U.S Equity Markets got hit hard yesterday after Fed Chairman Jerome Powell told the Senate Banking Committee that the central bank is prepared to re-accelerate the pace of interest rate hikes to further slow inflation growth. Powell also pointed out that stronger economic data could suggest that the peak rate would likely be higher than initially expected. The Dow led the decline, closing lower by 1.72%, while the VIX ended the day with a gain of 5.50%. Following Powell’s testimony, expectations for a 50-basis-point rate hike at the March meeting rose. The Manheim Used Vehicle Value Index for February showed prices rose 4.3% from January, the highest monthly increase since 2009. However, prices remain 7% down from levels seen a year ago. Within the S&P 500 Index, all the 11 sectors finished lower. European Markets closed lower. The ECB said three-year inflation expectations dropped from 3% to 2.5% – a sign that prices are becoming anchored and diminishing the need for continued rate increases while German Factory Orders for January weakened compared with December’s numbers, indicating the pace of economic growth is holding. ECB officials are becoming increasingly divided on the direction of monetary policy ahead of next week’s meeting. The Bank of England’s Catherine Mann reiterated her inflation worries and indicated that more work will need to be done as pricing pressures from firms could keep inflation elevated. In Asia, The Reserve Bank of Australia raised its cash rate by another 25 basis points to 3.6% as Governor Philip Lowe suggested it could be close to done with interest rate increases. Japan’s Wage Growth for January was weaker than anticipated, easing pressure on the central bank to raise interest rates. Chinese President Xi Jinping called on private-sector companies to play a greater role in domestic innovation and technology development to boost economic growth. Newly appointed Chinese Foreign Minister Qin Gang said the country will increase its diplomatic efforts in an attempt to strengthen relationships and improve trade. Elsewhere, Oil fell 3.83% while Gold fell 1.90% after the Dollar rose 1%.
To mark my 2725th 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 100 points yesterday and is now ahead by 1022 points for March after finishing February with a gain of 3164 points, after closing January with a gain of 4687 points, while finishing December with a gain of 2054 points. November ended with a gain of 4789 points, while finishing October with a record gain of 9619 points, making 6660 points in September, after closing August with a gain of 2228 points, having made 2660 points in July, following a gain of 3371 points in June. The Service made 3651 points in May, after making 762 points in April, following a gain of 5883 points in March. The Platinum Service made an impressive 5324 points in February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss. 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 1.53% lower at a price of 3987
The Dow Jones Industrial Average closed 574 points lower for a 1.72% loss at a price of 32,856.
The NASDAQ 100 closed 1.22% higher at a price of 12,152.
The Stoxx Europe 600 Index closed 0.79% lower.
Yesterday, the MSCI Asia Pacific fell 1.11%.
Yesterday, the Nikkei closed 0.25% higher at a price of 28,309.
Currencies
The Bloomberg Dollar Spot Index closed 1.1% higher.
The Euro closed 1% lower at $1.0553.
The British Pound closed 1.7% lower at 1.1824.
The Japanese Yen fell 0.8% closing at $137.14.
Bonds
Germany’s 10-year yield closed 4 basis points lower at 2.70%.
Britain’s 10-year yield closed 4 basis points lower at 3.83%.
U.S.10 Year Treasury closed 2 basis points lower at 3.96%.
Commodities
West Texas Intermediate crude closed 3.83% lower at $77.38 a barrel.
Gold closed 1.90% lower at $1817.10 an ounce.
This morning on the Economic Front we have German Industrial Production and Retail Sales at 7.00 am. This is followed by Euro-Zone GDP and Employment Change along with a speech from ECB President Lagarde. Next, we have U.S. MBA Mortgage Applications at 12.00 pm and the Employment Change at 1.15 pm. Finally, we have the second day of Testimony by Fed Chair Powell to Congress on the Economy and Monetary Policy at 3.00 pm.
Cash S&P 500
Memo to Self: Do not get caught long on a Tuesday!! This is the second Tuesday out of the last three when the S&P fell almost 2%. Two-year yields making new highs is not the way to for a Fed Chairman who wants to avoid a recession. I wrote extensively a couple of weeks ago why it make more sense to be in T-Bills or CDs that have a yield over 5% than be in the Dow. The S&P is still trading at the same level it was in May 2021. The 10-Yeaar Yield closed lower which steepened the Yield Curve even further. Poor Powell looks to all over the map again. Just a month ago he talked about stepping it down and disinflation, now he is leading the markets again. By putting emphasis on the upcoming data releases, the risk is for even more gaps in the S&P. This Friday’s NFP and next Week’s CPI will now be front and centre. This is all good news for day traders as there will be plenty of two-way price action over the coming weeks. Yesterday’s move lower saw the whole of my buy range filled for a 4017 average long position before stopping me out of this position at 3993 and I am now flat. The next major support is the 150 MA which comes in at 3970. As a result I will be a strong buyer from 3963/3978 with a wider 3949 ‘’Closing Stop’’. I still do not want to be short the market at this time.
EUR/USD
The Euro got hammered yesterday, trading the whole of my buy range for a now 1.0590 average long position. I will leave my 1.0495 wider ‘’Closing Stop’’ unchanged for now. I will also lower my T/P level to 1.0630. If any of the above levels are hit I will be back with a new update for my Platinum Members.
March Dollar Index
The Dollar soared on the 50-basis points rate hike expectation. This move higher saw the whole of my sell range triggered, for a now 105.30 average short position. I will now raise my T/P level to 104.90 while leaving my 106.10 ‘’Closing Stop’’ unchanged.
Cash DAX
I am still flat as amazingly the DAX never came close to yesterday’s buy range. As I am still long the Dow, I will now lower my DAX buy level to 15250/15330 with a lower 15165 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 15400.
Cash FTSE
I am still flat the FTSE as the market again traded in a narrow range. I will lower my buy level slightly to 7780/7840 with a lower 7725 ‘’Closing Stop’’. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
The Dow led yesterday’s sell-off, closing lower by 1.72%. This move saw the whole of my buy range triggered for a now 33010 average long position. I will now lower my T/P level to 33110 while leaving my 32795 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
My NDX plan worked well as the market hit my initial 12180 buy level before thankfully rallying to my 12270 T/P level and I am now flat. Today I will again be a buyer on any further dip lower to 11970/12120 with the same 11895 ‘’Closing Stop’’, which is just below the 200-Day Moving Average.
June BUND
I have now rolled to the June Contract. The June Contract trades at a Discount to the March Contract of 95 points. Earlier the March Contract rallied to my 132.10 T/P level on yesterday’s 131.60 long position and I am now flat. The June Contract has support from 129.90/130.60 where I will be a buyer with a 128.95 wider ‘’Closing Stop’’. I still do not want to be short the Bund at this time.
Gold Rolling Contract
My fears that Gold was trading heavy certainly proved correct yesterday as the market traded the whole of my buy range for a now 1823 average long position. I will leave my 1803 ‘’Closing Stop’’ unchanged. I will now lower my T/P level to 1828. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Silver Rolling Contract
I am now 300 points offside on Silver. I have bought some Silver here for my pension on the New York close. I will also add to my existing 23.10 Silver position at a price of 19.70. I will have a ‘’Closing Stop’’ at 18.95 on the whole position. I will have no T/P level for now. If my 19.70 buy level is filled I will be back with a new update for my Platinum Members.
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