U.S. Indexes closed higher following another choppy session on Friday. T-Notes initially saw downward pressure to hit lows of 109-08 in wake of a dismal consumer confidence report accompanied by surging inflation expectations. However, stocks and bonds recovered from the earlier lows into the closing bell. Aside from the University of Michigan Survey, the PPI data was soft -in fitting with CPI- but sparked little reaction. On US/China tariffs, China responded in the European morning by raising the additional tariff on US goods to 125% from 84%, matching Trump’s latest move. This initially caused risk off trade with the Dollar plummeting, seeing the Dollar Index fall sub-100. There was no response from the US Friday on China, but we will be on the lookout for any commentary in response to the move from the US over the weekend. However, CNN’s Atwood posted on X that in private talks hour before China announced new retaliatory tariffs the Trump admin warned China against such a move & again told them to request a Xi-Trump call. The next catalyst on trade will likely be any conversations between the US and China. Crude prices ultimately settled in the green after sharp losses in recent weeks, while in FX the Dollar downside was the primary driver while the New Zealand Dollar and the Euro outperformed. In US trade stocks and bonds got a helping hand from two reports released around the same time. The FT posted an interview with Fed’s Collins, who said the Fed remains absolutely ready to step in if needed to stabilise the market. Meanwhile, FBN’s Gasparino reported that Trump is listening to CEO concerns about the impact of tariffs on the economy and market, while noting the White House has already started to pivot to its growth agenda. Headline PPI declined by 0.4% M/M, well beneath the +0.2% forecast and down from the prior revised 0.1%. The headline was weighed on by a chunky 4.0% dip in Airline fares, similar to what was seen in the CPI print. Headline Y/Y rose by 2.7%, well beneath the 3.3% forecast and beneath the lowest analyst forecast of 3.0%, falling from the prior 3.2%. The core M/M declined by 0.1% (exp. +0.3%, prev. +0.1%), with the Y/Y easing to 3.3% from 3.5%, beneath the 3.6% forecast. The supercore rose by 3.4%, down from the prior 3.5%, with M/M +0.1%, down from the prior 0.4%. The soft inflation report bodes well for a soft Core PCE print too, with the chunky drop in airline fares – a component of PCE – likely to weigh on PCE prices. The other components were also softer than the prior, aside from Nursing Home Care, which ticked up to 0.2% from 0.1%. After the CPI and PPI data, Pantheon notes the data implies the core PCE deflator increased by 0.13% in March, reducing the Y/Y rate to 2.6% from 2.8% in February. The consultancy highlights their forecast for the core PCE is unchanged from their forecast after the CPI, “due to a lack of volatile movements in most of the PPI components feeding into the core PCE deflator.” The preliminary University of Michigan for April was a dismal report. The headline tumbled to 50.8 from 57.0, and well beneath the expected 54.5, with the decline, like last month’s, pervasive and unanimous across age, income, education, geographic region, and political affiliation. Conditions and expectations also sank to 56.5 (prev. 63.8, exp. 61.5) and 47.2 (prev. 52.6, exp. 50.8), respectively, with both of them printing outside the bottom end of the forecast range. The inflation expectations surged, with the 1 Year ahead lifting to 6.7% from 5.0%, the highest since 1981, while the 5 Year expectations rose to 4.4% from 4.1%. However, the inflation expectations have a distinct political bias, so it is hard to read too much into them. Highlighting this, our friends over at ZeroHedge note that Democrats’ 1 Year forecast was 7.9%, whereas Republicans had 0.9%. Despite this, the report notes that this month’s rise was seen across all three political affiliations. For the record, the survey was conducted between March 25th and April 8th, so the cut-off was just before the 9th of April, when President Trump hiked tariffs on China, but reduced reciprocal tariffs on other nations. Fed Member Williams raised his inflation forecast to 3.5-4%, due to a boost from tariffs – in February (pre-tariffs) Williams said he expects inflation to hang around 2.5% this year. Since February, he also changed his unemployment and growth view, now seeing the jobless rate climbing to between 4.5-5% this year (prev. 4-4.25%) and growth to slow considerably to 1% this year (prev. to grow around 2% this year and next). Williams said the current economy is not one of stagflation, but noted that soft data has weakened a lot, although hard data has held in so far. On Fed policy, Williams said it’s well positioned for what lies ahead and allows the Fed space to react. Regarding tariffs, there is still quite a bit of uncertainty about tariffs but there are more details; how other countries respond to tariffs is a big issue. On the economy, said there is an ‘unusually wide array’ of outcomes that lie ahead for the economy; tariffs and trade are key drivers of the huge uncertainty. Williams added that longer-term inflation expectations are anchored and they must maintain that, noting he remains fully committed to getting inflation back to 2%. Meanwhile Fed Member Collins said the current rate policy is well positioned and holding steady for now remains appropriate, though there may still be scope to lower rates later this year. She acknowledged that tighter financial conditions could restrain economic activity but emphasized that monetary policy is still positioned to reduce inflation pressures. Collins warned of both upside inflation risks and downside risks to growth, noting that the Fed must keep inflation expectations anchored and remain nimble in a highly uncertain environment. She recognized the difficulty of policy choices given the trade-offs involved and cautioned that renewed price pressures could delay the timeline for rate cuts. On tariffs, Collins said they could significantly impact the outlook by pushing core inflation “well above” 3% this year while also dampening economic growth. Collins also spoke later to the FT, noting the Federal Reserve “would absolutely be prepared” to deploy its firepower to stabilise financial markets should conditions become disorderly. However, she said markets are continuing to function well and they are not seeing liquidity concerns overall. Finally, Fed Member Kashkari said it is difficult to get a clear picture of what’s happening beneath the surface of the economy, but the Fed’s job is to ensure long-run inflation expectations remain anchored. He said he has not seen evidence that expectations are rising yet and highlighted encouraging details in the recent CPI report. However, with inflation still elevated, Kashkari expressed discomfort with a “look-through” approach to tariffs, noting that after four years of high inflation, such an approach would be riskier now than in the past. He warned the effect of tariffs suggests inflation will be going back up again, job is to ensure it does not turn to long-term inflation. The Minneapolis Fed President emphasised that the outlook depends heavily on how tariff negotiations evolve—if they drag on, it may take longer to reach the level of confidence needed to lower rates. Kashkari also stressed caution in any actions that could signal a weakening of the Fed’s commitment to reducing inflation. On market dynamics, Kashkari said the Fed has tools to provide liquidity if needed, but any intervention from the Fed or Treasury should only be done reluctantly. Kashkari thinks they are quite a ways away from the market conditions they saw in the pandemic. He is not seeing big dislocations yet, but he is seeing some stresses. Elsewhere, Oil ended Friday’s session with a gain of 2.38%, while Gold surged, closing at a new all-time high with a gain of 2.1%.
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 625 points on Friday and is now ahead by 6035 points for April 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 1.81% higher at a price of 5363.
The Dow Jones Industrial Average closed 619 points higher for a 1.56% gain at a price of 40,212.
The NASDAQ 100 closed 1.89% higher at a price of 18,690.
The Stoxx Europe 600 Index closed 0.1% lower.
Last Friday, the MSCI Asia Pacific closed 2.3% lower.
Last Friday, the Nikkei closed 2.96% lower at a price of 33,585.
Currencies
The Bloomberg Dollar Spot Index closed 1.07% lower.
The Euro closed 2.1% lower at $1.1358.
The British Pound closed 0.7% higher at 1.3058.
The Japanese Yen fell 1.43% closing at $143.52.
Bonds
Germany’s 10-year yield closed 1 basis points lower at 2.57%.
Britain’s 10-year yield closed 4 basis points lower at 4.77%.
U.S.10 Year Treasury closed 15 basis points higher at 4.50%.
Commodities
West Texas Intermediate crude closed 2.38% higher at $61.50 a barrel.
Gold closed 2.1% higher at $3237.10 an ounce.
This morning on the Economic Front we have no data of note from either the UK or the Euro-Zone. At 11.00 am we have New York One-Year Consumer Inflation Expectations. Finally, we have speeches from Fee Members Barkin, Waller Harker and Bostic at 12.00 pm, 1.00 pm, 6.00 pm and 7.40 pm respectively.
Cash S&P 500
The S&P 500 closed the week 5.70% higher, at 5363, after dropping below 4850 on April 7th for the first time since April 2024. The week began with a sharp selloff as reciprocal tariffs went live and the US and China continued to raise tariffs on each other, closing the week with 145% and 125% tariffs, respectively. Everything flipped on Wednesday when President Trump announced a 90-day pause on reciprocal tariffs as the bond market seemingly “broke” with the ten- year note yield surging over 60 basis points. This sent equities sharply higher, and stocks extended their rally Friday afternoon on comments from the White House that President Donald Trump is “optimistic” China will seek a deal with the US. Meanwhile, the European Union said its trade representative was flying to Washington on Sunday to “try and sign deals.” We also saw both CPI and PPI inflation fall by more than expected in March in another sign that the economy is cooling amid uncertainty. It appears that markets have priced-in a significant portion of recent good news and I believe that upward catalysts are beginning to stall again, with the S&P 500 now nearly +10% off of its recent low. Furthermore, while “reciprocal tariffs” were delayed, many major tariffs are still in effect including 145% tariffs on China, 25% tariffs targeting aluminum, autos and goods from Canada and Mexico not under the USMC Agreement, and 10% baseline tariffs on all other imports. On Friday, the latest consumer sentiment numbers for April came in worse than expected while inflation expectations surged to their highest level since 1981, according to the University of Michigan survey on consumers. As earnings season begins, I believe rallies will be sold over the near-term, markets are discounting how much uncertainty currently remains in the market, and the trade war is far from complete even with the 90-day pause implemented by President Trump. Turning to the technical picture, it is no secret that technicals were severely oversold heading into the April 7th low of 4835 which led the daily RSI as low as ~20 for the first time since the 2022 bear market. This also came with a sharp cross below the 5202 daily bottom Bollinger Band without a substantial relief rally since the 5695 high on April 2nd. Since then, the S&P 500 has rebounded into its 5380 downtrend resistance level, the daily RSI is back up to ~45 resistance, and the daily bottom Bollinger Band has shifted down to 5039. These are all signs of a bear market relief rally, although the rally was more prompted by President Trump’s tweet than a natural reversal in technical price action. Looking ahead, I look for the April 9th gap to be partially filled lower with a drop back toward 5100 next. Therefore, I am now bearish of the S&P 500 with a 5100 target and 5500 stop-loss. With this in mind I will lower my S&P sell level to 5460/5500 with a lower 5535 ‘Closing Stop’. If I am taken short, I will have a T/P level at 5390. The S&P has support from 5110/5150 where I will be a strong buyer with a 5075 ‘Closing Stop’. If I a taken long, I will have a T/P level at 5215. If any of these view change, I will be back with a new update for my Platinum Members.
EUR/USD
Wow! The Euro has rallied over 10% in the past four weeks something that neither the EU nor the U.S. can be happy about. My own view was that the Euro would rally to 1.20 but I thought this move would take 9/12 months not only a couple of months the way we are rallying. The Euro is severely overbought and due a retracement. However, just like Gold below it is nearly impossible to have a short position in the Euro given the current climate. One tweet from Trump of a ‘’90 Day Delay to Tariffs’’ will see the Dollar rally hard. The Euro has support below from 1.1110/1.1200 which the high from last September. I will be a small buyer on any dip to this area with a 1.1045 ‘Closing Stop’.
Dollar Index
Frustratingly the Dollar just missed Thursday’s sell range before selling off over 3% from where I marked prices on Thursday morning. This is a huge move and proves what a difficult position that America is in as the debt situation comes home to bite. Bond Yields rising over 70 Basis points in the past two weeks is almost unheard of especially in the past 30 years. The Dollar is severely oversold as shown by the 14-Day RSI printing 26 on the close Friday. We have short-term support from 98.70/99.50 where I will be a small buyer with a 96.95 ‘Closing Stop’.
Russell 2000
Thursday’s aggressive sell-off saw the Russell trade the whole of my buy range for a now 1820 average long position. I will leave my 1715 ‘Closing Stop; unchanged while lowering my T/P level to 1890. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
FTSE 100
I am still flat as the FTSE never came close to Thursday’s sell range. This morning the FTSE is trading at a price of 8120. I will now lower my FTSE sell level to 8210/8300 with a lower 8375 ‘Closing Stop’. If I am taken short, I will have a T/P level at 8140. I still do not want to be long the FTSE at this time. If this view changes, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
The Dow traded in a 4000 points range since Wednesday’s close. I am glad that I stayed flat especially as so many analysts are now saying the last Monday’s low was the bottom. With 30-Year Bonds at 5% I am not sure that this crisis is anyway close to been over. We are probably in the early stages of a massive financial reordering that will end the U.S. Dollar status as the world’s only reserve currency. We are entering a period of monetary plurality that will see the Dollar, Euro, Gold, the Chinese Yuan and Bitcoin compete as the monetary reserve currency. This transition will be extremely painful for America, which for the last 50+years has enjoyed the ‘’exorbitant’’ privilege of being able to print the reserve currency. President Trump’s trade war means this global order can no longer be financed only with the currency that America prints. Federal spending for the first half of 2025 totals $3,56 trillion, a 10% increase over the $3.25 trillion spent in the same period last year. The result is the U.S. Bond Market selling off at a scale that I have never seen before. Normally, when global market volatility strikes, investors rush into U.S. Treasury Bonds. Now, investors (most likely foreign central banks) are dumping bonds, producing declines that are virtually unprecedented. To say that America Inc is now trading as a third world country is not far from the truth something that no one of us would ever believe we would see in our lifetimes. This move higher in yields is causing a huge threat to financial institutions like Bank of America who has invested over $600 billion into long-duration, low yield mortgages (45%) and Treasury Bonds (52%) at the top of the bond market and are sitting on massive capital losses given the average yield on these investments is just 2%. The last 50 years has seen the creation of an immense financial bubble in financial bonds. That bubble is now being popped and there is going to be a lot of fireworks going forward. This will not be good for global equity markets. I am still flat the Dow. The Dow has short-term resistance from 41100/41400 where I will be a small seller with a tight 41605 ‘Closing Stop’. If triggered, I will have a T/P level at 40750.
Cash NASDAQ 100
My NDX plan worked well. The NDX traded the whole of my buy range on Thursday for a 18160 average long position before rallying to my revised 18390 T/P level. Subsequently, per emails to my Platinum Members, I bought the NDX again at 18050 before exiting at 18500 and again at 18180 before exiting this position at 18270 and I am now flat. This morning the NDX is trading higher at 18900. We have strong resistance from 19600/19900 where I will be a seller with a 20105 ‘Closing Stop’. My only interest in buy the NDX is on a dip lower to 18100/18300 with the same 17995 ‘Closing Stop’.
December BUND
My Bund call worked well as on Friday the Bund rallied to my 131.45 sell level before trading lower to my 130.80 T/P level as emailed to my Platinum Members and I am now flat. Today, I will again be a seller from 131.60/132.40 with the same 133/05 ‘Closing Stop’.
Gold Rolling Contract
Wrong! Gold prices closed last week 6.54% higher, at $3235/oz, as a faltering dollar and an escalating US/China trade war stirred recession fears, sending investors flocking to the safety of the yellow metal. After the US raised tariffs on China to 145% last week, China announced they would be raising tariffs to 125% on Friday. Meanwhile, PPI and CPI inflation both came in far weaker than expected for March which further supported gold prices. The story was largely above the US Dollar Index (DXY) which collapsed to a new 52-week low of 99.01 on April 11th. The sudden move lower sent gold above $3200 and accelerated capital rotation into safe haven assets. Furthermore, as the basis trade was unwound in bond markets and yields surged rapidly, more capital rotated out of bonds and into gold, a “golden” scenario’’. Given how oversold the Dollar is I would expect Gold to fall once the Dollar starts to recoup some of last week’s large losses. I will use a sell-off in Gold to buy the market. For now, I will stay flat until we get a badly needed retracement. On Thursday I sold Gold at an average rate of 3154 before thankfully getting stopped out of this position at 3175.
Silver Rolling Contract
No Change: I am still flat Silver as I continue to be a strong buyer on any further move lower to 28.30/29.30 with the same 26.95 ‘Closing Stop’. If triggered, I will have a T/P level at 30.20.
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