U.S. Equity Markets ended Tuesday with gains, in what was a choppy day across markets, as sentiment swung between the European and U.S. sessions. In the European morning, there was a notable risk-off trade amid heightened geopolitical tensions as Russia’s Kremlin said “Russia reserves the right to use nuclear weapons in an event of aggression”, as well as Ukraine making its first ATACMS strike inside Russia. Following this, Treasuries, Dollar, and Gold caught a bid with haven FX (JPY, CHF) outperforming, while stocks and oil sold off as did other global FX peers vs. the Dollar. Once extremes were hit, highlighting by USD/JPY hitting a low of 153.29, sentiment reversed through the US session, albeit on no particular headline in pretty light newsflow. Illustrating the volatility of the moves, the Dollar is flat as is the Yen against the Dollar, while high beta FX outperforms, and Treasuries only end the session marginally firmer, while stocks and oil also are green. Elsewhere in the day, the Canadian Dollar saw notable strength after Canadian inflation data came in hotter than expected which saw hawkish Bank of Canada repricing. Out of the US, housing data came in beneath consensus while Fed’s Schmid (2025 voter) said little new. For the record, sectors were mixed with Technology and Communication Services sitting atop of the pile with the former buoyed by strength in Nvidia (NVDA) (+4.9%) ahead of earnings this evening. In terms of stock-specific highlights, Super Micro Computer (SMCI) surged 31% after the Co. appointed BDO as its new auditor, aiming to resolve filing delays, while Walmart reported beats on key metrics for the quarter, accompanied by strong guidance, leaving WMT 3% higher into the close. Privately-owned US Housing Starts fell by 3.1% in October from prior 1.353 million to 1.311 million, beneath the 1.33 million forecast. Single-family housing starts in October fell 6.9% to 970,000. Meanwhile, multi-family starts were 326k. Privately owned building permits declined by 0.6% from 1.425 million to 1.416 million, beneath the 1.43 million forecast. Single family permits rose 0.5% to 968k, while multi-family permits were 393k. Oxford Economics highlight that starts were a touch weaker due to the impact of Hurricanes but they expect starts in the South to rebound as rebuilding in the areas most impacted by the storm gets underway. Looking ahead, Oxford Economics “expect a gradual improvement in starts throughout the year but see downside risks to our forecast from sticky mortgage rates, as well as labour shortages and higher building costs if we take President-elect Trump’s policies on immigration and tariffs at face value”. Last Thursday’s US PPI data was a touch hotter than expected on the Y/Y prints with upward revisions on the prior report. Headline M/M rose by 0.2%, in line with expectations while the prior was revised up to 0.1% from 0.0%. The Y/Y headline rose by 2.4%, above the 2.3% forecast, with the September data being revised up to 1.9% from 1.8%. The Core numbers rose by 0.3%, in line with forecast but up from the prior 0.2%, while the Y/Y rose by 3.1%, above the 3.0% forecast and up from the prior 2.9%, which was revised up from 2.8%. The super core metrics, ex food, energy and trade, rose 0.3% M/M, up from the 0.1% prior, with the Y/Y rising 3.5%, up from the prior 3.3%, which was revised up from 3.2%. The focus of this report will be how the PPI and CPI translate into the PCE report. UBS acknowledged that some of the PCE components within the PPI report are hot. Pantheon Macroeconomics highlight that PPI portfolio management prices rose by 3.5%, while domestic air transportation prices rose by 8.8%, both larger than anticipated. Therefore, Pantheon Macroeconomics are revising their forecast for the increase in core PCE to 0.30% from 0.26%. Money markets are still pricing in an 80% probability of a 25bps rate cut in December, albeit it is down marginally from the 85% in the prior session. Elsewhere, Oil closed 0.49% higher while a weaker Dollar saw Gold rise 1.1%.
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For anyone following my Platinum Service it made 616 points yesterday and is now ahead by 2066 points for November having finished October with a gain of 2179 points. September saw a gain of 4402 points following a 301-point loss for August after closing July with a gain of 1918 points while June closed with a gain of 2074 points, having made 1843 points in May. The Platinum Service made 4010 points in April after ending March with a gain of 2113 points. February closed with a gain of 1606 points, 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 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
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