnaround in the risk environment weighed on haven currencies JPY and CHF. Oil prices continued to rise this week, largely on the risk environment, but also on reports from Kpler that OPEC+ did not even discuss hiking production above 411k BPD, despite reports late last week suggesting they were considering such a move. Gold and Silver prices fell as yields rose and as sentiment was buoyed. On Fed speakers, Bostic said one cut this year still seems possible, while Cook toed the party line that policy is well-positioned, but warned tariffs could lead to a stagflationary environment. Goolsbee reiterated that they could see direct tariff effects on prices within a month, but warned the slowdown related to tariffs might not show up for a while in the data. Attention on Wednesday turns to the ADP employment report and the ISM Services PMI ahead of the NFP report on Friday. The Job Opening and Labour Turnover Survey rose to 7.4 million from 7.2 million, above the expected 7.1 million. The report notes that both hires and total separations were little changed at 5.6 million and 5.3 million, respectively. Within separations, quits (3.2 million) and layoffs and discharges (1.8 million) saw little change. The vacancy rate ticked up to 4.4% from 4.3%, while the quits rate eased to 2.0% from 2.1%. The number of hires rose by 169k to 5.573 million, from 5.404 million in March. Analysts at Pantheon Macroeconomics describe the pick-up in JOLTS as an aberration, given the ongoing decline in Indeed’s measure of postings throughout April and May, as well as the drop in the hiring intentions indexes of the regional Fed surveys. However, the consultancy notes the first estimate is often revised. PM also highlights “The ratio of job postings to unemployment—a key barometer of labor market tightness—edged up to 1.03 in April, from 1.02 in March, but remained well below last year’s 1.15, which was close to the 1.16 average in the two years before the pandemic.” Fed Member Bostic reiterated that the best monetary policy approach at this stage is one of patience, given the overall health of the US economy. He emphasised that the Fed has time to watch how uncertainty, particularly around trade, resolves, and stated clearly that he is in no hurry to adjust policy. While Bostic still sees a possible path to one rate cut this year, he stressed that more progress on inflation is needed before he would support such a move. He remains cautious and he is not ready to declare victory on inflation, highlighting that core prices remain a concern and that “there is still a ways to go.” Bostic noted that it remains unclear how tariffs will affect the inflation outlook, and although sentiment has turned gloomier, he noted that hard data has yet to reflect this shift. Bostic said it is a “tough call” to say whether the Fed would be cutting rates at all this year if not for trade-related uncertainty. He added that while the job market appears broadly healthy, some signs of softening have emerged. Importantly, he noted that there is no evidence yet that tariffs are pushing inflation higher, and a recession is not in his baseline forecast. Meanwhile, Governor Cook stated that current Fed policy is well-positioned to handle a range of economic scenarios and reaffirmed her commitment to keeping longer-term inflation expectations anchored. She emphasised the importance of balancing the Fed’s dual mandate when considering future policy decisions. Cook highlighted that trade policies are creating risks for both inflation and the labour market, noting there is emerging evidence that these policies are already impacting the economy. She anticipates economic growth will slow this year but maintains that the economy remains in a solid position despite the uncertainty. Regarding inflation, Cook warned that trade policy may make it more difficult to bring inflation down, particularly as firms may now be more willing to raise prices compared to the past. She acknowledged that tariffs present clear challenges to both sides of the Fed’s mandate but said it’s important to see how the situation evolves before drawing conclusions. She also warned that tariffs may lead to stagflation-like conditions. She also noted she cannot prejudge what the FOMC will do now with rates, Fed has to be open to all possibilities. She also spoke on the bond market, noting she always watches market functioning and that bond markets proved resilient in April amid stress. Elsewhere, Oil continued to build value above $60, ending Tuesday with a gain of 1.5% while profit-taking in Gold saw the precious metal close lower by 0.8%.
To mark my 3200th 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 855 points for June, 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 0.58% higher at a price of 5970.
The Dow Jones Industrial Average closed 214 points higher for a 0.51% gain at a price of 42,519.
The NASDAQ 100 closed 0.79% higher at a price of 21,662.
The Stoxx Europe 600 Index closed 0.09% higher.
This Morning, the MSCI Asia Pacific closed 0.8% higher.
This Morning, the Nikkei closed 1.03% higher at a price of 37,832.
Currencies
The Bloomberg Dollar Spot Index closed 0.60% higher.
The Euro closed 0.58% lower at $1.1374.
The British Pound closed 0.15% lower at $1.3523.
The Japanese Yen fell 0.87% closing at $143.94.
Bonds
England’s 10-Year Gilt closed 6 basis points lower at 4.62%.
Germany’s 10-Year Bund Yield closed 1 basis points lower at 2.53%
U.S.10 Year Treasury closed 2 basis points higher at 4.47%.
Commodities
West Texas Intermediate crude closed 1.52% higher at $63.47 a barrel.
Gold closed 0.8% lower at $3354.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone and U.K. Composite PMI at 8.55 am, 9.00 am and 9.30 am respectively. This is followed by U.S. MBA Mortgage Applications at 12.00 pm and the ADP Employment Change at 1.15 pm. Next, we have Services PMI at 2.45 pm. At the same time, we have the Bank of Canada Rate Announcement. Finally, we have ISM Manufacturing PMI at 3.00 pm. Meanwhile, Fed Members Cook and Bostic are speaking at 1.30 pm.
Cash S&P 500
Bears again tried to make something happen on Tuesday but this did not last long as all three American Indexes reversed morning losses, to close higher on the day by an average pf 0.6%. This move higher finally saw the VIX break and close below the key support level of 18 with a 3.65% fall. Given the extent of the $NYSI the S&P has plenty of firepower to trade lower but the market is not giving anyone a chance to get long as every dip is aggressively bought. The S&P is now close to the key resistance range of 6005/6025. I will be a seller on any rally to this area with a higher 6041 ‘Closing Stop’. I am surprised that so many ‘Open Gaps ‘below have been left untouched. Systematic positioning the long side is still very low and this in turn continues to support the S&P on any dip. However, you wonder how long this can continue with the lack of trade deals after weeks of promising deals is starting to grind. Yet, the market does not care. The S&P has strong support from 5890/5910. I will now raise my buy level to this area with a higher 5875 ‘Closing Stop’. If I am taken short, I will have a T/P level at 5988. If I am taken long, I will have a T/P level at 5933.
EUR/USD
The Euro continues to attract mild selling above 1.1420. I am still flat. The Euro has short-term resistance from 1.1480/1.1560 where I will be a seller with a 1.1635 ‘Closing Stop’. My only interest in buying the Euro is on a large move lower to 1.1140/1.1220 with the same 1.1035 wider ‘Closing Stop’. If I am taken long, I will have a T/P level at 1.1290. If I am taken short, I will have a T/P level at 1.1420.
Dollar Index
I am still long the Dollar from Monday at an average rate of 99.10. I will now raise my ‘Closing Stop’ to 98.45. Meanwhile, I will leave my 99.50 T/P level unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
My latest long 2040 Russell position worked well as the market rallied to my 2075 T/P level and I am now flat. This morning, the Russell is trading higher at a price of 2104. The Russell has short-term support below from 2000/2060 where I will again be a buyer with a higher 1945 ‘Closing Stop’. If I am taken long, I will have a T/P level at 2105.
FTSE 100
The FTSE had a nice bounce off Tuesday’s 8730 low print, trading at 8800 this morning. I will now raise my sell level to 8850/8920 with a higher 8985 ‘Closing Stop’. Despite yesterday’s bounce I have no interest in buying the FTSE given how overextended the FTSE is at this time. If this view changes I will be back with a new update for my Platinum Members.
Dow Rolling Contract
The Dow fell shy of Tuesday’s sell range and I am still flat. Ahead of this afternoon’s key ADP Report, I will now raise my Dow sell level to 42750/43000 with a higher 43205 ‘Closing Stop’. I still do not want to be long the Dow at this time.
Cash NASDAQ 100
The NDX continues to build upward momentum as my ‘Nothing Matters’ theme continues. So far, the U.S. has not been able to agree any new trade deals yet the NDX does not care as buyers continue to aggressively buy every dip. Wednesday’s move higher saw the NDX hit my sell range for a now 21650 short position. I will add to this trade at 21850 while raising my ‘Closing Stop’ to a price of 22005. I will now raise my T/P level to 21540. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
I am still flat as the Bund again traded in a narrow range on Tuesday. Today, I will continue to be a buyer on any dip lower to 129.50/130.30 with the same 128.75 ‘Closing Stop’. If I am taken long, I will have a T/P level at 131.10. I still do not want to be short the Bund at this time.
Gold Rolling Contract
I still do not like the price action in Gold. Gold is severely overextended and has strong resistance above 3400. Today, I will lower my sell level to 3420/3445 with a lower 3471 ‘Closing Stop’. If I am taken short, I will have a T/P level at 3395.
Silver Rolling Contract
I am still flat. This morning, Silver is trading at a price of 34.40. I will not chase the market higher as I continue to be a buyer on any dip lower to 32.90/33.80 with the same 31.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 34.60.
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