U.S Equity Markets closed flat on Wednesday following a boring session. While the Dow closed lower, the NASDAQ 100 ended the session with a small 0.12% gain. After the close the Federal Reserve reported that U.S. Banks had passed the latest stress tests with capital ratios well above requirement. The VIX fell 2.46%, closing near the lows for the year at a price of 13.43. Recent data has revealed surprising strength in various sectors of the U.S. economy, indicating resilience and pushing back the possibility of a recession. Reports from Tuesday showed that purchases of new homes reached the fastest annual rate in over a year, Durable Goods Orders exceeded expectations, and Consumer Confidence reached its highest level since the beginning of 2022. Additionally, housing prices in the U.S. recorded a third consecutive monthly increase but were still down from a year ago. During a recent fundraiser, President Joe Biden expressed his belief that the U.S. will be able to steer clear of the potential recession that economists and banks have been predicting. He mentioned that economists have been forecasting a recession for the next month, but he disagrees with this outlook. Biden pointed to the strength of the labour market and his efforts to address inflation as reasons for his optimism. UBS (UBS) is set to reduce Credit Suisse’s workforce by more than half, beginning next month, following the emergency takeover of the bank. The cuts are expected to primarily impact bankers, traders, and support staff in Credit Suisse’s investment bank, particularly in London, New York, and certain parts of Asia. Employees have been informed to anticipate three rounds of cuts throughout this year, with the first round expected to occur by the end of July, followed by two additional rounds tentatively scheduled for September and October. JPMorgan Chase (JPM) is reducing its investment banking workforce in North America by approximately 40 employees, as part of broader international cuts in response to a slowdown in dealmaking. The decision follows a previous round of layoffs that saw the elimination of around 20 investment banking positions in Asia. The uncertainty of the global economic landscape has hindered any growth industry wide, with Goldman Sachs (GS) and Citigroup (C) also reporting recent layoffs. European Markets closed higher. Investors are increasingly worried that the European Central Bank’s anticipated interest rate hikes will result in a more severe recession for the Euro-Zone. Germany’s 10-year yield, the bloc’s benchmark, rose to 2.32%, 88.3 basis points lower than the two-year bond yield, leaving the curve at its most inverted since September 1992. This pessimistic view suggests that the market anticipates a challenging economic environment ahead for the Euro-Zone due to the potential impact of further rate hikes. The government of Italian Prime Minister Giorgia Meloni has chosen Fabio Panetta, a member of the Executive Board of the European Central Bank, as the next governor of the Bank of Italy, succeeding Ignazio Visco. The nomination is subject to approval by Sergio Mattarella, the head of state, before Panetta can assume the role after Visco’s second and final term ends at the end of October. With Italy holding one of the largest debt positions in Europe, the appointment is potentially one of the most significant for the new conservative administration that is actively trying to reshape the country’s economic outlook. In Asia, Industrial firms in China experienced further declines in profits in May, reflecting soft demand and ongoing factory-gate deflation. Data released by the National Bureau of Statistics on Wednesday revealed a 12.6% drop in profits compared to the same period last year. These figures highlight the persistent economic challenges in China, where the recovery has been encountering warning signs. Elsewhere, Oil rose 2.75% while Gold fell 0.30%.
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For anyone following my Platinum Service it made 95 points yesterday and is now ahead by 2838 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 0.04% lower at a price of 4376.
The Dow Jones Industrial Average closed 74 points lower for a 0.22% loss at a price of 33,852.
The NASDAQ 100 closed 0.12% higher at a price of 14,964.
The Stoxx Europe 600 Index closed 0.74% higher.
This morning, the MSCI Asia Pacific closed 0.4% higher.
This morning, the Nikkei closed 0.12% higher at a price of 33,234.
Currencies
The Bloomberg Dollar Spot Index closed 0.39% higher.
The Euro closed 0.4% lower at $1.0912.
The British Pound closed 0.7% lower at 1.2641.
The Japanese Yen fell 0.4% closing at $144.57.
Bonds
Germany’s 10-year yield closed 5 basis points lower at 2.31%.
Britain’s 10-year yield closed 3 basis points lower at 4.32%.
U.S.10 Year Treasury closed 2 basis points lower at 3.73%.
Commodities
West Texas Intermediate crude closed 2.75% higher at $69.56 a barrel.
Gold closed 0.3% lower at $1908.10 an ounce.
This morning on the Economic Front we have the Euro-Zone Economic Bulletin at 9.00 am followed by U.K. Consumer Credit and Mortgage Approvals at 9.30 am. Next, we have Euro-Zone Economic Sentiment Indicator and Consumer Confidence at 10.00 am. At 1.00 pm we have German CPI. This is followed by U.S. Weekly Jobless Claims and GDP. Finally, we have Pending Home Sales at 3.00 pm.
Cash S&P 500
The S&P hit a high at 4390 before having a small sell-off into the close. The S&P again closed over its 5 EMA and 8 MA. The Bulls still remain in control. So far, we have seen very little reaction to the stress tests results. Generally, these ‘’tests’’ tend to be biased towards painting a rosier picture than reality. After all, no stress tests saw the SBV and other bank blowups coming. I will continue to be a small seller from 4400/4415 with the same 4431 ‘’Closing Stop’’. I will now raise my buy level to 4338/4353 with a higher 4325 ‘’Closing Stop’’. If any of the above changes I will be back with a new update for my Platinum Members.
EUR/USD
Contrary to my view the Euro fell yesterday and that move lower has continued overnight, trading at 1.0890 this morning. I am now long at 1.0900 with a now lower 1.0960 T/P level. I will add to this trade at 1.0840 while leaving my 1.0785 ‘’Closing Stop’’ unchanged.
June Dollar Index
The Dollar is back above 103 this morning and I am still flat as yesterday’s buy level was never threatened. I will now raise my buy level to 102.00/102.60 with a higher 101.35 ‘’Closing Stop’’. If triggered, I will have a T/P level at 103.05.
Cash DAX
I am still flat the DAX as the market again rallied despite an awful GFK Consumer Confidence report. Lower Bund Yields are telling you that a recession is imminent in Germany. However, just like America, nothing matters with all dips being aggressive bought since the lows of last October. I am not going to chase the DAX higher leaving my 15750/15830 buy level unchanged with the same 15685 ‘’Closing Stop’’. I still do not want to be short the DAX at this time.
Cash FTSE
I am still flat the FTSE as the market again traded in a narrow range. Given the high inflation and Gilt Yields at 4.30%, the FTSE should be lower but is not as every dip is bought. Today, I will continue to be a buyer on any dip lower to 7390/7450 with the same 7335 ‘’Closing Stop’’.
Dow Rolling Contract
My Dow plan worked well as the market traded lower to my 33770-buy level before rallying to my revised 33865 T/P level and I am now flat. After the close the Dow hit a high at 33940 on the stress tests results before falling to sit at 33860 as I go to press. As long as the Dow holds its 50 Day Moving Average (33610) I will continue to be a buyer of dips. Today, my buy level will be from 33400/33650 with a lower 33295 ‘’Closing Stop’’. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
The NDX hit a low of 14860 missing my 14800-buy level before rallying over 200 points off this support level. Nothing matters. Hawkish talk from the key Central Bankers in Portugal was dismissed as the NDX again led Tuesday’s rally. We still have massive underlying weakness in tech stocks as there is no expansion despite all the bullish talk from analysts. However, as long as markets ignore the hard questions it does not matter even with the large yield disconnect. Even Bill Gross came out on Tuesday saying Treasury Yields are too low given the huge supply of longer dated maturities in late summer. Today, I will move my buy level higher to 14750/14900 with a higher 14595 ‘’Closing Stop’’. The NDX has resistance at 15250 which is the June high. I will be a small seller from 15180/15300 with a 15405 ‘’Closing Stop’’.
September BUND
The Bund never came close to yesterday’s buy range, and I am still flat. I am reluctant to chase the Bund higher given the fact that Yields have fallen 20 basis points over the last few days. Therefore, I will leave my 132.80/133.60 buy level unchanged with the same 132.15 ‘’Closing Stop’’.
Gold Rolling Contract
Gold traded in a narrow range and I am still flat. This morning the Dollar is opening higher following the continued strong economic reports. As I am still long and wrong Silver for now I will lower my Gold buy level to 1875/1890 with a wider 1859 ‘’Closing Stop’’. If this changes I will be back with a new update for my Platinum Members.
Silver Rolling Contract
No Change. I am still long at an average rate of 23.63 with the same 24.40 T/P level. I will continue to have no stop on this position. If this changes I will be back with a new update for my Platinum Members.
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