Equity Markets closed lower. The Dow again led the declines, closing lower by 0.86%. This move lower saw the VIX spike 9.55%. There seems to be no end to the U.S. Banking Crisis among regional banks, PacWest Bancorp (PACW) could be the next domino to fall. The bank is currently exploring options for a potential sale or capital raise, and the stock has fallen more than 50% in after-hours trading. As a result, the Bank Index closed at new 2023 lows, falling over 4%. Qualcomm (QCOM) reported second-quarter earnings that matched Wall Street expectations. However, it reported sales for phone chips fell 17% from the year prior. CEO Cristiano Amon cited a challenging macro environment and a non-existent recovery in China as the leading causes of suppressed sales. CVS Health (CVS) reported first-quarter results that topped analyst expectations for earnings and revenue, thanks to resilient consumer demand. However, the company lowered profit guidance due to the recent acquisitions of Signify Health and Oak Street Health. On the plus size, Apple reported earnings after the close, beating expectations on both expansion and revenue. They announced a further $90bn in buybacks. The stock is up over 1% as I go to press. The Institute for Supply Management’s gauge of service-sector activity expanded marginally up to 51.9. Despite remaining above the threshold for expansion versus contraction – which is 50 – modest growth was restrained by the weakest level of business activity since 2020. This means that demand is finally starting to soften in the service sector, a sign that higher interest rates and elevated inflation may finally be outpacing the resilience of consumers. European Markets closed lower. The European Central Bank (“ECB”) raised interest rates by 25 basis points as quelling persistently high inflation remains the primary objective for ECB President Christine Lagarde. This marked the first downshift in the pace of rate hikes for the central bank. In Asia, falling orders and low domestic demand led to the unexpected contraction in China’s factory activity for April. This now marks another worrying sign that the manufacturing sector has hit a snag in its post-lockdown recovery. However, analysts expect a stronger service sector surge to prop up growth projections for the year. Elsewhere, Oil closed flat after a volatile session while gold rose 0.3%.
To mark my 2800th 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 made 305 points yesterday and is now ahead by 1563 points for May. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made 3164 points in February, 4687 points in January 2054 points in December, 4789 points in November and 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 0.72% lower at a price of 4061.
The Dow Jones Industrial Average closed 286 points lower for a 0.86% loss at a price of 33,127.
The NASDAQ 100 closed 0.37% lower at a price of 12,982.
The Stoxx Europe 600 Index closed 0.47% lower.
This morning, the MSCI Asia Pacific closed 0.30% higher.
This morning, the Nikkei closed 0.12% higher at a price of 29,157.
Currencies
The Bloomberg Dollar Spot Index closed 0.4% higher.
The Euro closed 0.2% lower at $1.1032.
The British Pound closed 0.3% higher at 1.2602.
The Japanese Yen rose 0.6% closing at $134.15.
Bonds
Germany’s 10-year yield closed 7 basis points lower at 2.18%.
Britain’s 10-year yield closed 4 basis points lower at 3.65%.
U.S.10 Year Treasury closed 4 basis points lower at 3.32%.
Commodities
West Texas Intermediate crude closed 0.06% lower at $68.51 a barrel.
Gold closed 0.4% higher at $2045.10 an ounce.
This morning on the Economic Front we already had the release of German Factory Orders which fell a huge 10.7% versus – 2.2% expected. At 10.00 am we have Euro-Zone Retail Sales. This is followed by U.S. Non-Farm Payrolls including the Unemployment Rate and Average Earnings at 1.30 pm. Finally, we have a speech from Fed Member Cook at 6.00 pm and Consumer Credit at 8.00 pm.
Cash S&P 500
Buying the dip continues to pay dividends. I will continue with this strategy until the S&P breaks and closes below its 50-Day Moving Average which comes in at 4039 this morning. Yesterday’s move lower saw my 4060 initial buy level triggered before rallying to my 4073 T/P level and I am now flat. Better earnings from Apple sees the S&P trading 15 handles higher from last night’s close. Despite the disaster in the banking sector the markets are holding key support levels for now. Yesterday’s 4048 low print was right at the bottom of the Daily Bollinger Band. This is another reason not to be short. We have the NFP at 1.30 pm which has the potential to cause plenty of two-way volatility. However, the last five Fridays has seen the VIX get crushed. This is another reason not to press the downside. The S&P has strong support from 4033/4053 where I will be a strong buyer with a tight 4019 ‘’Closing Stop’’.
EUR/USD
I am still flat the Euro as the market missed my 1.0980 buy level before having a small rally into the New York close. Ahead of the weekend I will now lower my buy level to 1.0870/1.0950 with a lower 1.0815 ‘’Closing Stop’’. I do not want to be short the Euro at this time.
June Dollar Index
I am still flat the Dollar as the market never came close to yesterday’s buy range, closing higher by 0.50%. The Dollar has support from 99.90/100.60. I will now raise my buy level to this area with a higher 99.35 ‘’Closing Stop’’.
Cash DAX
My DAX plan worked well as the market traded lower to my 15670-buy level before rallying to my revised 15740 T/P level and I am now flat. The DAX has support from 15550/15630 where I will again be a buyer with a lower 15485 ‘’Closing Stop’’.
Cash FTSE
No Change. I am still long at an average rate of 7795 with the same 7695 ‘’Closing Stop’’. I will again lower my T/P level to 7810. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
New lows in the Bank Index saw the Dow trade the whole of yesterday’s buy range for a 33110 average long position. The Dow made a low at 32930 before having a small rally into the close. Better earnings from Apple saw the Dow rally to my revised 33215 T/P level and I am now flat. I would have expected a better rally off the 50 Day Moving Average (33079) which was disappointing. This level has to be watched closely. However, the Dow is oversold and due a bounce. The McClellan Oscillator is getting oversold, closing at -166 last night. Today, I will again be a buyer from 32800/33050 with a tight 32695 ‘’Closing Stop’’.
Cash NASDAQ 100
No Change. I am still flat. Given the better results from Apple I would have expected the NASDAQ to be trading higher this morning. Lower Bond Yields have not added support to tech stocks which is another warning sign. Ahead of NFP and my concerns for the market I will not chase the NDX higher leaving my 12730/12880 buy level unchanged with the same 12595 wider Closing Stop’’. The 50 Day MA comes in at 12663 and should offer strong support on any initial test.
June BUND
Frustratingly, the Bund missed yesterday’s initial 135.40 buy level by 25 points before rallying over 150 points and I am still flat. This move higher tells you that no matter what the ECB say, the rate rises are over. You cannot hike rates into a banking crisis. This is an insane policy. I will now raise my Bund buy level to 135.10/1365.90 with a higher 134.45 ‘’Closing Stop’’. I still do not want to be short the Bund at this time.
Gold Rolling Contract
Gold continued Wednesday’s surge, trading at 2047 as I go to press. I will now raise my buy level to 2010/2025 with a higher 1999 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. I am still an aggressive buyer on any dip lower to 24.80/25.60 with the same 23.85 ‘’Closing Stop’’.
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