Tuesday was a risk-on-session on US election day with equities rallying with outperformance seen in the Russell 2000 while all sectors closed in the green. Consumer Discretionary alongside Industrials and Utilities led gains on the day, with Tech and Communications also seeing notable gains, while Materials, Energy and Staples were the relative underperformers. T-notes sold off throughout the European session with lows seen in the wake of the stronger-than-expected ISM Services PMI, however a solid 10-year note auction, as well as further unwinds of Trump trades, took T-notes higher to settle marginally higher with the curve flattening. The Dollar was sold throughout the session, more as a function of pre-election positioning after the Dollar’s recent rally, while cyclical currencies, AUD, GBP and CAD outperformed, but EUR, JPY and NZD also saw decent strength, whereas the CHF only saw marginal gains after its outperformance on Monday. Crude prices were very choppy, grinding higher on geopolitical tensions with punchy rhetoric between Israel and Iran about response attacks, while Israeli PM Netanyahu announced he fired Defence Minister Gallant, reportedly over three reasons, including his support for a Gaza hostage and ceasefire deal. All eyes are on the US election results due after hours. Overall, the ISM Services PMI data was strong with the headline unexpectedly rising to 56.0 from 54.9, despite expectations for a decline to 53.8, matching the highest analyst forecast. Within the report, the upside was supported by a return to expansionary territory in the employment component which rose to 53.0 from 48.1, the highest level since August 2023. However, comments from respondents included they are “Hiring seasonal labour for holiday peak activity” and “We have lost employees due to normal attrition and are having issues backfilling these positions”. There was a slight increase in the Prices Paid component too, rising to 58.1 from 59.4, but shows that prices are still expanding yet accelerating marginally. It is worth noting the ISM Manufacturing PMI saw a notable increase in the Prices Paid component, back to expansionary territory, but the magnitude of the price increases was not observed in the Services PMI. The strong headline beat was also supported by an increase in the supplier delivery times, which saw a notable increase to 56.4 from 52.1, representing slower delivery times, but not due to increased demand, but due to implications of the hurricanes. Elsewhere, New Orders eased to 57.4 from 59.4, while business activity eased to 57.2 from 59.9. Overall, analysts at Oxford Economics note that “The level of the index is consistent with our view that consumer spending, including on services, will continue at a brisk pace in Q4 and in 2025”. The Fed is widely expected to cut rates by 25bps on Thursday, taking the target for the FFR to 4.50-4.75%, in line with money market pricing and analyst forecasts. Attention will be on any updates on the statement to see how the Fed describes the economy after mixed recent data, and of course for any future guidance – but they will likely keep options open. The rate decision takes place two days after election day, and it is possible results still may not be known by then given how close the race is. Nonetheless, the election is not expected to have much impact on the upcoming meeting, but it will shape expectations for easing through 2025. A Trump victory is seen as inflationary versus a Harris victory due to Trump’s proposals of increased spending, tax cuts and the imposition of tariffs, which could see a slower return to the neutral rate if Trump is elected. However, the composition of Congress will also be of note. Chair Powell is likely to keep his options open by maintaining a meeting-by-meeting approach with decisions to be directed by economic data. This will likely entail language that the Fed can either slow, accelerate or even pause the easing process depending on how the economy evolves, but a more explicit signal to one of these options would be key. Elsewhere, Oil closed 0.7% higher while Gold was again flat following a second consecutive quiet trading session. As I go to press it looks more and more likely that Trump will be the next President. Both the Dollar and stocks are surging as I go to press.
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For anyone following my Platinum Service it was flat yesterday and is still ahead by 966 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
Equities
The S&P 500 closed 1.23% higher at a price of 5782.
The Dow Jones Industrial Average closed 427 points higher for a 1.02%gain at a price of 42,221.
The NASDAQ 100 closed 1.32% higher at a price of 20,227.
The Stoxx Europe 600 Index closed 0.04% higher.
Yesterday, the MSCI Asia Pacific closed 0.6% higher.
Yesterday, the Nikkei closed 1.11% higher at a price of 38,474.
Currencies
The Bloomberg Dollar Spot Index closed 0.45% lower.
The Euro closed 0.4% higher at $1.0928.
The British Pound closed 0.5% higher at 1.3040.
The Japanese Yen rose 0.3% closing at $151.60.
Bonds
Germany’s 10-year yield closed 4 basis points higher 2.43%.
Britain’s 10-year yield closed 7 basis points higher at 4.53%.
U.S.10 Year Treasury closed 2 basis points lower at 4.28%.
Commodities
West Texas Intermediate crude closed 0.7% higher at $71.97 a barrel.
Gold closed 0.2% higher at $2743 an ounce.
This morning on the Economic Front we have German Factory Orders at 7.00 am. Next, we have German, Euro-Zone and U.K. Construction PMI at 8.55 am, 9.00 am and 9.30 am respectively. This is followed by Euro-Zone PPI at 10.00 am and U.S. MBA Mortgage Applications at 12.00 pm. Finally, we have a 30-Year Treasury Auction at 6.00 pm. Meanwhile ECB President Lagarde is speaking at 2.00 pm and ECB Member De Guindos at 2.30 pm
Cash S&P 500
The S&P just rallied from the off early yesterday morning which come as no surprise given how oversold the $NYSI and the $BPSPX were. I was hoping for some nervousness ahead of the close of polls, but this did not materialise, and I am still flat. At least we were not short and while we can get every move, I would have been long the S&P in normal circumstances given how oversold these two signals were. Today’s commentary may well be outdated when you wake up in the morning depending on the results. However, any sell-off should be met by more buying ahead of Fed Chair Powell and the FOMC Statement tomorrow evening. The world and his mother are now looking for higher prices with the 6100-target level only a matter of time according to all the main analysts. Consumers have never been more confident in stocks. However, at 3XSales, a 22 forward multiple, 200% Market Cap to GDP while at the same time Warren Buffet has his largest cash position ever, it is very hard to justify being long stocks at these prices. If the S&P does decide to surge from here, I will certainly be looking to sell any rips over the next few days as this market is expensive as hell. I cannot believe that a 3% fall in the main Indexes led to a -180 reading in the McClellan Oscillator and a maximum oversold reading for the $NYSI. I will now raise my S&P buy level to 5700/5720 with a higher 5679 wider ‘’Closing Stop’’. Despite my concerns how overvalued this market is, I still do not want to be short the S&P. If this view changes, I will be back with a new update for my Platinum Members. Given the expected volatility if you see a nice gain on any long position executed, please do not wait for my update to exit. The S&P is trading at a price of 5866 as I go to press. We have resistance from 5895/5915 where I will be a small seller with a 5931 ”Closing Stop”.
EUR/USD
The Euro built value on yesterday’s gains, closing Tuesday with a gain of 0.4%. As I go to press it is still unclear who has won making calling todays’ trading session difficult. There is no need to take undue risks as I prefer to see how the market reacts ahead of the FOMC Statement tomorrow. Just as I go to press the Euro has traded lower to my 1.0760 buy level. I am still long with a now lower 1.0830 T/P level. I will add to this position on any further move lower to 1.0690 with a now lower 1.0625 ”Closing Stop”.
Dollar Index
The Dollar is trading higher by 1.35% as I go to press from where we closed in New York last night. This move higher sees yesterday’s sell range hit for a now 104.75 short position. I will add to this position on any further move higher to 105.45 with a now higher 106.15 ”Closing Stop”. I will now raise my T/P level to 104.20. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
No Change: I am still flat the market as the DAX never came close to Monday’s sell range. Given the fact the DAX only trades from 7.00 am to 9.00 pm I am going to stay flat for the next two trading sessions until we get the election noise out of the way. We have had a nice start to November so there is no need to take undue risk. If this view changes, I will be back with a new update for my Platinum Members.
Cash FTSE
I am still flat the FTSE Market. The FTSE continues to trade heavy ignoring yesterday’s strong gain in the American Indexes. The FTSE has support from 8040/8110 where I will continue to be a buyer with the same 7965 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 8170.
Dow Rolling Contract
The Dow never came close to yesterday’s buy range, rallying as soon as I posted early yesterday morning which was no surprise given the number of oversold technical signals. I have no edge here as we wait for the results of the key ‘’seven swing states’’ and I am still flat. I have zero interest in been short the market as my technical signals are still oversold despite yesterday’s strong rally. I will now raise my Dow buy level to 41450/41750 with a higher 41295 tight ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 41960. The Dow is trading at a price of 42850 as I go to press. We have short-term resistance from 43100/43350 where I will be a small seller with a 43525 ”Closing Stop”. If I am taken short, I will have a T/P level at 42880.
Cash NASDAQ 100
I am still flat the NDX as the market never came close to Tuesday’s buy range. Ahead of any post-Election nervousness my only interest in buying the NDX is on a further dip lower to 19680/19830 with the same wider 19495 ‘’Closing Stop’’. If triggered, I will have a T/P level at 19960. I still do not want to be short the NDX at this time.
December BUND
No Change: The Bund traded in a narrow range over the past 24 hours. I am still long at an average rate of 132.10 with a now higher 132.70 T/P level. I will leave my 130.95 ‘’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
I am still flat as Gold traded in a narrow range yesterday. I have no interest in chasing the price of Gold higher preferring to wait for a decent correction before buying. Gold has strong support from 2610/2630 where I will be an aggressive buyer on any large dip to my buy area. If I am taken long, I will have a T/P level at 2672.
Silver Rolling Contract
No Change: Silver followed Gold lower on Thursday, hitting my 32.80 buy level. Compared to the May 2011 highs, Gold is higher by 44% while Silver is still trading 30% lower from where we were over 13 years ago. It makes all the sense in the world for me to keep buying Silver on Dips. I still have a large portion of Silver in my pension from the sub $20 mark. There is no doubt it would have had a higher return if it was in Gold. I will add to this position on any further move lower to 31.80 while leaving my 30.95 ‘’Closing Stop’’ unchanged. I will now lower my T/P level to 33.50. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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