U.S. Equity Markets reversed some of Friday’s aggressive sell-off to start the week on a positive note, led by the 0.41% gain in the NASDAQ 100. Investors remained focused on some of the positive data that came out of Friday’s Jobs report. However, they remained cautious following comments from JPMorgan Chase and Goldman Sachs about the U.S.’s economic outlook… This caution, along with the news coming out of China, Ukraine, and the U.S. Federal Reserve, resulted in mixed confidence that is helping to drive the recent series of daily rallies and declines. Many remain uncertain about whether inflation has peaked and when it may eventually come down. But for now, China’s reopening measures have helped to slightly boost some markets for the day. Regardless, a key test for the U.S. and other global markets will arrive Friday, as the U.S. Consumer Price Index (“CPI”) will release its most up-to-date figures. I expect the data will show an 8.2% increase in prices in May versus the same period last year. The U.S. Bureau of Labour Statistics’ Job Openings and Labour Turnover Survey’s Non-Farm Payroll data for May showed 390,000 new hires last month versus the anticipated 318,000. Meanwhile, April’s job gains were upwardly revised from 428,000 to 436,000 – suggesting the U.S. economy is continuing to grow amid a tighter job market, as more people working implies there are more individuals with money to spend. These factors, coupled with an unchanged Unemployment rate for May, support the Federal Reserve’s recent 0.5% interest-rate hike and outlook for raising interest rates to 2.5% by the end of 2022. Within the S&P 500, 8 of the 11 sectors finished higher. European Markets closed higher. Equity markets were closed in Austria, Denmark, Norway, Sweden Ireland, and Switzerland for the holidays. Russia’s military launched a missile strike against the Ukrainian capital of Kyiv for the first time in over a month, signalling Moscow’s resolve to continue its assault. British Prime Minister Boris Johnson won his Leadership Contest Vote last night, but his authority has been severely undermined given the fact that 148 MPs voted against him which was over 40% of the vote. The European Central Bank is scheduled to release its latest policy announcement on Thursday, with investors awaiting more information on its rate-hike plans. In Asia, Equity markets were closed in Malaysia, New Zealand, and South Korea for the holidays. Bank of Japan Governor Haruhiko Kuroda said the economy is not at a point where it can handle higher interest rates and reiterated that ongoing stimulus is still needed. China’s National Bureau of Statistics releases its May CPI data on Friday, with inflation growth anticipated to match April. The government in Beijing said it will begin removing restrictions so that employees can return to work, restaurants can reopen, and cinemas can resume operations once again. Elsewhere, Oil fell 0.15% while Gold declined 0.5% on Dollar strength.
To mark my 2550th issue of TraderNoble Daiy 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 435 points yesterday and is now ahead by 1040 points for June after making 3651 points in May, having made 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 0.17% higher at a price of 4115.
The Dow Jones Industrial Average closed 16 points higher for a 0.05% gain at a price of 32,915.
The NASDAQ 100 closed 0.41% higher at a price of 12,599.
The Stoxx Europe 600 Index closed 0.6% higher.
This morning, the MSCI Asia Pacific Index fell 0.5%.
This morning, the Nikkei closed 0.08% higher at a price of 27,937
Currencies
The Bloomberg Dollar Spot Index closed 0.7% higher.
The Euro closed 0.4% lower at $1.0701.
The British Pound closed 0.8% lower at 1.2435.
The Japanese Yen fell 1.2% closing at $132.96.
Bonds
Germany’s 10-year yield closed nine basis points higher at 1.32%.
Britain’s 10-year yield closed eight basis points higher at 2.25%.
US 10 Year Treasury closed 11 basis points higher at 3.01%.
Commodities
West Texas Intermediate crude closed 0.15% lower at $116.05 a barrel.
Gold closed 0.5% lower at $1842.10 an ounce.
This morning on the Economic Front we have Euro-Zone Sentix Investor Confidence at 9.00 am. This is followed by U.S. Trade Balance at 1.30 pm. Finally, we have Consumer Credit at 8.00 pm.
Cash S&P 500
If you told me that 10-Year Treasuries would rise above 3%, the Dollar would rally and Junk Bonds tank I would have expected the S&P to close well lower. Instead, the S&P closed higher after the market again held the key 4080/4110 support area as all eyes turn to next Friday’s key CPI data. Energy prices remain high while key Commodities have rolled over, but what matters is how it filters into Consumer end prices and year over year comparisons. Next week we have the Fed and the expiry of the June Futures and Options Contracts making the next 10-days a decisive period. The only good news is that the Fed speakers are in the quiet- period so we do not have to listen to their nonsense for a while. I still have the firm view that rates will not rise above 2.5% as any higher will cause a major recession given the level of Government Debt and the fact that already in 2022, $25 Trillion has been lost in Global Assets. Yesterday, my S&P plan worked well with the S&P trading the whole of my buy range for a 4130 average long position before rallying to my 4142 revised T/P level with a rebound high of 4167. This is the third time that the 4165/4170 area has been rejected and this is an area that the Bulls need to clear for higher prices. I emailed my Platinum Members to buy the S&P again at 4110 before exiting this position near the close at 4116 and I am now flat. The S&P has short-term support from 4050/4075 where I will be a small buyer with a 4033 tight stop. My only interest in selling the S&P is on a further rally to 4195/4225 with a tight 4243 stop.
EUR/USD
Late yesterday, the Euro traded lower to my 1.0685 buy level. I am still long with a now lower 1.0720 T/P level. I will add to this position at 1.0635 while leaving my 1.0575 stop unchanged. 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 is trading 0.6% higher this morning after the Yen fell a further 1% overnight. The risk of intervention by the Bank of Japan is now high given the weakness of the Yen which is one of main reasons why the Nikkei has outperformed over the past week. The Dollar hit my initial 102.20 sell level. I have now added to this position at 102.80 for a now 102.50 average short position. I will leave my 103.15 stop unchanged while raising my T/P level to 102.20.
Cash DAX
No matter what news is reported the DAX continues to outperform the American Indexes. The price action is telling you not to be short the DAX and I am still flat. I will now raise my buy level 14300/14380 with a higher 14235 stop.
Cash FTSE
Frustratingly, the FTSE missed my 7650 sell level by two points before selling off to sit at 7585 as I go to press. I will now lower my sell level slightly to 7630/7680 with a lower 7735 stop.
Dow Rolling Contract
My Dow plan worked well with the market trading lower to my 32920 buy level on Friday, before rallying to my 33140 revised T/P level and I am still flat. The Dow has short-term support from 32300/32550 where I will be a small buyer with a 32145 stop. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
The NDX was the strongest of the American Indexes again yesterday. The market did not hit my second buy range as I continue to hold onto to my April long position at 14327. I am happy with the rebound in the NDX last week. I will now raise my exit level on this position to 13400. I will not add to my long position today and if anything changes post Friday’s CPI data I will come back with an update for my Platinum Members.
June BUND
No Change. I am still long the Bund at a price of 151.20 with the market trading lower at 149.00 this morning. The Bund is severely oversold and these higher Bond Rates are hurting the ECB big-time. They have to try and engineer a rally in the Bund. They may get that chance at Thursday’s ECB Meeting. I will leave my T/P level unchanged at 151.65 with no stop for now. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold has fallen over 0.5% since Friday. I am now long at 1841 with a now lower 1849 T/P level. I will add to this position at a price of 1825 while lowering my stop to 1814.
Silver Rolling Contract
Silver hit my 22.00 buy level on Friday before rallying to my 22.35 T/P level yesterday and I am now flat. Silver has support from 21.00/21.60 where I will again be a buyer with a 20.45 stop.
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