U.S. Equity Markets (SPX +0.4%, NDX +0.7%, RUT +0.6%, DJIA +0.7%) closed in the green and were boosted by the soft U.S. Payrolls Report and also Amazon (AMZN) (+6.2%) earnings impressing, despite Apple (AAPL) (-1.3%) disappointing. Briefly recapping payrolls, the headline printed just 12k (exp. 113k, prev. 223k), but was likely weighed on by the hurricanes and strike activity, while the unemployment rate was unchanged, as expected. Elsewhere on data, ISM Manufacturing PMI unexpectedly fell, but the notable takeaway was prices paid surprisingly surging back into expansionary territory. Sectors were mixed although Consumer Discretionary was the distinct outperformer as it was buoyed by the aforementioned AMZN earnings. The Dollar was firmer, despite selling off after the US jobs figures, as the Greenback saw a notable bid through the US afternoon and into settlement on potential ‘Trump Trade’ ahead of the US election on Tuesday (preview below). Sterling and the Swiss Franc were the distinct G10 out and underperformers, respectively, with the former the only one to end the day in the green against the Dollar as it was able to pare some of the losses seen after two consecutive days of selling in wake of the budget. For the Swiss Franc it was weighed on by soft Swiss inflation metrics. Elsewhere, oil ended the day, and week, in the green due to heightened Middle East tensions but settled at lows amid the Dollar strength. Meanwhile, Treasuries were eventually lower but initially chopped to soft NFP and hot ISM manufacturing prices ahead of a week with pivotal risk events such as the election and FOMC. Headline NFP rose by just 12k in October, well short of the expected 113k and down from the prior (revised down) 223k, with two-month net revisions at -112k (prev. +72k). The sharp headline drop is likely largely due to the recent Hurricanes; Governor Waller suggested it could knock 100k jobs off the headline print. The BLS noted that it is likely that payroll employment estimates in some industries were affected by the hurricanes; however, it is not possible to quantify the net effect on the over-the-month change in national employment, hours, or earnings estimates because the establishment survey is not designed to isolate effects from extreme weather events. It also noted that there was no discernible effect on the national unemployment rate from the household survey, which does not include unemployment. Even when accounting for a c. 100k impact (to be confirmed) on the headline, it still shows a soft report at 112k down from the prior 223k. Although the unemployment rate was unchanged at 4.1%, inline with forecasts when rounded it actually rose from 4.05-4.14%. Elsewhere, wages rose 0.4% M/M, above the 0.3% forecast and prior but Y/Y was in line at 4.0%. In regard to the Fed, Wall Street Journal guru Timiraos highlights that it will do little to alter calls for this week’s meeting where a 25bps rate cut is widely expected. ING notes that “the trend in hiring is obviously slowing and with the inflation backdrop looking less threatening, the Federal Reserve clearly has scope to move policy closer to neutral”. On Tuesday, November 5th, Americans will go to the polls to vote in the Presidential Election with the winner taking office in January 2025 for a four-year term. Republican candidate Donald Trump and Democratic candidate Kamala Harris are locked in a very tight race, and while national polls have Harris slightly in front, betting markets favour Trump, as do polls in swing states; what is certain is how momentum has shifted towards the former President in recent weeks and months. In terms of averages, FiveThirtyEight’s model assigns a 52% probability of a Trump win, and a 48% probability of Harris winning; pollster Nate Silver sees a 54% and 46% chance respectively. Republicans are clearly favoured to win the Senate, with FiveThirtyEight averages assigning an 89% probability, while the House is neck and neck, with Republicans seeing a 53% likelihood and Democrats 47%. On the night, the pivotal swing states (Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania, and Wisconsin) will be viewed to see how the election is playing out, with Pennsylvania seen as the key state, as it is likely, but not impossible, that a candidate will not win the election without it. In the polls and in recent weeks (via 538 and Nate Silver) PA has flipped to Trump. For traders, the focus will be on the Dollar, with a Trump win and a Republican sweep seen as the most bullish case for the Buck, with Commodity FX, the Yuan, and MXN amongst EMFX heavily weighed on. If Harris won, the Greenback is expected to be weaker, with commodity FX outperforming along with the Euro. Elsewhere, Oil closed 0.33% higher while Gold was soft, closing Friday with a loss of 1.8%.
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 was Made 441 points on Friday for the first trading session of November 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 0.41% higher at a price of 5728.
The Dow Jones Industrial Average closed 288 points higher for a 069% gain at a price of 42,052.
The NASDAQ 100 closed 0.72% higher at a price of 20,033.
The Stoxx Europe 600 Index closed 1.09% higher.
Last Friday, the MSCI Asia Pacific closed 0.6% lower.
Last Friday, the Nikkei closed 2.63% lower at a price of 38,053.
Currencies
The Bloomberg Dollar Spot Index closed 0.33% higher.
The Euro closed 0.4% lower at $1.0832.
The British Pound closed 0.4% lower at 1.2920.
The Japanese Yen rose 0.1% closing at $152.96.
Bonds
Germany’s 10-year yield closed 1 basis points higher 2.41%.
Britain’s 10-year yield closed 3 basis points higher at 4.39%.
U.S.10 Year Treasury closed 12 basis points higher at 4.38%.
Commodities
West Texas Intermediate crude closed 0.33% higher at $69.49 a barrel.
Gold closed 1.8% lower at $2736 an ounce.
This morning on the Economic Front we have German and Euro-Zone Manufacturing PMI at 8.55 am and 9.00 am respectively, followed by Euro-Zone Sentix Investor Confidence at 9.30 am. Finally, we have U.S. Factory Orders at 3.00 pm.
Cash S&P 500
Given how oversold some of my technical signals are I will continue to be a buyer of dips despite the S&P been close to its all-time high. On Friday the McClellan Oscillator closed at -166 and is now just one hard down day from generating a strong buy signal. The 50-Day Moving Average (5696) was tested on Thursday generating a 70 Handle rally post the NFP release on Friday. The 50 Day MA is increasing and stands at a price of 5706 this morning. This level will continue to be short-term support. On Thursday the S&P traded the whole of my buy range for a 5772 average long position before rallying to my revised 5783 T/P level. Subsequently, I bought the S&P again at an average rate of 5750. I was 50 Handles offside on this position at one stage on Thursday before emailing my Platinum Members to hold the position against the 50 MA Support line before we rallied on Friday to my 5762 T/P level and I am now flat. It looks more and more likely that Trump will win tomorrow as the ‘’Swing States’’ are going his way in the polls. The S&P has support from 5692/5708 where I will be a strong buyer with a tight 5679 ‘’Closing Stop’’. Ahead of tomorrow I do not want to be short the market. History tells us that over the last 50 years that the S&P is at least 2% higher following any initial swoon post the election results no matter who is in power. Yellen will continue to add liquidity making it extremely difficult to be short while tech buybacks are coming back next week which will add to the liquidity scenario. If I am taken long, I will have a T/P level at 5726.
EUR/USD
The Euro recorded a strong downside Key Day Reversal on Friday, and I am still flat. Normally when we see a KDR it leads to follow through over the coming sessions. I will now lower my Euro buy level to 1.0710/1.0780 with a lower 1.0645 ‘’Closing Stop’’. If triggered, I will have a T/P level at 1.0840. Despite Friday’s reversal I still do not want to be short the Euro at this time.
Dollar Index
No Change: I am still short the Dollar from last week at a price of 103.95 with a now higher 103.70 T/P level. I will add to this position on any further move higher to 104.75 while leaving my 105.25 ‘’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
I am still flat the market as the DAX never came close to Thursday’s sell range. This morning the DAX is trading at a price of 19250 as I go to press. We have short-term resistance from 19410/19510 where I will continue to be a seller with the same 19605 ‘’Closing Stop’’. If triggered, I will have a T/P level at 19340. I still do not want to be long the DAX at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash FTSE
The FTSE traded lower to my second buy level at 8090 for an 8125 average long position. Subsequently on Friday morning the market rallied to my revised 8177 T/P level and I am now flat. Given how oversold the FTSE is trading I will continue to look to buy the market on dips. The FTSE has support from 8040/8110 where I will again be a buyer with a lower 7965 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 8170.
Dow Rolling Contract
My Dow plan worked well as the market traded lower to my 41800-buy level before rallying over 500 points to an intra-day high on Friday at 42325. This move higher saw my revised 42910 T/P level triggered as emailed to my Platinum Members and I am now flat. I tried to buy the Dow again at a price of 41700 but unfortunately this price missed by just 4 points. The Dow has short-term support from 41500/41750 where I will again be a buyer with a lower 41295 ‘’Closing Stop’’. Ahead of tomorrow’s Presidential Election I still do not want to be short the Dow at this time.
Cash NASDAQ 100
I am still flat the NDX as the market never came close to Thursday’s sell range, trading at 20300 this morning. The NDX has strong support from 19780/19940 where I will be a buyer with a 19595 tight ‘’Closing Stop’’.
December BUND
Despite the much hotter than expected German CPI last week the Bund traded in a narrow range over the past two trading sessions. I am still long at an average rate of 132.10 with the same 132.50 T/P level. I will leave my 130.95 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold is trading 2% lower from where I marked prices on Thursday. Gold has strong support from 2610/2630 where I will be an aggressive buyer on any large dip to my buy area. If I am taken long, I will have a T/P level at 2672.
Silver Rolling Contract
Silver followed Gold lower on Thursday, hitting my 32.80 buy level. Compared to the May 2011 highs, Gold is higher by 44% while Silver is still trading 30% lower from where we were over 13 years ago. It makes all the sense in the world for me to keep buying Silver on Dips. I still have a large portion of Silver in my pension from the sub $20 mark. There is no doubt it would have had a higher return if it was in Gold. I will add to this position on any further move lower to 31.80 while leaving my 30.95 ‘’Closing Stop’’ unchanged. I will now lower my T/P level to 33.50. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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