The Federal Reserve maintained its current range between 5.25% and 5.5% following their latest two-day meeting. In their Statement the Fed said current interest rates were restrictive and that they are prepared to raise rates again if appropriate. Rates will remain high until the inflation moving down to their 2% target. Three recent inflation readings have been positive, but more data is needed. The Statement said that households were in good shape due to a strong labour market and rising wages. Equity Markets initially rose on the Statement release but a poor performance from Fed Chair Powell in his press conference saw the NASDAQ 100 lead Wednesday’s declines, closing lower by 1.50%. Meanwhile both the Dollar and Treasury Yields rose with the 10-year closing at a 16-year high at 4.40%. Instacart (CART) made a strong debut, with share prices surging as much as 43% during midday trading. The company’s shares opened at $42 – significantly higher than its initial public offering (“IPO”) price of $30. Instacart and semiconductor company Arm’s (ARM) initial successes have provided much-needed relief to the IPO market stricken by a nearly two-year drought in activity. The momentum carried between the two firms could spark activity from other companies planning to go public. And joining the ranks are footwear maker Birkenstock and data-automation provider Klaviyo, which have already planned to list. Amazon (AMZN) is feeling good about this year’s holiday shopping season. The company wants to recruit 250,000 full-time, part-time, and seasonal workers for its logistics division. Wages would range from $17 to $28 per hour, depending on location. The announcement comes at a time when many other retailers are scaling down their holiday workforce projections, with hiring expected to be at its lowest rate since 2008. Amazon’s ambitious plan underscores the company’s position as a major player in the online-retail industry and its projections for holiday demand. European Markets closed higher. The Consumer Price Index for August rose 6.7% year-on-year, slightly declining from last month’s 6.8% gain. However, the bigger surprise is that this comes in well below estimates that predicted a 7% gain as a result of higher rental prices and energy costs. The latest inflation figures have now caused investors to believe that the Bank of England will not raise interest rates this afternoon, with markets pricing in less than a 50% chance of a rate hike. Despite the positive news, the U.K. still holds the highest inflation rates among developed economies. As a result, the central bank is unlikely to dismiss potential future rate increases, should it decide to maintain the current rates this week. Global debt reached a record $307 trillion in the second quarter of 2023, led by Japan and the U.S. The Institute of International Finance (“IIF”) reported global debt surged $10 trillion in the first half of 2023 – and $100 trillion over the past decade. More than 80% of the recent debt buildup comes from developed nations, with the U.S., Japan, the U.K., and France contributing the largest increases. Even Emerging Markets saw notable increases, particularly in China, India, and Brazil. With the expectation of higher rates for longer, Emerging Markets could potentially face increased pressure as investments shift toward the more stable, developed countries. According to the Organization for Economic Cooperation and Development (“OECD”), the global economy is expected to slow, with growth rates dropping to 2.7% in 2024. Excluding the pandemic, this follows a lacklustre 3% growth in 2023, marking the weakest expansion since the Global Financial Crisis. The double-edged sword of stagnation and increasingly persistent inflation has the OECD concerned about a future economic slowdown. China’s economic struggles were also highlighted as a key risk to global output. The OECD has cautioned against stimulating growth with increased government spending to avoid enabling inflationary pressures. In Asia, Chinese regulators announced a probe into hedge funds and brokerages amid a public outcry on the current equity market weakness. Elsewhere, Oil fell 1.01% while Gold again closed flat.
To mark my 2875th 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 firstname.lastname@example.org for details
For anyone following my Platinum Service it lost 114 points yesterday and is now ahead by 442 points for September, after finishing August with 1485 points gain 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 3164 points in February, 4687 points in January 2054 points in December, 4789 points in November and 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
The S&P 500 closed 0.94% lower at a price of 4402.
The Dow Jones Industrial Average closed 76 points lower for a 0.22% loss at a price of 34,440.
The NASDAQ 100 closed 1.46% lower at a price of 14,970.
The Stoxx Europe 600 Index closed 1.13% lower.
This morning, the MSCI Asia Pacific closed 1.1% lower.
This morning, the Nikkei closed 1.37% lower at a price of 32,571.
The Bloomberg Dollar Spot Index closed 0.13% higher.
The Euro closed 0.2% lower at $1.0655.
The British Pound closed 0.4% lower at 123.42.
The Japanese Yen fell 0.2% closing at $148.18.
Germany’s 10-year yield closed 4 basis points lower at 2.70%.
Britain’s 10-year yield closed 10 basis points lower at 4.25%.
U.S.10 Year Treasury closed 6 basis points higher at 4.40%.
West Texas Intermediate crude closed 1.01% lower at $90.28 a barrel.
Gold closed 0.1% lower at $1930.10 an ounce.
This afternoon on the Economic Front we have the Bank of England Rate Announcement where I am expecting no change after yesterday’s better than expect inflation report. At 1.30 pm we have U.S. Weekly Jobless Claims and the Philly Fed Manufacturing Survey. Finally, at 3.00 pm we have Existing Home Sales and Euro-Zone Consumer Confidence.
Cash S&P 500
A poor press conference form Fed Chair Powell saw the S&P fall over 70 Handles from its 4461 high print made before the FOMC Statement was published. Powell’s press conference was muddled making no coherent sense in projecting a soft landing, insisting it was not a baseline and then later called it a prime objective while at the same time admitting they have no clue whether their forecasts are at all accurate. In short, his press conference was all over the map and expressing a very different sense of confidence on soft landing in comparison to Treasury Secretary Yellen’s comments on Tuesday. Markets hate uncertainty and Powell’s waffling, and projected uncomfortable stance seeded a lot of doubt leading to the post press conference sell-off. The big question is now is whether the bears will regain control and drive the S&P lower to its next main target level at 4373 which is the 100-Day Moving Average. Yesterday’s move lower saw the whole of my buy range filled for a now 4413 average long position. This morning the S&P is trading lower at 4390. Internals fell hard yesterday while surprisingly the $BPSPX RSI rose to close at 29. Despite the higher Treasury Yields, Junk Bonds continue to hold support. In summary, we are seeing a number of positive divergences despite yesterday’s aggressive sell-off. I will leave my 4389 ‘’Closing Stop’’ unchanged while lowering my T/P level to 4422. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Higher Treasury Yields saw the Dollar soar yesterday, resulting in the Euro hitting my 1.0652 buy level just before the New York close. I am still long and will continue to look to add to this position at 1.0590 while leaving my ‘’Closing Stop’’ unchanged at 1.0525. I will now lower my T/P level to 1.0705. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
September Dollar Index
Thankfully, the Dollar traded lower to my 104.85 T/P level on my latest 105.00 short position before rallying 60 points on Treasury Yields hitting 4.40%. This morning the Dollar is trading at 105.50. We have further resistance from 105.85/106.55 where I will again be a seller with a higher 107.05 ‘’Closing Stop’’.
No Change. I am still a buyer on any dip lower to 15500/15580 with the same 15425 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 15650.
The FTSE continues to outperform the other main Indexes, helped by yesterday’s better than expected inflation data. All eyes are on the Bank of England Rate announcement at 12.00 pm. I am expecting the Bank to pause rate hikes after 15 consecutive rate increases over the past 18 months. Today I will continue to be a buyer on any dip lower to 7560/7640 with the same 7495 ‘’Closing Stop’’.
Dow Rolling Contract
The Dow made an afternoon high at 34775 before falling over 400 points. This initial move higher saw the Dow hit my 34640 T/P level. Subsequently, I emailed my Platinum Members to buy the Dow again which I did at a price of 34430. I am still long and I will add to this position at 34160 with the same 34055 ‘’Closing Stop’’. I will have a T/P level at 34520 on this position. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
Wrong! The NDX got hit hard for the second consecutive trading session stopping me out of my 15254 aggressively long position at 15045 and I am now flat. Powell’s worst press conference since he took office saw all my bullish technical wiped out in the last hour of trading. Higher Treasury Yields and much The NDX has support at 14750. Today, I will be a small buyer from 14700/14850 with a 14595 ‘’Closing Stop’’ which is just below the August low print. If I am taken long, I will have a T/P level at 14990.
No Change. I am still long at an average rate of 130.05 with the same 129.25 ‘’Closing Stop’’. I will now lower my T/P level to 130.30. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
I am still flat Gold as the market never came close to yesterday’s buy range. Given the strength of the 1960/2000 resistance area I am reluctant to chase the price of Gold higher. Meanwhile, I have no interest in being short despite the strong resistance above. Therefore, I will stay flat until we see how the price action plays out.
Silver Rolling Contract
Despite the stronger Dollar saw Silver closed unchanged at 23.30 yesterday. I am still long and I will leave my 24.25 T/P level unchanged on my 24.05 long position. I have had this position for over two weeks now which is too long and I will reassess if this level is triggered. Meanwhile, I will now raise my stop to a ‘’Closing Stop’’ at 22.45. If any of the above levels are hit, I will be back with a new update for my Platinum Members.