U.S. Equity Markets fell after we saw the release of the Federal Reserve’s Minutes from its June meeting, where interest rates were kept unchanged. The Minutes provided further clarity on the discussion regarding the balance of risks in policy tightening, as highlighted by Fed Chair Jerome Powell. Some Members wanted a 25-basis point rate hike at the June Meeting. The Fed has indicated that two more rate hikes are expected this year, with one likely to occur in July. Fed Chair Powell reaffirmed that notion when he said a “strong majority” of policymakers anticipate at least two more interest rate increases by the end of the year. However, a recent indicator of inflation suggests that price pressures are easing, which has raised hopes that the Fed’s rate-hiking cycle may be nearing its end. Investors are eagerly anticipating Friday’s U.S. Employment Report, which is expected to reveal the addition of 200,000 jobs in June. In May, the economy surpassed expectations by adding 339,000 jobs, although the unemployment rate rose slightly to 3.7%. If the labour market continues to show strength, it could reinforce the belief that the U.S. economy can avoid a severe recession despite the Federal Reserve’s aggressive tightening measures. Prior to the jobs report, investors can also monitor updates on private sector hiring, JOLTS job openings, and weekly unemployment claims. As the second half of the year gets into full swing, economists are cautiously weighing the unexpectedly strong economic data of the last month. However, despite positive indicators such as a strong housing market, consumer confidence, and an upward revision of first quarter GDP, economists are still cautious about declaring the all-clear for a 2023 recession. Consumption has been a major driver of the economy’s resilience, but economists expect momentum to slow as the effects of tighter monetary policy and financial conditions take hold. The stock market has followed the economy’s positive trend in the first half of 2023 (albeit led by a select few tech companies), leaving investors uncertain about the sustainability of the perceived new bull-market. European Markets closed lower following the rise in Bond Yields. In Asia, the Nikkei continued its recent fall, closing a further 1.75% lower this morning. The Nikkei has now fallen over 1000 points since Monday’s 33-year high. Elsewhere, Oil rose 2.87% while a strong Dollar saw Gold fall 0.50%.
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 150 points for July, after closing June with a gain of 2683 points. 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 0.20% lower at a price of 4446.
The Dow Jones Industrial Average closed 129 points lower for a 0.38% loss at a price of 34,288.
The NASDAQ 100 closed 0.09% lower at a price of 15,203.
The Stoxx Europe 600 Index closed 0.73% lower.
This morning, the MSCI Asia Pacific closed 0.3% lower.
This morning, the Nikkei closed 1.75% lower at a price of 32,755.
Currencies
The Bloomberg Dollar Spot Index closed 0.20% higher.
The Euro closed 0.1% lower at $1.0860.
The British Pound closed 0.1% higher at 1.2712.
The Japanese Yen rose 0.7% closing at $143.81.
Bonds
Germany’s 10-year yield closed 4 basis points higher at 2.48%.
Britain’s 10-year yield closed 7 basis points higher at 4.49%.
U.S.10 Year Treasury closed 9 basis points higher at 3.94%.
Commodities
West Texas Intermediate crude closed 2.87% higher at $71.79 a barrel.
Gold closed 0.5% lower at $1916.10 an ounce.
This morning on the Economic Front we already had the release of German Factory Orders which rose 6.4% versus +1.2% expected. At 10.00 am we have Euro-Zone Retail Sales followed by U.S. MBA Mortgage Applications at 12.00 pm. Next, we have the ADP Employment Report at 1.15 pm and the Weekly Jobless Claims at 1.30 pm. This is followed by the Composite PMI at 2.45 pm. Finally, at 3.00 pm we have ISM PMI and JOLTS Job Openings.
Cash S&P 500
It is only a matter of time before the market realises that higher bond yields in this debt construct are not bullish. They are a drag on earnings, debt servicing and future growth prospects. For one, they have produced the lowest earnings yield since 2007. The risk reward is simply not there as I have been saying for the past number of weeks. If you are guaranteed a return of over 5% in the 1-year or 2-year CD why take the risk. The Fear & Greed Index hit an extreme reading of 85 yesterday before falling to close at 80 last night. This is one of the highest readings in this Index in many years. Apple is just a monster stock. We have seen $1 trillion in market cap added in a straight line on declining earnings and revenue growth. Incredibly, 24% of Berkshire’s entire market cap is now entirely attributed to its ownership of Apple. No diversification which is scary. The problem with looking for a decline in July is the seasonality chart. The past eight Julys have been positive. My own view is that any sell-off will be met by aggressive buying at the 50-Day Moving Averages. This would be a big sell-off as the 50 Day MA comes in at 4238 this morning. Both the $NYSI and $BPSPX are max overbought. I am still flat the S&P with the market selling off this morning. As I am long the Dow, I will now lower my S&P buy level to 4398/4413 with a lower 4383 ‘’Closing Stop’’. The S&P has resistance from 4447/4462. I will now lower my sell level to this range with a 4475 tight ‘’Closing Stop’’.
EUR/USD
No Change. I am still long at 1.0900 with a now lower 109.40 T/P level. I will continue to look to add to this position at 1.0830 while leaving my 1.0785 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
June Dollar Index
The Dollar is trading higher at 103.20 this morning. I will now raise my buy level to 102.20/102.80 with a higher 101.60 ‘’Closing Stop’’. If triggered, I will have a T/P level at 103.20.
Cash DAX
The DAX is trading 150 points lower from where I marked prices 24 hours ago. As I am now long the FTSE, I will now lower my DAX buy level to 15650/15740 where I will be an aggressive buyer with a 15575 ‘’Closing Stop’’.
Cash FTSE
The FTSE got hit hard yesterday, trading the whole of my buy range for a now 7425 average long position. I will leave my 7355 ‘’Closing Stop’’ unchanged while lowering my T/P level to 7465. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
Overnight, the Dow hit my buy level at 34160. I am still long and I will continue to look to add to this position on any further move lower to 33920. I will leave my 33795 ‘’Closing Stop’’ unchanged while lowering my T/P level to 33265. If this view changes I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
My latest 15230 short NDX position worked well as the market traded lower to my 15125 T/P level. Subsequently, I emailed my Platinum Members to sell yesterday’s strong rally at 15230. I am still short, and I will add to this position at 15380 with a now higher 15505 ‘’Closing Stop’’. I will have a T/P level at 15110 on this position. If this view changes I will be back with a new update for my Platinum Members.
September BUND
This morning, much better than expected German Factory Orders saw the Bund hit my second buy level at 132.50 for a now 132.85 average long position. Yesterday the Bund missed my original 133.70 T/P level by five points before falling. I will now lower my T/P level on this position to 133.20 while leaving my 131.95 ‘’Closing Stop’’ unchanged.
Gold Rolling Contract
Gold hit a high at 1935 shortly after the U.S. Markets opened. Subsequently, Gold fell $18 into the close. I am still flat. As I am still long Silver, I will now lower my Gold buy level to 1890/1905 with a lower 1879 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. Thankfully, we are now back above $23. I am still long at an average rate of 23.63 with the same no stop. I will now lower my T/P level to 24.20. If this changes I will be back with a new update for my Platinum Members.
Recent Comments