U.S. Indices rallied on Monday on reports that US President Trump’s April 2nd tariffs may be more targeted, excluding sector-specific tariffs, while a strong S&P Global Services PMI also supported the risk tone. However, Trump did later state he will be announcing tariffs on autos, lumber and chips over the next few days, but he did add he may give a lot of countries breaks on tariffs, which helped add to the equity bid. Stocks closed around highs with all sectors in the green, with notable outperformance in Consumer Discretionary thanks to near 11% gains in Tesla (TSLA) and 3.6% gains in Amazon (AMZN). Communication Services also outperformed, while the defensive sectors underperformed, but mostly ended higher (utilities finished flat). T-notes were sold across the curve on the Trump-targeted tariff reports with encouraging risk sentiment also weighing. Reports in WaPo suggesting tax revenue this year will be 10% lower Y/Y also added to the pressure. There was also a slew of corporate issuance ahead of 2, 5 and 7 year supply this week, but T-note selling accelerated after the strong PMI data, which saw the composite rise thanks to a strong services print, although manufacturing PMI fell into contractionary territory. The Dollar Index saw gains thanks to higher yields but also the strong PMI data while the Japanese Yen was the clear laggard on yield differentials. Both the Australian Dollar and Canadian Dollar outperformed due to their cyclical nature with stocks rallying, with AUD/USD turning green on Trump’s possible country tariff break remark. Crude prices were bid due to the risk tone despite several bearish reports. Reports included Egypt putting forward a proposal to try to put the ceasefire between Israel and Hamas back on track; Indian refiners are set to issue fewer tenders for crude oil purchases on the spot market in the coming months due to increased Russian supply, via Reuters. It was also reported by Reuters that OPEC+ is set to proceed with plans for the next monthly oil output hike in May, according to sources. Nonetheless, oil prices were pushed higher, supported by Trump announcing secondary tariffs on Venezuela, where any country that purchases oil and gas from Venezuela will be forced to pay a tariff of 25% to the US on any trade they do. This is of concern for China, Spain, India, and Italy (via Reuters), where if there are no changes in trade policy, China could face tariffs of up to 45% (25% secondary tariffs on top of the 20% existing tariffs). US S&P Global Flash PMIs for March were mixed. Services topped expectations at 54.3 (exp. 50.8, prev. 51.0), while Manufacturing unexpectedly fell back beneath 50 to 49.8 (exp. 51.7, prev. 52.7). The surge in Services more than offset the manufacturing slump, allowing the Composite to rise to 53.5 from 51.6. Commenting on the data, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said a welcome upturn in service sector activity has helped propel stronger economic growth at the end of the first quarter. However, the survey data are indicative of the economy growing at an annualized 1.9% rate in March and just 1.5% over the quarter as a whole, pointing to a slowing of GDP growth compared to the end of 2024. In addition, he added that near-term risks also seem tilted to the downside, and business confidence in the outlook has also darkened, souring further from the buoyant mood seen at the start of the year. Williamson adds that a pivotal concern over tariffs is the impact on inflation, with the March survey indicating a further sharp rise in costs as suppliers pass tariff-related price hikes on to US companies. In an interview with Bloomberg, Fed Member Bostic maintained his hawk stance, announcing he was one of the dots who pencilled in just one rate cut for 2025, down from his prior estimate of two rate cuts. For reference, the Fed median FFR dot plot sees two cuts this year while money markets currently price 68bps of easing. On uncertainty, Bostic said there is a lot on the economy, and as such, “forecasting is more challenging than in the past”. The 2027 voter expects inflation to be very bumpy and he doesn’t see it returning to target until some time in 2027 (in line with the Fed median view). Bostic is comfortable keeping policy restrictive to get inflation to target and noted he focuses on the medium and long-term inflation expectations, as opposed to more volatile short-term expectations. Bostic stated he is hearing more concern about the path of the economy, but data has not shown that yet. Additionally, businesses think price pressures are moving higher, are bullish on sales, and wage pressures are not outsized. On the labour market, he said it’s still tight, but “not as tight as two years ago”. Regarding the QT pace slowdown on Treasury securities, he prefers to stay at this rate until they stop. Bostic said he would consider selling MBS but the Fed has not had any conversations about it. Elsewhere, Oil closed higher by 1.22% while Gold was heavy, closing lower by 0.7%.
To mark my 3150th 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 50 points yesterday and is now ahead by 2669 points for March after 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 1.76% higher at a price of 5767.
The Dow Jones Industrial Average closed 597 points higher for a 1.42% gain at a price of 42,583.
The NASDAQ 100 closed 2.16% higher at a price of 20,180.
The Stoxx Europe 600 Index closed 0.13% lower.
Yesterday, the MSCI Asia Pacific closed 0.6% higher.
Yesterday, the Nikkei closed 0.18% lower at a price of 37,608.
Currencies
The Bloomberg Dollar Spot Index closed 0.22% higher.
The Euro closed 0.1% lower at $1.0797.
The British Pound closed 0.1% lower at 1.297.
The Japanese Yen fell 0.9% closing at $150.65.
Bonds
Germany’s 10-year yield closed 2 basis points higher at 2.78%.
Britain’s 10-year yield closed 1 basis points higher at 4.73%.
U.S.10 Year Treasury closed 9 basis points higher at 4.35%.
Commodities
West Texas Intermediate crude closed 1.22% higher at $69.11 a barrel.
Gold closed 0.7% lower at $3010.10 an ounce.
This morning on the Economic Front we have German IFO Business Survey at 9.00 am. Next, we have U.K. CBI Distributive Trades Survey at 11.00 am, followed by U.S. Building Permits at 12.00 pm. At 1.00 pm we have the House Price Index and Composite PMI. This is followed by Consumer Confidence, New Home Sales and the Richmond Fed Manufacturing Index at 2.00 pm. Finally, we have a speech from Fed Member Williams at 1.05 pm and a Two-Year Treasury Auction at 5.00 pm.
Cash S&P 500
After last week’s brutal chop below the 200 Day Moving Average a sudden Sunday night future’s gap up and squeeze in overnight. Who’s they? Well, plenty of motivators and actors out there in light of quarter end approaching. Pension fund rebalancing for one which is not really happening until the end of the quarter, but word has it there will be lots of forced buying due to imbalances and positioning. Let us not forget asset managers are near their lowest long exposure for 2025 at the moment. History tells us that the S&P does not sit below its 200 MA for long and yesterday’s 100 Handle rally sees the S&P finally tag and close above this key MA at 5752 last night. With sentiment as weak as its is, bulls needed Monday’s rally to prevent a major trend break lower. The S&P is now trading over 260 Handles higher from the March 5507 low print. I am fully aware of the downside risks this year, despite it being the 5th year cycle. But the 5th year cycle also has to keep us on our toes for sizable upside risks despite all the potential negatives. Let us not forget the awesome potential firepower of central banks globally and the impact on global liquidity. They are all back in the cycle of easing albeit being slowly at the moment, but the firepower is there and it is incredible. Meanwhile, President Trump is using every opportunity to bang on the Fed to lower rates just like he did during his first term in office. Despite Monday’s rally the $NYSI Stochastic is still extremely oversold. Today, I will raise my S&P buy level to 5708/5728 with a higher 5689 ‘’Closing Stop’’. 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
I am still flat as the Euro continues to correct some of its March surge higher. The Euro has support below from 1.0670/1.0750 where I will be a small buyer with the same 1.0595 wider ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 1.0820.
Dollar Index
Unfortunately, the Dollar just missed Monday’s buy range by a few points before rallying 45 points into the close and I am still flat. I will now raise my buy level to 103.15/103.95 with a higher 102.60 ‘’Closing Stop’’.
Russell 2000
My latest 2040 long Russell position worked well as the Russell led Monday’s move higher, hitting my 2090 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 2000/2070 with the same 1935 ‘Closing Stop’’. If I am taken long, I will have a T/P level at 2120.
Cash FTSE
Both the FTSE and DAX traded heavy yesterday. I am still flat the FTSE market as I continue to look to buy the market on any dip lower 8500/8570 with the same 8435 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 8635. Despite the higher Gilt Yields I still do not want to be short the FTSE at this time.
Dow Rolling Contract
Friday’s late 500-point rally into the New York close continued yesterday as the Dow tagged on a further 600 points, wiping anyone short last week. This move higher has the Dow comfortably above its 200-Dasy Moving Average (42061) and this will attract strong buying on any dip. Today, I will raise my Dow buy level to 42000/42250 with a higher 41795 ‘’Closing Stop’’. Despite the Dow been short-term overbought I have no interest in selling this market.
Cash NASDAQ 100
The NDX surged on Monday, leaving a massive 250-point ‘’Open Gap’’ to last Friday’s 19763 ‘’Chicago Close. This move higher saw the 20-Day Moving Average at 20127 re-captured with the next target the 200-Day Moving Average which comes in just above Monday’s close at a price of 20300. Given the fact that both the Dow and S&P are now comfortably above their respective 200 MA’s it seems to be a matter of time before the NDX follows suit. It is so hard to be short the American Indexes for any length of time as the appetite to buy dips is insane. This move higher I flagged in yesterday’s commentary given the positivity of the McClellan Oscillator. The NDX has support from 19900/20050. I will now raise my buy level to this area with a higher 19795 tight ‘’Closing Stop’’.
December BUND
The Bund continues to trade sideways despite the continued pressure on both the U.K. Gilt and U.S. Treasury Markets. I am still flat. Today, I will continue to be a buyer on any dip lower to 127.40/128.20 with the same 126.75 ‘’Closing Stop’’. If triggered, I will have a T/P level at 128.90. I still do not want to be short the Bund at this time. If this view changes, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold again traded in a narrow range without ever threatening Monday’s sell range. Today, I will continue to be a seller on any further rally to 3070/3088 with the same 3111 ‘’Closing Stop’’. I still do not want to be long Gold at this time. If I am taken short, I will have a T/P level at 3053.
Silver Rolling Contract
Silver traded in a narrow range yesterday. I am still long from last week at 33.10 with the same 33.65 T/P level. I will add to this position on any further move lower to 32.30 while leaving my 30.95 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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