U.S. Indices closed with slight gains on Tuesday as they saw a slight bid into settlement but were still relatively rangebound in a day which was dominated by US and Russia high-level delegates holding a meeting in Riyadh regarding Ukraine. Following the gathering, Russia delegates gave positive remarks, highlighted by Russian Foreign Minister stating that talks were “not unsuccessful.” In wake of the readout, Ukrainian President Zelensky said his visit to Saudi Arabia has been postponed until March 10th, with sources adding that it was in order to not give legitimacy to US-Russia meeting. Overall, the Dollar was bid to the detriment of G10 FX peers with the New Zealand Dollar lagging ahead of RBNZ overnight, while the Australian Dollar pared its initial strength post-RBA. T-Notes were sold across the curve amid plethora of corporate supply ahead of this evening’s 20 Year Treasury Auction, while the crude complex was firmer, with WTI notching up greater gains than Brent on account of no settlement on Monday due to US Presidents’ Day holiday. Elsewhere, Fed Governor Waller called for rates to be on hold, while 2027 voter Daly wants more inflation progress. On the data footing, the New York Fed Manufacturing Survey returned to expansionary territory. For the record, sectors were predominantly in the green with Energy and Materials sitting at the top of the pile, while Communication Services was the clear laggard and likely weighed on by Meta’s (META) (-3%) 20-day win streak coming to an end. Stock specific highlights include Conagra Brands lowering guidance, and Intel soared amid a couple of bullish headlines, namely Broadcom (AVGO) and TSMC (TSM) reportedly considering separate deals that could split Intel (INTC), and also Silver Lake reportedly near a deal for stake in INTC’s Altera. Fed Governor Waller stated that while disinflation is expected to resume this year, the recent CPI reading was disappointing, though he suggested it may have been influenced by seasonal adjustment issues. He emphasised that seasonal effects could be distorting data, citing January retail sales as an example, which he downplayed due to the impact of cold weather. Waller maintained that rate cuts are still expected in 2025 but that it remains appropriate to keep rates on hold for now, stressing that the Fed cannot let policy uncertainty paralyse action and must remain data-driven (in January Waller refused to rule out a March cut). On inflation, Waller noted that progress has been excruciatingly slow, with the persistence of housing services inflation proving surprising. He reiterated that tariffs are expected to have a modest and non-persistent impact on prices, which the Fed should try to look through when setting policy. He also observed that market-based inflation expectations, such as TIPS, do not indicate a rise in long-term inflation risks. Waller also highlighted growing concerns among market participants over the US deficit, which he said is leading to participants demanding a term premium on 10-year yields. On the labour market, he described conditions as strong with solid growth continuing into the first quarter of 2025 but noted that most of the risks remain skewed toward higher unemployment. Lastly, he acknowledged uncertainty over whether the “last mile” of disinflation is particularly difficult or simply a result of seasonal inflation distortions. Meanwhile, the Fed’s Daly who is not a voter until 2027 stated that the US economy remains in a good place, with solid GDP growth and a resilient labour market. While inflation is gradually coming down, the process has been bumpy and is taking longer than desired. However, she sees no reason to be discouraged about progress. Daly emphasised that policy remains restrictive and should stay that way until there is clear and sustained progress on inflation. She stressed the importance of being careful before making the next adjustment to ensure enough pressure remains on inflation while also avoiding actions that could “shortchange” the labour market. She reiterated that the Fed does not need to rush decisions and wants to gather more information before making any moves to avoid policy missteps. On risks, Daly acknowledged uncertainty regarding the scope, magnitude, and timing of new administration policies. She also noted that the California wildfires could impact insurance markets and potentially have longer-term economic consequences. Despite these uncertainties, she maintained that policy is in a very good place and that the Fed remains well-positioned to act when needed. Elsewhere, Oil closed higher by 1.5% while Gold ended Tuesday’s session with a 1.2% gain.
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 90 points yesterday and is now ahead by 2560 points for February. 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 0.24% higher at a price of 6129.
The Dow Jones Industrial Average closed 10 points higher for a 0.02% gain at a price of 44,556.
The NASDAQ 100 closed 0.23% higher at a price of 22,164.
The Stoxx Europe 600 Index closed 0.32% higher.
Yesterday, the MSCI Asia Pacific closed 0.4% higher.
Yesterday, the Nikkei closed 0.25% higher at a price of 39,270.
Currencies
The Bloomberg Dollar Spot Index closed 0.47% higher.
The Euro closed 0.35% lower at $1.0444.
The British Pound closed 0.18% higher at 1.2600.
The Japanese Yen fell 0.32% closing at $152.01.
Bonds
Germany’s 10-year yield closed 2 basis points higher at 2.51%.
Britain’s 10-year yield closed 1 basis points higher at 4.55%.
U.S.10 Year Treasury closed 7 basis points higher at 4.55%.
Commodities
West Texas Intermediate crude closed 1.54% higher at $71.83 a barrel.
Gold closed 1.2% higher at $2934.10 an ounce.
This morning on the Economic Front we have U.K. CPI and PPI at 7.00 am. Next, we have Euro-Zone Current Account at 9.00 am followed by U.S. MBA Mortgage Applications at 12.00 pm. At 1.30 pm we have Building Permits and Housing Starts. Finally, we have a 20 Year Treasury Auction at 6.00 pm and the latest FOMC Minutes at 7.00 pm.
Cash S&P 500
The S&P hit a high on Tuesday morning at 6139 before falling 40 handles. The usual buying turned up in the last hour of trading, helping the market to close at a price of 6129 at Chicago’s close. Every day I see another stat showing how overbought the S&P is yet ‘’Nothing Matters’’. Goldman Sach’s Bull/Bear Market Indicator is now at 73% which is a level associated with major downside risk. Still, every dip is relentlessly bought despite all the valuation and fundamental concerns. The simple answer may be a combination of ever easing financial conditions. On top of this we have the prospect of massive tax cuts to come which of course will have to paid for by more debt. I see danger everywhere as these vertical rips higher are similar to 2021/2022 and of course 2000 which both led to aggressive moves lower. I do not like anything here on the long side in terms of U.S. Indexes or stocks especially in context of seasonality. The S&P has major resistance ahead and I will continue with my strategy of selling rips. The S&P has resistance from 6146/6164. I will now move my sell level to this range with a now higher and wider 6181 ‘’Closing Stop’’. Given the number of extremities that I wrote about in Monday’s Commentary, I have no interest in buying the S&P at this time. If this view changes, I will be back with a new update for my Platinum Members. If I am taken short, I will have a T/P level at 6130.
EUR/USD
The Euro never came close to yesterday’s buy range/sell range, and I am still flat. The Euro has support below from 1.0310/1.0380. I will now raise my buy level to this area with a higher 1.0235 ‘’Closing Stop’’. I no longer want to be short the Euro at this time.
Dollar Index
The Dollar rallied 0.5% yesterday. I am still long from last week at an average price of 107.00. I will now lower my T/P level to 107.30 while leaving my 106.15 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
The Russell traded in a narrow 20-point range yesterday, and I am still flat. This morning, the Russell is trading slightly lower at a price of 2281. We have short-term support below from 2170/2230 where I will continue to be a buyer with the same 2115 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2275.
Cash FTSE
I am still short the FTSE from late Monday at a price of 8780. Since the December lows the FTSE has ramped higher leaving one unfilled gap after another below. As you know all ‘’Open Gaps’’ eventually are filled. I will leave my T/P level unchanged at 8740. I will continue to look to add to this position on any further move higher to 8860 while leaving my 8925 ‘’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 Tuesday’s buy range by 14 points before rallying over 240 points into the close. I am still flat. Ahead of this evening’s key FOMC Minutes, I will now lower my buy range to 43950/44200 with a lower 43795 ‘’Closing Stop’’. Despite the Dow underperforming the other main Indexes, I still do not want to be short the market at this time. If I am taken long, I will have a T/P level at 44360.
Cash NASDAQ 100
My latest 22130 short NDX position worked well as the market sold off to my 22040 T/P level and I am now flat. This morning, the NDX is trading higher at 22200 as I go to press. The NDX has resistance from 22260/22420 where I will again be a seller with a higher 22555 ‘’Closing Stop’’. I still do not want to be long the NDX at this time. If I am taken short, I will have a T/P level at 22130.
December BUND
I am still flat the Bund. I will continue to be a buyer on an dip lower to 130.60/131.30 with the same 129.95 ‘’Closing Stop’’. If triggered, I will have a T/P level at 131.85.
Gold Rolling Contract
Gold surged yesterday reversing all of Friday’s $60 move lower. This move higher saw my sell range triggered for a now 2932 short position. I will add to this position on any move higher to 2950 with a now higher 2965 ‘’Closing Stop’’. I will raise my T/P level to 2919. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
Silver closed 1.5% higher yesterday and I am still flat as the market never came close to Tuesday’s buy range. I will now raise my buy level to 31.30/32.20 with a higher 29.95 ‘’Closing Stop’’.
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