U.S. Indices were in the red for the large majority of the session on Tuesday, with the majority of sectors also residing in negative territory. Utilities and Energy were the only ones in the green, with the former buoyed by Constellation Energy (CEG) earnings and the latter by firmer oil prices. The crude complex was firmer, with prices rebounding from the earlier OPEC-induced downside, and also partially aided by the geopolitical developments amid Israel expanding its operations in Gaza and conflicting reports regarding the Houthis. Namely, a Houthi spokesman denied that the group will stop attacking Red Sea ships and stated that Trump’s statement that Houthis do not want to fight and the US will stop bombing is false. Trump added that he will take their word that they won’t be blowing up ships. Back to sectors, Health was the laggard, with vaccine and gene therapy names weighed on by reports that Vinay Prasad is tapped to run the FDA centre that regulates vaccines and gene therapies. The Dollar was weaker amid falling US Treasury yields, with all G10 FX gaining against the Dollar. The Euro and Sterling saw some strength in the Euro-Zone morning session after Reuters said the EU and the UK have agreed to hold annual summits to discuss their relationship. Later in the session, FT citing sources noted that the UK closes in on a US trade pact with lower tariff quotas for cars and steel. T-Notes chopped to the risk environment, German political chaos and supply, but rose to fresh session highs after the solid US 10 Year note auction. In data, US international trade for March fell to a deeper deficit than expected. In the updated Atlanta Fed GDPNow Model for Q2, it now estimates 2.2% growth vs. the prior 1.1% on May 1st. In addition, Canadian PM Carney and US President Trump met, and to open press, Trump said “no, it is what it is”, when asked if Carney could say anything to get the removal of tariffs. Nonetheless, after they met behind closed doors Senior Canadian government official said Carney’s lunch with US President Trump was constructive and Trump can’t have a Canada deal without tariffs being lifted. The US International Trade deficit in March rose to 140.5 billion from a deficit of 123.2 billion, larger than the expected deficit of USD 137 billion. Exports in March rose by USD 0.5 billion, but imports rose by USD 17.8 billion. The report also noted that the increase in the goods and services deficit reflected an increase in the goods deficit of USD 16.5 billion to USD 163.5 billion, and a decrease in the services surplus of USD 0.8 billion to USD 23 billion. Year-To-Date, the goods and services deficit increased 92.6% Y/Y, exports rose 5.2%, and imports rose by 23.3%. Looking at each trade partner, the deficit the US had with the EU was USD 48.3 billion, China USD 24.8 billion, Mexico USD 16.8 billion, Japan USD 5.8 billion, India USD 7.7 billion and Canada USD 4.9 billion. However, it had a surplus with the UK, Hong Kong, and Brazil among others. The rise in deficit in March likely continues to be driven by front-loading taking place ahead of the Liberation Day tariffs. Elsewhere, oil closed 3.4% higher while Gold surged, ending Tuesday with a further gain of 2.5%.
To mark my 3175th 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 320 points yesterday and is now ahead by 1503 points for May 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 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 0.77% lower at a price of 5606.
The Dow Jones Industrial Average closed 389 points lower for a 0.95% loss at a price of 40,829.
The NASDAQ 100 closed 0.88% lower at a price of 19,791.
The Stoxx Europe 600 Index closed 0.18% lower.
This Morning, the MSCI Asia Pacific closed 0.4% higher.
This Morning, the Nikkei closed 0.02% lower at a price of 36,833.
Currencies
The Bloomberg Dollar Spot Index closed 0.37% lower.
The Euro closed 0.31% higher at $1.1348.
The British Pound closed 0.53% higher at 1.3366.
The Japanese Yen rose 0.67% closing at $142.71.
Bonds
Germany’s 10-year yield closed 1 basis points higher at 2.54%.
Britain’s 10-year yield closed 1 basis points lower at 4.51%.
U.S.10 Year Treasury closed 4 basis points lower at 4.31%.
Commodities
West Texas Intermediate crude closed 3.38% higher at $59.06 a barrel.
Gold closed 2.46% higher at $3416.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone and U.K. Construction PMI at 8.30 am, 9.00 am and 9.30 am respectively. Next, we have Euro-Zone Retail Sales at 10.00 am, followed by U.S. MBA Mortgage Applications at 12.00 pm. Finally, we have the FOMC Statement at 7.00 pm followed by the Powell Press Conference at 7.30 pm.
Cash S&P 500
Apart from the overnight action, Tuesday was a boring day, with the market falling to start and basically trading sideways. This evening, of course, will be the FOMC meeting, and I do not expect anything material to come from it. There is no dot plot, and I do not think enough has changed from the last time Fed Chair Powell spoke that his communication will be all that different. So instead, as with other recent meetings, the market’s attention press conference at 7.30 pm as investors seek clues on what the central bank might do in the months ahead. Since the last Fed meeting and press conference in mid-March, President Donald Trump has called for lower interest rates a few times, saying Powell’s “termination couldn’t come fast enough!” Then he changed his tone a few days later by saying he never intended to fire Powell or see him dismissed. Powell won’t decide to cut rates only because Trump wants him to. He and his fellow Fed members will be taking their cues mainly from the numbers. And those numbers continue to provide mixed messages. The pace of inflation fell in much of 2024 before recovering late last year and into early 2025 and then flipped into month-over-month deflation territory in March’s consumer price index (“CPI”) reading. Meanwhile, U.S. GDP declined in the first quarter, while weakness in the labor market is starting to bubble to the surface. Powell and the Fed already showed in the fall that they would lower rates if they saw labor-market weakness. The problem was when the Fed cut rates by 50-basis points in September the 10-year Treasury yield and inflation expectations took off higher, while the market was rising in expectation of a business-friendly Trump election win in November. So, Powell may be more hesitant to cut rates again – barring a significant economic slowdown. Is that coming? Is it already here? Depending on your perspective, either we are halfway toward a “technical” recession (two straight quarters of declining GDP growth) or the first quarter of 2025 will be a quirky footnote on a path of long-term economic prosperity. The Fed last met before Trump’s “Liberation Day” tariffs. Powell said then that the central bank was in “wait and see” mode on tariffs. Everyone is still waiting and seeing about some major details, but now the Fed should be closer to reacting. Futures traders see a slightly better than 50-50 shot that the Fed will lower rates by July, and they have ideas about multiple rate cuts by the fall. If Powell’s remarks reflect that possibility this evening, the market should not react much. But if it is anything different from investors’ expectations, the Fed Chair’s words could shake things up. Ahead of the Fed meeting, the major U.S. stock indexes were down for the second straight day. Gold was up more than 2% – also just like Monday – and is trading for more than $3,400 per ounce. Overnight, the S&P rallied to my 5670-sell level before trading lower to my 5642 T/P level and I am now flat. As I go to post, the S&P is lower at 5634. We have strong resistance from 5685/5715 where I will again be a seller with a higher 5731 ‘Closing Stop’. My only interest in buying the S&P is on a large move lower to 5480/5510 with a 5465 ‘Closing Stop’. If I am taken short, I will have a T/P level at 5657. If I am taken long, I will have a T/P level at 5542.
EUR/USD
I am still flat. The market is hoping for some clarity from tomorrow’s FOMC Statement and Powell press conference. The Euro has support below from 1.1150/1.1230 where I will continue to be a buyer with the same 1.1085 ‘Closing Stop’. Meanwhile, I will continue to be a seller on any further rally to 1.1420/1.1520 with the same 1.1605 ‘Closing Stop’. If I am taken long, I will have a T/P level at 1.1305. If I am taken short, I will have a T/P level at 1.1340.
Dollar Index
The Dollar traded lower to Tuesday’s buy range. I am now long at a price of 99.40 with a now lower 99.90 T/P level. I will add to this position on any further move lower to 98.50 while leaving my 96.95 ‘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
The Russell hit a low at 1971 yesterday, just missing my buy level before having a small rally into the close. We have strong support below from 1890/1960 where I will continue to be a buyer with the same 1825 ‘Closing Stop. If I am taken long, I will have a T/P level at 2010. Given how much the Russell is underperforming the rest of the American Indexes, I still do not want to be short the market at this time.
FTSE 100
It took a while but finally the FTSE traded lower to my 8550 T/P level on my 8590 average short position and I am now flat. The FTSE has resistance from 8630/8700 where I will again be a seller with a higher 8765 ‘Closing Stop’. If I am taken short, I will have a T/P level at 8565. I still do not want to be long the FTSE at this time.
Dow Rolling Contract
I am still flat as the Dow never came close to Tuesday’s sell range. The Dow has short-term resistance from 41450/41700 where I will again be a small seller with a tight 41905 ‘Closing Stop’. If I am taken short, I will have a T/P level at 41230. I still do not want to be long the Dow at this time.
Cash NASDAQ 100
Frustratingly, the NDX missed Tuesday’s sell range by just 10 points before falling 140 points, sitting at a price of 18900 as I go to post. Ahead of the Fed, I will not chase the market lower as I continue to look to sell the NDX from 20060/20260 with the same 20405 ‘Closing Stop’. If I am taken short, I will have a T/P level at 19930. The NDX has support below from 19580/19730 where I will be a small buyer with a 19455 ‘Closing Stop’. If I am taken long, I will have a T/P level at 19880.
December BUND
I am still flat. The Bund has resistance from 131.80/132.70 where I will be a small seller with a tight 133.55 ‘Closing Stop’. If I am taken short, I will have a T/P level at 131.80. I still do not want to be long the Bund at this time.
Gold Rolling Contract
Gold never came close to Tuesday’s buy level before rallying to close above 3400. I am still flat. I will now raise my buy level to 3280/3310 with a higher 3255 ‘Closing Stop’. If I am taken long, I will have a T/P level at 3337.
Silver Rolling Contract
I am still flat. Ahead of the FOMC Statement this evening, I will continue to be a buyer on any dip lower to 31.60/32.50 with the same 30.45 ‘Closing Stop. If I am taken long, I will have a T/P level at 33.20.
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