U.S. Equity Markets closed higher on Monday led by the 1.76% increase in the NASDAQ 100 as investors wait for the latest inflation data this afternoon, just as the Federal Reserve begins deliberations on its monetary policy decision. It is anticipated that headline consumer prices will increase by 0.3% M/M, following a 0.4% rise in April. Additionally, tomorrow, data on Producer Price inflation and Retail Sales will be released, providing further last-second data points for the Fed to make a well-informed policy decision. The inflation report will be closely monitored by market participants to gauge the effectiveness of the Fed’s rate hikes in curbing inflation while avoiding detrimental effects on economic growth. The Federal Reserve is expected to keep interest rates unchanged this week following its two-day policy meeting. However, any policy decision could be a “game-time decision” – a decision finalised at the last possible moment – as policy makers keep a close eye on May’s inflation data that is set to be released on Tuesday. Investors should also pay close attention to the Fed’s “dot plot”, which reveals its expectations for future rate hikes. While some Fed officials have suggested that a pause in rate hikes does not indicate that rates have reached their peak, market expectations currently include a 25-basis point increase in July followed by a similar-sized cut by December. European Markets closed mixed. The European Central Bank (ECB) is likely to take a different path than the Federal Reserve, with expectations of a quarter-point rate hike at their meeting scheduled for the day after the Fed’s decision. Another similar-sized rate increase is anticipated to follow in July. ECB President Christine Lagarde previously stated that it is premature to declare a peak in core inflation and reiterated that further rate hikes would be necessary. In Asia, the Bank of Japan is expected to keep its monetary policy unchanged at its upcoming meeting on Friday. The recently appointed Governor Kazuo Ueda has indicated that an ultra-easy policy will be maintained until there is stability and sustainability in wage gains and inflation. China is set to release crucial economic data on Thursday, including May figures on new home prices, unemployment, industrial production, and retail sales. These releases come at a time when recent data suggests that China’s post-lockdown economic recovery is slowing down. Despite a significant miss in China’s May exports data reported last week, the market remained largely unaffected. Investors interpreted the weak reading as further support for the case of implementing stimulus measures. These upcoming data releases will be closely watched by investors, as they provide insights into the health of China’s economy. Elsewhere, Oil fell a substantial 4.35% while Gold closed lower by 0.20%.
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 lost 155 points yesterday and is now ahead by 1210 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 0.93% higher at a price of 4338.
The Dow Jones Industrial Average closed 189 points higher for a 0.55% gain at a price of 34,066.
The NASDAQ 100 closed 1.76% higher at a price of 14,784.
The Stoxx Europe 600 Index closed 0.12% higher.
Yesterday, the MSCI Asia Pacific closed 0.7% higher.
Yesterday, the Nikkei closed 0.52% higher at a price of 32,434.
Currencies
The Bloomberg Dollar Spot Index closed 0.2% higher.
The Euro closed 0.1% higher at $1.0757.
The British Pound closed 0.4% lower higher at 1.2510.
The Japanese Yen fell 0.1% closing at $139.60.
Bonds
Germany’s 10-year yield closed 2 basis points lower at 2.36%.
Britain’s 10-year yield closed 10 basis points higher at 4.34%.
U.S.10 Year Treasury closed 1 basis points lower at 3.73%.
Commodities
West Texas Intermediate crude closed 4.35% lower at $67.12 a barrel.
Gold closed 0.2% lower at $1957.10 an ounce.
This morning on the Economic Front we have German CPI and U.K Employment at 7.00 am. Next, we have German and Euro-Zone ZEW Survey at 10.00 am. At 11.00 am we have U.S. NFIB Business Optimism Index followed by CPI at 1.30 pm. Finally, we have a speech from Bank of England Governor at 3.00 pm.
Cash S&P 500
If you get a sense, there is a panic frenzy to buy stocks you not be mistaken. Non-stop bullish headlines yesterday saw both the S&P and NDX hit new highs for 2023. Momentum and panic buying driven melt up until they exhaust themselves. If we get the right CPI print this afternoon and a benign Fed tomorrow, then 4400 is on the cards for the S&P. There was one oddity about yesterday’s surge and that is the VIX flying higher along with equity markets ending Monday with a gain of 8.50%. What does it mean? Typically, a rising VIX with a rising stock market is a warning sign. With the 14-Day RSI closing at 70 for the S&P and 74 for the NDX I certainly do not want to be chasing higher prices. The S&P closed higher than last August when Powell wanted to be Paul Volcker. The Fed have to be worried that all this exuberance is leading to inflation becoming again resurgent resulting in Powell ending up like Arthur Burns, precisely the guy he does not want to be. After the S&P hit my initial 4318 sell level the market fell to an afternoon low at 4305 allowing me to cover this latest short position at my revised 4312 T/P level. Subsequently, I emailed my Platinum Members to sell the S&P again. As a result I am now short at an average rate of 4335. I will have a 4319 T/P level on this position with a 4361 ‘’Closing Stop’’. If any of the above levels are hit I will be back with a new update for my Platinum Members.
EUR/USD
No Change. The Euro traded in a narrow range yesterday, and I am still flat. I will continue to be a buyer on any dip lower to 1.0650/1.0720 with the same 1.0595 ‘’Closing Stop’’. I still do not want to be short the Euro at this time.
June Dollar Index
The Dollar rallied to my initial 103.70 sell level. I will add to this position at 104.50 while leaving my 105.05 ‘’Closing Stop’’ unchanged. I will now raise my T/P leveI to 103.30. f any of the above levels are hit I will be back with a new update for my Platinum Members..
Cash DAX
The DAX surged yesterday, reversing all of the last week’s losses. This move higher has me short at an average rate of 16050. I will raise my T/P level to 16020 while leaving my 16205 ‘’Closing Stop’’ unchanged. I still do not want to be long the DAX at this time.
Cash FTSE
The FTSE continues to trade heavy, and I am still flat. The FTSE has strong support from 7480/7540. I will now raise my buy level to this area with a higher 7425 ‘’Closing Stop’’.
Dow Rolling Contract
No Change. The Dow had some negative divergences at yesterday’s highs. Ahead of CPI this afternoon and the FOMC Statement tomorrow, I will continue to be a buyer from 33400/33650 with the same 33095 wider ‘’Closing Stop’’. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
Wrong! Clearly, I am wrong in trying to sell the NDX as the market continues to squeeze higher on this extended chart. If liquidity is not reduced and Fed Chair Powell does not try to talk down any exuberance at his press conference tomorrow, then there is risk the NDX extends to 14850/15000. Having been stopped out of my 14555 short position at 14770 and I am now flat, I will look to sell in the above range with a 15105 ‘’Closing Stop’’. If executed, I will have a T/P level at 14700.
September BUND
I am still flat. I will now raise my buy level to 133.00/133.80 with a higher 132.32 ‘’Closing Stop’’.
Gold Rolling Contract
Gold continues to trade in a narrow range around the 1960 pivot point, and I am still flat. I will continue to be a buyer on any dip lower to 1928/1943 with the same 1915 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. I am still an aggressive buyer on any dip lower 22.80/23.60 with the same no stop.
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