US Indices ended Friday mixed (SPX -0.1%, DJIA +0.3%, RUT +0.7%) with the tech-heavy NASDAQ 100 (-0.5%) underperforming, and weighed on by Nvidia (NVDA) (-2.1%) after China urged local companies to stay away from its AI chips. Sectors closed predominantly in the green, with Energy outperforming while Tech and Materials were the only ones in the red with the former the distinct laggard on the aforementioned Nvidia news. Energy was supported by the crude complex which saw some gains, and is hovering around session highs at pixel time, after Israel bombed Hezbollah’s HQ in Beirut. In wake of the attack, it was confirmed Hezbollah’s Chief Nasrallah had been killed. As such, bonds also caught a bid on the heightened geopolitics, but the FX space was largely unmoved. The Dollar saw slight losses while the Japanese Yen was the clear G10 gainer to end the week after hawkish candidate Ishiba won the Japanese LDP leadership race to become the next Japanese PM. On the data footing, the highlight was US PCE (Aug) data, whereby it was largely softer than expected, highlighted by the headline M/M & Y/Y, core PCE M/M, and consumption all 0.1% beneath consensus, but it did little to Fed money market pricing. Final University of Michigan for September was revised higher, as was current conditions and forward-looking expectations, while inflation expectations were left unrevised for the 1yr and 5yr at 2.7% and 3.1%, respectively. Core PCE rose 0.13% in August, in line with the 0.15% forecast and prior 0.16%. The Y/Y print rose by 2.2%, accelerating from the prior 2.6% pace, but in line with the 2.7% forecast. On an annualised basis, the 6month rate fell to 2.4%, the lowest since December, with the 3mth rate at 2.1%. The headline PCE rose 0.09% (exp. 0.1%, prev. 0.16%), with the Y/Y rising 2.2%, beneath the 2.3% forecast and falling from the prior 2.5%. Although Core Y/Y accelerated, it was in line with forecasts but does show the Fed still has some work to do to get inflation down to target. Nonetheless, the headline of 2.2% and annualised metrics are all welcome signs with minimal m/m inflation seen. Governor Waller had suggested that Core PCE M/M was going to come in at 0.14%, while Kugler expected Y/Y core at 2.7%, suggesting the data is in line with the Fed’s forecasts, and the latest median summary of economic projections see Core PCE at 2.6% by year-end, with the headline at 2.3%. Meanwhile, Oxford Economics suggest consumer prices are on track to hit the 2% target in September, adding the key drivers of inflation suggest underlying price pressures will continue to fade over the coming months. The desk adds that “With few signs layoffs are rising, we anticipate consumer spending will continue at a solid pace over the coming year. Amid fading inflation, the Fed will still move rates closer to a neutral setting, but the resilience of the economy points to a more gradual pace of rate cuts ahead.” Elsewhere in the report, Consumption rose 0.2%, beneath the 0.3% forecast and down from the 0.5% prior, while income rose 0.2%, beneath the 0.4% forecast and 0.3% prior. Real consumption rose just 0.1%, down from the prior 0.4%, and Oxford Economics suggests that the modest increase leaves consumption growth on track for growth of 3% annualised in Q3; the latest Atlanta Fed GDP Now estimate is tracking growth at 3.1% vs the 3.0% in Q2. Fed Member Musalem in an FT interview said the Fed should lower interest rates ‘gradually’. He added the US economy could react “very vigorously” to looser financial conditions, stoking demand, and prolonging the Fed’s mission to beat inflation back to 2%. The 2025 voter added, “For me, it’s about easing off the brake at this state. It’s about making policy gradually less restrictive”. On the labour market, said mass lay-offs did not appear “imminent”. Looking ahead, Musalem added he is “attuned to the fact that the economy could weaken more than I currently expect [and] the labour market could weaken more than I currently expect”, and “If that were the case, then a faster pace of rate reductions might be appropriate.” On the economy, said risks of it weakening or heating up too quickly were now balanced, and the next rate decision would depend on data at the time. Regarding future cuts, Musalem said he sees more than one additional 25bps cut for rest of 2024. On the last meeting where the Fed cut by 50bps, he pushed back on the idea it was a ‘catch-up cut’ and said inflation had fallen far faster than he had expected, and it was appropriate to begin with a strong and clear message to the economy that we’re starting from a position of strength. Elsewhere, Oil closed 0.75% higher while Gold was flat. Overnight the Nikkei got slammed, falling almost 2000 points for a 4.8% loss. Global Equity Futures Markets are opening lower across the board this morning. 

To mark my 3075th 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 340 points on Friday and is now ahead by 4362 points for September having ended August with a loss of 301 points 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 0.13% lower at a price of 5738.

The Dow Jones Industrial Average closed 137 points higher for a 0.33% gain at a price of 42,313.

The NASDAQ 100 closed 0.53% lower at a price of 20,008.

The Stoxx Europe 600 Index closed 0.47% higher.

This morning, the MSCI Asia Pacific closed 0.6% lower.

This morning, the Nikkei closed 4.8% lower at a price of 37,919.

Currencies 

The Bloomberg Dollar Spot Index closed 0.10% lower.

The Euro closed 0.3% higher at $1.1164.

The British Pound closed 0.4% higher at 1.3374.

The Japanese Yen rose 1.2% closing at $142.18.

Bonds

Germany’s 10-year yield closed 4 basis points lower 2.14%.

Britain’s 10-year yield closed 3 basis points lower at 3.98%.

U.S.10 Year Treasury closed 4 basis points lower at 3.75%.

Commodities

West Texas Intermediate crude closed 0.75% higher at $68.18 a barrel.

Gold closed 0.05% higher at $2658 an ounce.

This morning on the Economic Front we already had the release of the U.K. Final GDP which printed +0.5% versus +0.6% q/q preliminary. At the same time we had the release of the German Import Price Index which fell 0.4% versus -0.3% expected. Next, we have U.K. Mortgage Approvals at 9.30 am followed by German CPI at 1.00 pm. At 2.45 pm we have Chicago PMI, followed by the Dallas Fed Manufacturing Index at 3.30 pm. Finally, we have speeches from Fed Member Bowman at 1.50 pm and Fed Chair Powell at 6.55 pm.

Cash S&P 500

My S&P plan again worked well as the market rallied to my 5772-sell level shortly after I posted on Thursday morning before selling off to my 5752 T/P level and I am now flat. The S&P could not confirm the new high made in the Dow on Friday. However, despite the late sell-off in the S&P into the Chicago close 67% of the stocks comprising the Index closed higher which suggests that the Index was stronger than the final close on Friday suggests. As we head into the seasonally weak October timeframe, I will continue with my strategy of selling rallies. The S&P has resistance from 5753/5773 where I will again be a seller with a 5791 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 5735. I will now raise my buy level slightly to 5628/5648 with a higher 5606 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 5669. If this view changes, I will be back with a new update for my Platinum Members.

EUR/USD

The Euro continues to trade between 1.1120 and 1.1220 and I am still flat. The Euro has resistance from 1.1230/1.1300 where I will be an aggressive seller with a 1.1375 ‘’Closing Stop’’. My only interest in buying the Euro is on a large dip lower to 1.0980/1.1060 with a higher 1.0915 ‘’Closing Stop’’.

Dollar Index

Late Friday the Dollar traded lower to my 100.30 buy level. I am still long with the same 100.80 T/P level. I will continue to look to add to this position on any further move lower to 99.60 while leaving my 98.95 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.

Cash DAX

You just cannot be short the German Stock Market under any circumstance as every single dip no matter how small is aggressively bought despite the ever-worsening economic backdrop. Shortly after I posted on Thursday the DAX trade the whole of my sell range for a 19190 average short position. Thankfully the DAX reversed from the 19300 level to hit my revised 19195 exit level as emailed to my Platinum Members and I am now flat. This morning the DAX is trading higher at 19400. We have further resistance from 19480/19580 where I will again be a small seller with a wider 19675 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 19400. I still do not want to be long the DAX at this time.

Cash FTSE

In contrast to the DAX below the FTSE continues to struggle to rally as the market trades in narrow daily ranges. I am still flat. Despite how heavy the FTSE is trading I have no interest in pressing the short side. The FTSE has short-term support from 8150/8230 where I will again be a buyer with the same 8065 wider ‘’Closing Stop’’. I still do not want to be short the FTSE at this time. If I am taken long, I will have a T/P level at 8280.

Dow Rolling Contract

My Dow plan worked well as the market traded the whole of my sell range on Friday afternoon for a 42510 average short position. The Dow made a new intra-day high at 42625 before falling over 300 points into the close. This move lower saw my revised 42350 T/P level triggered and I am now flat. The initial surge in the Dow looked like a computer buy programme was triggered shortly after the open. Although the Dow has held up much longer than I anticipated I still believe the correct strategy is to keep selling the market on rallies. This scenario has worked really well for the past few weeks. One of these upcoming intra-day sell-offs is not going to come back leading to a market that finally will see a more sustained correction. This is what I am hoping for especially as we head into the seasonally weak October. Today, I will again be a seller of the Dow from 42500/42750 with a higher 42905 ‘’Closing Stop’’. I still do not want to be long the Dow at this time. If this view changes I will be back with a new update for my Platinum Members.

Cash NASDAQ 100

Thursday’s surge in the NDX did not last with the market quickly falling 300 points from its 20325 intra-day high. This move lower saw my revised 20050 exit level triggered on my latest 20025 average short position and I am still flat. This morning, the NDX is trading lower a price of 19950 as I go to press. We have resistance from 20120/20280 where I will again be a seller with a higher 20405 ‘’Closing Stop’’. Despite the positive price action over the past two weeks I still do not want to be long the NDX at this time.

December BUND

No Change: The boring sideways price action in the Bund shows no sign of ending. I am still flat. Given how weak the Dollar is I will now raise my Bund sell level to 135.40/136.10 with a higher 136.75 ‘’Closing Stop’’. I no longer want to be a buyer of the Bund at this time. If I am taken short, I will have a T/P level at 134.80.

Gold Rolling Contract

Gold had traded in a narrow range since last Thursday’s Commentary, and I am still flat. Given how overbought Gold is trading at this time I will not chase the market higher. I am not brave enough to put on a short position given the geo-political risk from the Middle East. Gold has short-term support from 2570/2588. I will continue to be a buyer on any dip to this area with the same 2559 tight ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2602.

Silver Rolling Contract

Overnight Silver finally traded lower to my initial 31.30 buy level. I am still long with a now lower 31.90 T/P level. I will continue to look to add to this position on any further move lower to 30.40 while leaving my 28.95 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.