Fed Chair Powell surprised markets with slightly dovish comments. Here is what we saw from the Chair and across the E-mini S&P, E-mini NQ, Treasuries, the Dollar, and Gold.
TRANSCRIPT
Good afternoon, traders. It’s Bill Baruch with Blue Line Futures, and I’m bringing you a post Fed breakdown. But before I get to it, if you’re watching this on YouTube, please click the link below and subscribe like and subscribe if you watch it for a website. There’s also a link below to direct you to YouTube. You could subscribe that way.
We’d love you to follow us. We’d love you to help us build our following. All right, let’s get to it. Yeah, we’re seeing quite a bit of volatility here. After doing that, your pals press conference and afterwards, too, we’ve seen the equity markets extend the range higher on the session, finishing near session highs and the S&P and other indices.
We saw a rally in the Treasury market, the 30 year bond here into the electronic lows, trading to new session highs up more than a point and a half. Now on the the prices are rallying. The yields are coming down. That means the ten year is off in the session by about 17 basis points down to about four, seven, six.
The two year is back below 5%, down about 13 basis points on the day we’re seeing the dollar index give away most of its gains, about half a percent off session highs. The euro regaining a bulk of the session losses on the day. And there’s a lot of volatility still to come here on the week. But here are the big takeaways from Fed Chair Powell’s press conference.
Now, over the year we’ve talked about he’s talked about the risks of doing too much versus too little, and he’s talking about that being very balanced now. I think that was the real key here on the session that really signified that this is a more dovish tone from Fed Chair Powell. He also talked about wage increases coming down significantly over the last 18 months and that the range of estimates for the neutral rate are now is restrictive and we’re within that range of the neutral rate.
So I think overall, if he if you’re taking away what he was talking about here, the real takeaway is his tone was more dovish and he took opportunities to speak, more upbeat about being closer to the endgame in really signaling that we’re going to see a pause unless some of the data comes in much hotter than anticipated here over the coming weeks.
And a lot of data is still to come. I mean, just to come this week, we got more jobless claims tomorrow, unit labor costs as well. Tomorrow, big, big numbers there in the the payroll number, of course, on Friday, non-farm payroll coming on Friday. A lot there take away even from the eurozone in German jobs tomorrow, the Bank of England tomorrow as well.
So a lot of volatility. And let’s not forget Apple earnings after the bell tomorrow. And, you know, earnings have been a big story here for the equity markets today, AMD up nearly 10%. Qualcomm after the bell up 4 to 5%. The Nasdaq, big day, biggest day since on August 29th, up 250 some points here on the E-Mini Nasdaq futures.
So, again, a big day, but here are the levels as we go into tomorrow. We’re not quite at resistance, but there is some pretty crucial, rare major force store resistance levels I see overhead, 40 to 75 in the e-mini, S&P futures, as well as at 14 eight and a quarter in the now e-mini NASDAQ futures. So keep an eye on that.
If we start getting decisively out above their, you know, through the end of the week, the after jobs number on Friday on a weekly closing basis, that could really signal here that we’re at the start of a big seasonal rally. So I’m looking for that as we head into the end of the week with all this data and more earnings to come and then obviously to finish off with jobs.
But I’m also watching these Treasuries very closely. I am long the two year prices to your futures in my commodity trading advisor my CTA that I run I obviously Druckenmiller Stanley Druckenmiller big hedge fund manager something he talked about yesterday in an interview so or this week. So there is some some belief here that that the rates are topping out at least the short end of the curve.
I mean gold and silver, given what the dollar did, given what rates did in the second half of the session here after Fed Chair Powell, it’s really a little disappointing that to see gold back above 2000, obviously some more premium in there right now. And it’s really kind of working through a digesting that at the moment. But a pretty decent floor is developing for now at least 1965, 1975.
And gold. Keep an eye on that. And our team is always here to help. Remember futures trading vol. Substantial risk of loss is not suitable for all investors.
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