U.S. Indices saw broad-based weakness on Tuesday (SPX -1.1%, DJIA -0.4%, RUT -0.7%) with underperformance in the Nasdaq 100 (-1.8%) as macro moves were seen in wake of a hot US ISM Services and JOLTS report. Recapping the data, the latter rose above the top end of of analyst forecast ranges, while ISM Services topped, accompanied by a notable upside in the prices paid, and with employment little changed. As such, the data took T-Notes to lows and pushed the Dollar higher, reversing earlier session troughs, to the detriment of all G10 FX peers. In addition, Antipodeans pared European strength, while the Swiss Franc was further weighed on after being hit in the European morning on soft core CPI. Meanwhile the Canadian Dollar was also under pressure following President-elect Trump comments that something will have to be done with Canada and Mexico trade. Elsewhere, the US 10 Year Treasury Auction was soft with similar dynamics to the 3 Year results on Monday, albeit garnered little market reaction. The crude complex saw slight gains and managed to hold onto its morning strength from initial Dollar weakness, despite a reversal in the Dollar after a strong ISM Services report. Sectors were largely in the red with only Energy and Health in firmer territory, buoyed by crude gains and strength in vaccine names, respectively. Technology and Consumer Discretionary were the clear laggards amid broad based weakness in Mag7 names. Apple (AAPL) (-1.1%) and Tesla (TSLA) (-4.1%) were both downgraded, while Nvidia (NVDA) (-6.2%) pared its initial pre-market strength in wake of CES 2025. ISM Services PMI for December lifted to 54.1 from 52.1, and above the expected 53.3. New orders and business activity rose to 54.2 (prev. 53.7) and 58.2 (prev. 53.7), respectively, while the inflationary gauge of prices paid disappointingly soared to 64.4 from 58.2. Employment was more-or-less unchanged at 51.4 (prev. 51.5). Inventories lifted, but remained sub-50, while backlog of orders and imports dipped, whereas new export orders and supplier deliveries lifted back into expansionary territory. The report added that the past relationship between Services PMI and the overall economy indicates that the headline corresponds to a 1.7 point increase in real GDP on an annualised basis. In addition, the survey adds, many industries noted that end-of-year and seasonal factors were helping drive business activity or impact inventory management. Some of the increased business activity seems to have been driven by preparation for demand in the new year, or risk management for impacts from port strikes and potential tariffs. Furthermore, the survey states, there was general optimism expressed across many industries, but tariff concerns elicited the most panellist comments. Headline JOLTS in November rose to 8.1 million from 7.74 million, and above the consensus 7.7 million – it was also above all analyst forecasts. Within the report, the quits rate eased to 1.9% from 2.1% while the vacancy rate rose to 4.8% from 4.7%. On the headline, Oxford Economics point out that the South accounted for 75% of the increase in job openings, and the increase in that region might be an extension of the rebound following the September drop due to Hurricane Helene. Regarding the drop in the quits rate, the consultancy notes it is consistent with the slower pace of hiring and signals further deceleration in wage growth. OxEco also note the ratio of openings to unemployed workers ticked up to 1.11 from 1.10 over a three month moving average basis, which is still below pre-pandemic levels and therefore does not signal a renewed tightening in the labour market. Overall, OxEco note this is unlikely to alter the Fed’s conviction that a slower pace of normalising interest rates in 2025 is appropriate. The US deficit widened to 78.2 billion in November, from the prior deficit of USD 73.6 billion, deeper than the expected deficit of 78 billion. Exports rose by USD 7.1 billion to USD 273.4 billion, while imports rose USD 11.6 billion to USD 351.6 billion. Exports were driven by a USD 6.2 billion increase in exports of goods, while exports of services rose by 0.9 billion. Imports of goods rose by USD 11.6 billion, while imports of services rose by less than 0.1 billion. Analysts at Oxford Economics highlight that despite the widening of the deficit, net trade is on track to be slightly positive or neutral to GDP growth in Q4, the first time since Q4 2023, due to imports seeing a modest decline while exports have managed a small increase. However, the desk acknowledge there is uncertainty on this with the potential for another dockworkers strike in mid-January. Nonetheless, looking ahead uncertainty on trade policy from the Trump administration is the greater risk. Washington Post reported that Trump is to pare back his aggressive trade policy, but President-elect Trump denied this. Elsewhere, Oil closed 1% higher while despite a weaker Dollar, Gold ended Tuesday with a gian of 0.5%.
To mark my 3100th 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 made 430 points yesterday and is now ahead by 241 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 1.11% lower at a price of 5909.
The Dow Jones Industrial Average closed 178 points lower for a 0.42% loss at a price of 42,528.
The NASDAQ 100 closed 1.79% lower at a price of 21,173.
The Stoxx Europe 600 Index closed 0.83% higher.
This morning, the MSCI Asia Pacific closed 0.3% lower.
This morning, the Nikkei closed 0.26% lower at a price of 39,981.
Currencies
The Bloomberg Dollar Spot Index closed 0.33% higher.
The Euro closed 0.35% lower at $1.0345.
The British Pound closed 0.3% lower at 1.2481.
The Japanese Yen fell 0.1% closing at $157.86.
Bonds
Germany’s 10-year yield closed 2 basis points higher 2.47%.
Britain’s 10-year yield closed 7 basis points higher at 4.69%.
U.S.10 Year Treasury closed 7 basis points higher at 4.69%.
Commodities
West Texas Intermediate crude closed 0.98% higher at $74.28 a barrel.
Gold closed 0.5% higher at $2649 an ounce.
This morning on the Economic front we already had the release of German Industrial Orders which fell a huge 5.4% versus 0.0% expected and Retail Sales which printed -0.6% versus +0.5% expected. Next, we have Euro-Zone PPI and Consumer Confidence at 10.00 am. This is followed by U.S. MBA Mortgage Applications at 12.00 pm and the ADP Employment Report at 1.15 pm. At 1.30 pm we have Weekly Jobless Claims and a speech from Fed Member Waller and Wholesale Inventories which will released at 3.00 pm. Finally, we have a 30-Year Treasury Auction at 6.00 pm and the FOMC Minutes from the December Meeting at 7.00 pm.
Cash S&P 500
One major market impact this year will be political commentary and unpredictability. We all remember the first Trump Presidency where literally he was using his Twitter Feed to make market moving statements. A new element of volatility may end up been Elon Musk who is now closely linked with Trump. Musk seems to be on a path of attacking the leadership of every Western Democracy with obsessive tweets that number in the hundreds, calling for the jailing of political leaders all over the place. Political leaders from the U.K, Norway, Germany and France have already repudiated Elon and given his global power access with business, politics and as owner of X he is an elephant in a china shop apparently trying to shape global politics and influencing elections to his liking. The main point that I want to make: W e should expect a lot of political volatility this year where sudden news headlines can move price around every which way with very little warning. So do not be surprised when it happens. Yesterday, the S&P traded lower to my initial 5945 buy level before thankfully rallying to my 5963 T/P level. Subsequently, I emailed my Platinum Members to buy the S&P again which I did at a price of 5894 before rallying to my revised 5906 T/P level and I am now flat. The S&P has support below from 5850/5866 where I will again be a buyer with a lower 5835 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 5883.
EUR/USD
I am still flat the Euro despite yesterday’s sell-off as the market so far has missed Tuesday’s buy range. Today, I will continue to be a buyer on any dip lower to1.0250/1.0320 with the same 1.1065 ‘’Closing Stop’’.
Dollar Index
No Change: Today, I will again be a seller on any further rally to 108.80/109.50 with a higher 110.15 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 108.30.
Cash DAX
The DAX continues to defy logic and is nearly back to all-time highs. Technically we have a bear flag where bears need to make a stance or else we will trade back above the November highs. Yesterday’s move higher saw the DAX hit my sell range for a now 20330 short position. I will add to this trade on any further move higher to 20460 with a now higher 20555 ‘’Closing Stop’’. Despite the awful Retail Sales and Industrial Orders reported this morning the DAX refuses to trade lower. As a result I will now raise my T/P level on my short position to 20270. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash FTSE
I am still flat as the FTSE again traded in a narrow range over the past 24 hours. This morning, the FTSE is trading at a price of 8240 as I go to press. I will now raise my FTSE buy level to 8120/8200 with a higher 8065 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 8250. I still do not want to be short the FTSE at this time. If this view changes, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
Late yesterday the Dow traded lower to my buy range for a 42400 long position before rallying into the close to my 42530 T/P level and I am now flat. The Dow has further support below from 41950/42200 where I will again be a strong buyer with a lower 41795 tight ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 42380. Ahead of this evening’s FOMC Minutes I no longer want to be short the Dow at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
The NDX led Tuesday’s sell-off, trading the whole of my buy range for a now 21230 average long position. I will leave my 20055 ‘’Closing Stop’’ unchanged while lowering my T/P level to 21280. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
March BUND
Shortly after I posted yesterday morning the Bund sold off to my 132.15 buy level. It will be interesting to see if this evening’s FOMC Minutes give any support to Global Bond Markets given the rise in Yields over the past few weeks. Higher Bond Yields are not what the Treasury wants know given the level of global debt. I will add to this position on any further move lower to 131.45 while leaving my 130.95 ‘’Closing Stop’’ unchanged. I will now lower my T/P level to 132.75. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
No Change: I am still flat Gold despite Friday’s volatile trading session which witnessed plenty of two-way price action. As I am still long Silver, I have no interest in chasing the price of Gold higher. Therefore, I will continue to be a buyer on any dip lower 2575/2591 with the same 2559 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2603.
Silver Rolling Contract
No Change: I am still long Silver at an average price of 30.95 with the same 28.95 ‘’Closing Stop’’. I will leave my 31.40 T/P level unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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