Although the NSDAQ fell a hefty 1.75% yesterday the Dow helped by the GM news ended Wednesday with a gain of 0.27%. Despite the aggressive sell-off in the NDX, the VIX still closed lower at a price of 13.94. The Bank of Canada surprised markets with a 25 basis point rate hike, bringing the Overnight Rate to 4.75%. General Motors (GM) announced a significant investment of over $1 billion in two Michigan plants to facilitate the production of next-generation heavy-duty trucks. The plans involve allocating $788 million to upgrade the Flint Assembly plant, enabling it to manufacture heavy-duty gas and diesel trucks. Additionally, $233 million will be invested in the Flint Metal Centre to support the vehicle production process. GM’s investment reaffirms its commitment to the region and highlights its focus on advancing the development of cutting-edge heavy-duty trucks. On Tuesday, the Securities and Exchange Commission (SEC) filed a lawsuit against Coinbase (COIN) in federal court in New York, accusing the cryptocurrency firm of violating SEC rules over an extended period. The SEC’s complaint, spanning 101 pages, claims that Coinbase, the largest cryptocurrency platform in the United States, bypassed regulations by enabling users to trade multiple cryptocurrencies that were essentially unregistered securities. After years of public feuding, the PGA Tour and LIV Golf, rival golf circuits, have unexpectedly announced a merger, bringing an end to their contentious battle. Yasir Al Rumayyan, the chairman of Saudi Arabia’s Public Investment Fund and LIV’s major supporter, engaged in secret discussions with top PGA Tour officials over the last few months that culminated in the two parties reaching an agreement. The merger marks a significant shakeup in the golfing world and a major revenue generating deal for the business world. Following the resolution of the debt ceiling fight, the Treasury department aims to replenish its cash balance, which recently hit its lowest level since 2017. However, the U.S. government’s planned borrowing spree of $1 trillion is expected to place additional pressure on the country’s banking system. JPMorgan (JPM) estimates that Washington will need to borrow $1.1 trillion through short-dated Treasury bills by the end of 2023, with $850 billion in net bill issuance anticipated over the next four months. This surge in borrowing raises concerns about the impact on the banking sector and its ability to manage the increased strain. European Markets closed lower. The Organisation for Economic Cooperation and Development (“OECD”) predicts a subdued recovery for the global economy, impacted by the lingering effects of the pandemic and Russia’s conflict in Ukraine. Persistently high inflation and the cautious policies implemented by major central banks to curb rising prices further hinder economic growth. The OECD’s latest Economic Outlook forecasts a modest 2.7% expansion of world output in 2023, followed by a slight uptick to 2.9% in 2024—both figures falling short of the pre-pandemic average of 3.4%. Klaas Knot, a member of the European Central Bank’s (“ECB”) Governing Council, expresses concerns that persistent inflation could lead to future increases in borrowing costs. Knot emphasises the need for further tightening measures, stating that if inflation continues to remain elevated, additional rate hikes may be required. The warning comes as Knot addresses lawmakers in the Netherlands, highlighting the possibility of prolonged high inflation and the potential consequences for monetary policy. In Asia, Chinese exports experience a significant decline, marking the first drop in three months, amidst a weakening global demand. Official data reveals a 7.5% contraction in overseas shipments compared to the previous year, reaching $284 billion in May. The figures surpass the anticipated 1.8% decline, indicating challenges across various export destinations, including the United States and Japan. Elsewhere, Oil rose 1.10% while Gold closed lower by 1%.
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 105 points yesterday and is now ahead by 944 points for June. 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 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 0.38% lower at a price of 4267.
The Dow Jones Industrial Average closed 91 points higher for a 0.27% gain at a price of 33,665.
The NASDAQ 100 closed 1.75% lower at a price of 14,303.
The Stoxx Europe 600 Index closed 0.19% lower.
Yesterday, the MSCI Asia Pacific closed 0.4% lower.
Yesterday, the Nikkei closed 1.82% lower at a price of 31,913.
Currencies
The Bloomberg Dollar Spot Index closed 0.20% lower.
The Euro closed 0.1% higher at $1.0705.
The British Pound closed 0.1% higher at 1.2438.
The Japanese Yen fell 0.4% closing at $140.20.
Bonds
Germany’s 10-year yield closed 10 basis points higher at 2.46%.
Britain’s 10-year yield closed 4 basis points higher at 4.25%.
U.S.10 Year Treasury closed 8 basis points higher at 3.79%.
Commodities
West Texas Intermediate crude closed 1.10% higher at $72.53 a barrel.
Gold closed 1% lower at $1941.10 an ounce.
This morning on the Economic Front we have Euro-Zone GDP and Employment Change at 10.00 am. This is followed by U.S Weekly Jobless Claims at 1.30 pm. Finally, we have Wholesale Inventories at 3.00 pm.
Cash S&P 500
Despite a 2% reversal in the NDX and a 35 Handle fall in the S&P off its afternoon highs, the VIX made new three-year lows. Is the refilling of the TGA account the culprit here? I wonder and this has to be determined. However, for bears to regain control the S&P needs to break and spend some time below 4200. Otherwise, a weak CPI and benign Fed can easily see the S&P extend higher to the 4400 major resistance level. It is incredible that the S&P is 30% below its August highs while the S&P is finding it difficult to break these highs just adding to the number of anomalies that we have at this time. The surprise 0.25% rate hike by the Bank of Canada has traders worried to see if the Fed does the same thing next week. I am still flat as I continue with my strategy of selling Rips and buying Dips not wanting to get caught in the middle where there is no edge. I will now lower my S&P buy level to 4128/4143 with a lower 4115 ‘’Closing Stop’’. I will also lower my sell level to 4302/4317 with a 4331 tight ‘’Closing Stop’’.
EUR/USD
No Change. The Euro hit a high at 1.0740 before falling 40 points into the close. I am still long at 1.0710. I will add to this position at 1.0640 while leaving my 1.0595 ‘’Closing Stop’’ unchanged. I will now lower my T/P level to 1.0745. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
June Dollar Index
No Change. I am still flat as I continue to be a seller on any further rally to 104.50/105.10 with the same 105.65 ‘’Closing Stop’’.
Cash DAX
I am still flat the DAX. The market reversed most of Tuesday’s gains as it followed the NDX lower. I will now lower my sell level to 16040/16120 with a lower 16205 ‘’Closing Stop’’. I still do not want to be long the DAX at this time.
Cash FTSE
No Change. I am still a buyer on any dip lower to 7490/7560 with the same 6445 ‘’Closing Stop’’. Despite the higher Gilt Yields I still do not want to be short the market at this time.
Dow Rolling Contract
No Change. I am still flat. I will continue to be a buyer on any dip lower to 33250/33500 with the same 33095 ‘’Closing Stop’’. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
Finally, the overbought technical signals for the NDX proved their worth as the NDX fell over 1.5% yesterday. The NDX hit a morning high at 14645 before falling over 300 points. This move lower saw my 14430 T/P level triggered on my latest 14495 average short position and I am now flat. I cannot find a day in history when the NDX dumps 2% and the VIX makes a new three-year closing low. We have short-term resistance from 14450/14600 where I will again be a seller with the same 14705 ‘’Closing Stop’’. I still do not want to be long the NDX at this time.
September BUND
Apologies. I made a mistake as the June Contract expired on Tuesday. The good news for anyone who was long is the market hit my 135.30 T/P level on my 134.90 average long position before expiry. I am still flat and I have now switched to the September Contract which got hit hard yesterday. This morning the September Contract is trading at 133.30 with Yields higher at 2.46%. We have support from 132.00/132.70 where I will be a buyer with a 131.35 ‘’Closing Stop’’. If triggered, I will have a T/P level at 133.35.
Gold Rolling Contract
Gold traded lower to my 1942 buy level. I am still long and I will add to this position at 1927 with a now lower 1915 ‘’Closing Stop’’. I will have a T/P level at 1951 on this position.
Silver Rolling Contract
No Change. I am still long from Monday at 23.40 with the same 24.20 T/P level. Silver hit a high yesterday at 24.05 before following Gold lower. I will add to this position at 22.70 with the same no stop policy. If this changes I will be back with a new update for my Platinum Members.
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