U.S. Equity Markets staged a late come back to start the first trading session of May in positive territory, led by the 1.72% gain in the NASDAQ 100. Yesterday reversed some of the negativity from Friday when the NDX lost 4.17%, ensuring that Technology had its worst month since 2008, following the release of the U.S. Federal Reserve’s preferred inflation gauge, the Bureau of Economic Analysis’ Personal Consumption Expenditures (“PCE”), showing inflation grew in March. While the figure was lower than Wall Street’s expected increase of 6.7%, it was still 6.6% higher on a year-over-year basis. The number was also above March’s downwardly revised rise of 6.3%. Meanwhile, the core reading jumped by 5.2% versus last year, lower than the forecasts and February’s increase of 5.3%. And on a month-over-month basis, the number increased by 0.9%, which was in line with estimates. This suggests that if we see inflation further pick up over the course of 2022, the economic situation may worsen. In this instance, it would signal to the central bank that more aggressive policy is needed to raise interest rates. Yesterday, we saw plenty of chop in the American Indexes. The Chicago Board Options Exchange’s (“CBOE”) volatility index (“VIX”) currently has a reading of around 32 compared with the historical average of 19.76. The high reading suggests that investors are becoming increasingly concerned about the S&P 500 Index’s future return potential, weighing on the stock market. Fuelling this uncertainty is the Federal Reserve’s upcoming policy meeting tomorrow, as Wall Street forecasts the central bank will raise the Federal-Funds target by 0.5% to 0.75%, marking its highest level since the onset of COVID-19. As a result, money managers are selling growth stocks before a potential decline to capitalise on lower prices during a downturn. Within the S&P 500, six of the 11 sectors finished higher. European Markets that were open, closed lower. Russian Foreign Ministry spokesperson Georgiy Zinoviev said he anticipates overall trade with China to increase to $200 billion by the end of 2024, fuelled by a rise in commodity exports. The Bank of England will announce its latest monetary policy update this week, and investors expect the central bank will raise interest rates by 0.25%. France’s National Institute of Statistics and Economic Studies data showed consumer spending in Europe’s second-largest economy fell in March due to increased inflation. German Foreign Minister Annalena Baerbock said Russian sanctions would be lifted only after its military has completely withdrawn from Ukraine. In Asia, China’s official composite purchasing managers’ index (“PMI”) data for April moved deeper into contraction territory, hitting its lowest level since February 2020 as COVID-19 lockdowns continue. Shanghai, China’s financial hub and home to the world’s largest container port, reported less than 10,000 COVID-19 infections for the second-straight day, signalling cases may be easing. Jibun Bank’s final Japanese manufacturing PMI figures for April increased compared with the preliminary reading due to a second-straight month of output expansion. South Korea’s export growth for April was weaker than expected, slowing versus March as shipments to Europe contracted compared with the year prior. Elsewhere, Oil rose 0.8% on news that the European Union (“EU”) will ban Russian oil, while Gold fell 1.90% on Dollar strength.

To mark my 2525th 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 lost 210 points on Friday, to end April ahead by 762 points after closing March with a gain of 5883 points. The Platinum Service made an impressive 5324 points gain in February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss, having made 2466 points in November, 1028 points in October, 2866 points in September, 1543 points in August, and 996 points in July. The Platinum Service made 1366 points in June, 1439 points in May, 1244 points in April, after ending March with an impressive gain of 3769 points. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 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 0.57% higher at a price of 4155.

The Dow Jones Industrial Average closed 84 points higher for a 0.26% gain at a price of 33,061.

The NASDAQ 100 closed 1.72% higher at a price of 13,075.

The Stoxx Europe 600 Index closed 0.6% higher.

Yesterday, the MSCI Asia Pacific Index rose 0.2%.

Yesterday, the Nikkei closed 0.11% lower at a price of 26,818.

Currencies 

The Bloomberg Dollar Spot Index closed 0.1% higher.

The Euro closed 0.1% lower at $1.0495.

The British Pound closed 0.2% higher at 1.2491.

The Japanese Yen rose 0.6%, closing at $130.17.

Bonds

Germany’s 10-year yield closed eight basis points higher at 0.97%.

Britain’s 10-year yield closed six basis points higher at 1.90%.

US 10 Year Treasury closed 14 basis points higher at 2.98%.

Commodities

West Texas Intermediate crude closed 0.8% higher at $105.04 a barrel.

Gold closed 1.90% lower at $1863.10 an ounce.

This morning on the Economic Front we have German Unemployment at 8.55 am, followed by Euro-Zone PPI at 10.00 am. ECB President is speaking at 2.00 pm. Finally, we have the U.S. JOLTS Job Openings at 3.00 pm.

Cash S&P 500

April saw stocks having their worst month in recent memory, led by the NASDAQ which ended April with a loss of 13.2%, registering its worst month since 2008. This move lower in the NDX saw the S&P end April in the red by 8.8%, which was its weakest month in over two years. Rising Bond Yields continued to weigh on Tech Stocks with the 10-Year Yield rising the most in more than a decade, hitting a high above 3% yesterday. This is a key week for the S&P as we have the FOMC Meeting tomorrow and the Jobs Report on Friday while at the same time we will have lots of earnings reports. We are in a fully- fledged Bear Market despite the S&P not dropping by 20% as the likes of the NDX and Russell Index have exceeded losses of over 20% since their respective highs on November 9 last year. On top of this so many stocks have been utterly destroyed over the past six months while fear is back with a vengeance with the ‘Fear & Greed Index’’ closing at 25 last night. Of course, none of this tells us the lows are in but the 100 Handle rally in the S&P in the last hour of trading last night tells me that we have at least seen a temporary bottom that could well turn into a vicious rally especially if Powell can calm markets in his press conference following the FOMC Statement tomorrow evening. The Fed do not want a crash on their watch and have history in this regard as the last time Bond Yields hit 3.2% in December 2018 they flipped and did more QE signalling the massive rally into the February 2020 high. It is interesting that it was announced over the weekend that Warren Buffet bought $51bn (net buying) of stocks in Q1, which is his most aggressive buying since the Global Financial Crisis. I am seeing plenty of positive divergence as shown by the VIX which fell 4% yesterday, closing at a price of 32. When has the Fed ever raised rates and announced a roll-off its balance sheet with the VIX north of 30? The answer is never. I am long the S&P at an average rate of 4263 with the same no stop and a T/P level at 4293. For those members who want to take more risk, I would be a buyer on any further dip lower to 4080/4110 with a 4039 wider stop. If I am taken long I will have a T/P level at 4170.

EUR/USD

The Euro traded higher on Friday to my 1.0590 T/P level on my latest 1.0540 long position and I am still flat. Today, I will again be a buyer on any dip lower to 1.0420/1.0480 with a 1.0345 stop. If I am taken long I will have a T/P level at 1.0540

March Dollar Index

On Friday the Dollar rallied to my 103.55 T/P level and I am still flat. The Dollar has resistance from 103.80/104.40 where I will again be a seller with a 105.05 stop.

Cash DAX

Despite both the S&P and NDX making new lows the DAX has traded well over the past few weeks, trading 1400 points higher than the March low of 12500. The DAX has support from 13700/13780 where I will be a small buyer with a 13595 stop.

Cash FTSE

Yesterday, the FTSE traded the whole of my buy range for a ow 7430 average long position. I will now lower my T/P level to 7485 while leaving my 7345 stop unchanged.

Dow Rolling Contract

The Dow has seen incredible volatility since Friday’s Daily Commentary with plenty of two-way price action. I bought the Dow at 33530 before getting stopped out of this position near the close on Friday at 33295 and I am still flat. The Dow has strong support from 32600/32800 where I will again be a buyer with a wider 32295 stop which is just below yesterday’s low print. If I am taken long I will have a T/P level at 33080. Given how oversold the market is trading I no longer want to be short at this time.

Cash NASDAQ 100

The NDX traded the whole of my next buy level for a now 13000 average long position. I am still long with a lower 13205 T/P level. I continue to nurse last month’s 14327 long position which I have now carried into May.

June BUND

The Bund hit my second buy level at 153.60 for a now 153.90 average long position. I will lower my T/P level to 154.30 while having no stop on this position for now. If any of the above levels are hit I will be back with a new update for my Platinum Members.

Gold Rolling Contract

Gold has tanked over the past few days, trading the whole of my buy range for a now 1867 long position. I will leave my 1849 stop unchanged while lowering my T/P level to 1877.

Silver Rolling Contract

My Silver plan did not work well as I was stopped out of my 23.20 long position at 22.45 and I am still flat. Silver is close to its 2022 lows and is due a bounce. Today, I will be a buyer from 21.70/22.30 with a 20.95 stop.