U.S. Equity Markets were choppy on Wednesday with Nvidia (NVDA) down again ahead of its much-anticipated earnings release after hours with options market implying a c. 11% move. There was no US data again to digest with muted FX volume. However, Treasuries were sold through the US session with another slew of corporate debt – including USD 13.5billion from Cisco (CSCO) – and an awful 20year auction, which tailed 3.3bps, the largest on record; note that Bunds saw much greater weakness to fresh YTD lows in lack of an obvious catalyst ahead of the Flash PMIs on this morning. The FOMC Minutes were a typical non-event, echoing the broader tone of Fed Speak seen in wake of the January Fed meeting, cautioning about the risks of cutting too soon. Oil prices were firmer in lack of much change in the fundamentals ahead of inventory figures, although there was a brief dip (which was swiftly bought) after an Israeli official said there are signs indicating a possible hostage deal. Natural Gas Futures surged higher off of multi-year lows with the sector rejoicing on the back of Chesapeake slashing its production guidance. In stocks, Natural Gas producers benefitted from the price rise. Homebuilders outperformed after Toll Brothers (TOL) earnings report. Software was hit after Palo Alto Networks (PANW) slashed its billings guidance. China stocks are on watch Thursday on the back of Bloomberg reports China is said to be tightening its grip on stocks with a net sale ban at the open and close. In after hours, Nvidia reported much stronger than expected earnings. Adjusted EPS $5.16, smashing estimates of $4.53
Revenue $22.10 billion, up 265% from $6.05 billion y/y, and beating the estimate $20.41 billion
Data centre revenue $18.4 billion, up 409% from $3.62 billion y/y, beating estimates of $17.21 billion
Gaming revenue $2.9 billion, up 58% y/y from $1.8 billion, and beating estimates of $2.72 billion
Professional Visualization revenue $463 million, up 11% from $226 million y/y, and beating the estimate of $435.5 million
Automotive revenue $281 million, down 4.4% from $294 million, and also beating estimates of $272.1 million.
Nasdaq Futures are higher by over 220 points as I go to press.
The latest Fed Minutes confirmed that most policymakers were cognizant of the risks of easing too quickly although a couple pointed to downside risks from maintaining an overly restrictive stance for too long. Officials also highlighted the uncertainty around how long a restrictive policy stance would be needed for. Officials had judged that the policy rate is likely at its peak for this cycle, while several emphasised the importance of communication clearly about their data-dependent approach. On inflation, the Minutes noted that while risks to achieving dual-mandate goals were in better balance, officials noted they remained ‘highly attentive’ to inflation risks. Policymakers generally noted they did not forecast it as appropriate to lower the Funds Rate until gaining ‘greater confidence’ in inflation moving sustainably toward 2%, a line that has been heard numerous times from several Fed officials recently. Some officials also cautioned that progress on inflation could stall. Some more details on the balance sheet were revealed, the Minutes said that reductions in the overnight RRP usage saw many officials state it would be appropriate to start in depth balance sheet discussions at the next meeting (as expected). A few had said a balance sheet runoff could continue after rate cuts began and some said slowing the pace of the balance sheet runoff could help smooth the transition to ample reserves and could allow the balance sheet runoff to continue for longer. Within the Minutes, the staff’s economic outlook was slightly stronger than what was seen in December while staff placed “some weight” on the chance that further progress on lowering inflation could take longer than expected. Staff also characterised the US Financial system vulnerabilities as notable, adding that risks to the economic forecast were skewed to the downside. On the release, Morgan Stanley quipped the “FOMC Minutes revealed policymakers strayed far from focusing solely on near term policy and discussed a range of macro topics… This is a Committee with plenty of time on its hands to determine its next move”. Elsewhere, Oil closed higher by 1.13% while Gold again closed flat.
To mark my 2925th 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 was made 260 points yesterday and is now ahead by 1351 points for February 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 points, 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% higher at a price of 4981.
The Dow Jones Industrial Average closed 48 points higher for a 0.13% gain at a price of 38,612.
The NASDAQ 100 closed 0.38% lower at a price of 17,478.
The Stoxx Europe 600 Index closed 0.17% lower.
Yesterday, the MSCI Asia Pacific closed 0.6% lower.
Yesterday, the Nikkei closed 0.26% lower at a price of 38,262.
Currencies
The Bloomberg Dollar Spot Index closed 0.08% lower.
The Euro closed 0.1% higher at $1.0816.
The British Pound closed 0.1% higher at 1.2634.
The Japanese Yen fell 0.2% closing at $150.34.
Bonds
Germany’s 10-year yield closed 6 basis points higher at 2.45%.
Britain’s 10-year yield closed 6 basis points higher at 4.11%.
U.S.10 Year Treasury closed 3 basis points higher 4.32%.
Commodities
West Texas Intermediate crude closed 1.13% higher at $77.91 a barrel.
Gold closed 0.1% higher at $2025.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone and U.K. Manufacturing PMI at 8.30 am, 9.00 am and 9.30 am respectively. This is followed by Euro-Zone CPI at 10.00 am and the Minutes from last Month’s ECB Meeting at 12.30 pm. Next, we have U.S. Weekly Jobless Claims and the Chicago Fed National Activity Index at 1.30 am. At 2.45 pm we have Manufacturing PMI. Finally, we have Existing Home Sales at 3.00 pm and the Kansas Fed Manufacturing Index at 4.00 pm. Meanwhile, Fed Members Jefferson and Harker are speaking at 3.00 pm and 8.15 pm respectively.
Cash S&P 500
The S&P never came close to yesterday’s buy range before rallying almost 80 Handles off its 4946-afternoon low print, trading at 5023 as I go to press. Much better earnings from Nvidia sees the S&P trading 40 Handles higher from its 9.00 pm Chicago cash close. Despite only a mild 2% fall in the S&P over the past week, some of the technical signals that I follow are oversold. I have never seen a scenario like this where ‘’Nothing Matters’’ as any sell-off is aggressively bought. The Chief Economist from Citibank is the latest major economist calling for a recession in America, starting in the mid-half of the year. With Unemployment Rates so low and billions of Dollars been injected into the U.S. economy in the form of QE, it is hard to see a recession play-out. The 14-Day RSI closed in no man’s land last night with a 58 print. As I have stated over the past few weeks, I have no interest in pressing the downside unless this key matric is north of 73. The S&P has support from 4972/4988. I will now raise my buy level to this area in the off chance that they fill Wednesday’s ‘’Open Gap’’ either today or tomorrow. If I am taken long, I will have a T/P level at 5004. I still do not want to be short the S&P at this time. If this view changes, I will be back with a new update for my Platinum Members.
EUR/USD
Yesterday was a non-event for currency volatility. I am still flat the Euro as I continue to be a buyer on any dip lower to 1.0700/1.0770 with the same 1.0635 ‘’Closing Stop’’.
Dollar Index
No Change. I am still flat the Dollar. I will continue to be a seller from 104.40/105.10 with the same 105.65 ‘’Closing Stop’’. I still do not want to be long the Dollar at this time.
Cash DAX
What happens when the head of the Bundesbank warns of an impending recession in Germany – new all-time highs for the DAX. I have said many times that ‘’nothing matters’’. The DAX never came close to yesterday’s buy range and I am still flat. I just cannot be a buyer of the DAX at these levels while the price action is telling you not to be short. I am going to stay flat the DAX until I return on Monday. If this view changes, I will be back with a new update for my Platinum Members.
Cash FTSE
The FTSE continues to find strong resistance from 7700/7750. This level was rejected again yesterday morning as the market move lower to my 7650-buy level. I am still long with a now lower 7685 T/P level. I will add to this position at 7580 while leaving my 7525 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
Frustratingly, the Dow missed my initial 38300 buy level by 37 points before rallying to sist at 38650 this morning. I will now raise my buy level to 38160/38410 with a higher 37995 ‘’Closing Stop’’. I still do not 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
My NDX plan worked well as the NDX traded lower to my aggressive 17350 buy level before rallying after hours to my 17610 T/P level on the much better than expected Nvidia earnings. As I go to press the NDX is trading higher at 17725 – a 400 point move of yesterday afternoon’s low print. Until some key trendlines like the 17300-pivot point are broken, I will continue to be a buyer of dips. Even though it is a difficult thing to do given the valuations. The NDX has support from 17420/17570 where I will again be a buyer with a higher 17295 ‘’Closing Stop’’. The NDX has resistance from 18010/18160 where I will be a small seller with a 18255 tight ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 17690. If I am taken short, I will have a T/P level at 17905.
March BUND
No Change. I am still long from last week at a price of 133.10. I will now lower my T/P level to 133.50. I will add to this position at 132.20 while leaving my 131.85 ‘’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
No Change. I am still flat Gold as the market again traded in a narrow range over the past 24 hours. I will continue to be a buyer on any dip lower to 1983/1998 with the same 1971 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2007.
Silver Rolling Contract
No Change. The boring price action shows no sign of ending unfortunately. I still believe in the bull case for this precious metal. I will continue to hold my 24.40 average long position with no stop or T/P level for now. This morning, Silver is trading slightly lower at a price of 22.96. I will continue to look to add to my existing long position on any further move lower to 21.50. If this view changes, I will be back with a new update for my Platinum Members.
Please Note: There will be no Daily Commentary tomorrow Friday. Any calls that are not hit today and are subsequently triggered tomorrow will see me return with updated emails for my Platinum Members.
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