U.S. Equity Markets rallied Tuesday as investors wait for the key CPI Report which will be released this afternoon. The Dow again led the rally, closing higher by 1%. Major banks are facing a significant regulatory overhaul as the Federal Reserve pushes for standardised risk estimation and changes to stress tests. Michael Barr, the Fed’s top banking regulator, is advocating for Wall Street banks to adopt a standardised approach to assess credit, operational, and trading risks, rather than relying on internal analysis. The proposed changes are part of a broader effort to align U.S. regulations with international standards known as Basel III. The aim is to ensure that banks set aside sufficient capital to withstand financial tumult and to enhance the accuracy of stress tests in capturing potential risks faced by firms. Berkshire Hathaway Energy, a company led by Warren Buffett, has reached an agreement to acquire Dominion Energy’s (D) stake in a liquefied natural gas (“LNG”) export project in Maryland. The deal, valued at $3.3 billion, will increase Berkshire Hathaway Energy’s ownership of the terminal to 75%. This acquisition will provide the company with control over one of the seven operational LNG export facilities in the U.S. The growing significance of LNG in economic and geopolitical contexts, particularly due to sanctions on Russia following its invasion of Ukraine, has contributed to the value and strategic importance of this investment. Dominion Energy intends to use the proceeds from the sale to repay debt. Several Federal Reserve officials emphasised that further interest rate hikes will be necessary this year to achieve the central bank’s inflation target. Federal Reserve Vice Chair for Supervision Michael Barr, speaking at a Bipartisan Policy Centre meeting, acknowledged the progress made in monetary policy over the past year but noted that there is still work to be done. He stated that a few more rate hikes will likely be required to effectively steer inflation back onto a sustainable path. Similarly, San Francisco Fed President Mary Daly, speaking at the Brookings Institution in Washington, expressed the view that a couple more rate hikes throughout the year will be needed to bring inflation back in line with the target of 2% and ensure a sustainable trajectory. European Markets closed higher. In a significant development for NATO, Turkey has agreed to support Sweden’s bid for membership in the military alliance. This move comes as NATO seeks to enhance its defenses in the wake of Russia’s invasion of Ukraine. According to NATO Secretary-General Jens Stoltenberg, Turkey has committed to advancing Sweden’s NATO membership by urging its parliament to take the necessary steps as soon as possible. The support from Turkey is a major breakthrough in Sweden’s efforts to join NATO and strengthens the alliance’s collective security measures. In Asia, China has indicated that additional economic support measures are on the horizon as authorities take steps to address the challenges faced by the property market. Recent actions include extending loan relief for developers and encouraging negotiations between banks and property companies to ease loan terms. State-run financial newspapers have reported that more supportive policies are likely to be adopted, alongside measures aimed at boosting business confidence. These developments suggest that the Chinese government is actively working to bolster the economy and address concerns in key sectors. Negotiations between the European Union (“EU”) and Australia for a free-trade agreement have reached an impasse due to concerns from the Australian side regarding insufficient access to the EU market for its agricultural exports. Australian Trade Minister Don Farrell, who is currently in Brussels for talks with EU counterpart Valdis Dombrovskis, expressed dissatisfaction with the market entry terms offered by the EU for several Australian products. Farrell stated that he is willing to abandon the negotiations if the EU does not improve its position and offer better terms for Australian agricultural products. This morning the Nikkei closed lower by 1%. This is the sixth fall in the Nikkei in the last seven trading sessions. Overnight the Reserve Bank of New Zealand left Interest Rates unchanged at 5.50%. Elsewhere, Oil rose 2.52% while Gold closed higher by 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 was flat yesterday and is now ahead by 335 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 0.67% higher at a price of 4439.
The Dow Jones Industrial Average closed 317 points higher for a 0.93% gain at a price of 34,261.
The NASDAQ 100 closed 0.49% higher at a price of 15,119.
The Stoxx Europe 600 Index closed 0.72% higher.
This morning, the MSCI Asia Pacific closed 0.4% higher.
This morning, the Nikkei closed 0.81% lower at a price of 31,943.
Currencies
The Bloomberg Dollar Spot Index closed 0.40% lower.
The Euro closed 0.1% higher at $1.1011.
The British Pound closed 0.3% higher at 1.2931.
The Japanese Yen rose 0.6% closing at $140.10.
Bonds
Germany’s 10-year yield closed 3 basis points higher at 2.62%.
Britain’s 10-year yield closed 3 basis points higher at 4.67%.
U.S.10 Year Treasury closed 4 basis points lower at 3.95%.
Commodities
West Texas Intermediate crude closed 2.52% higher at $74.83 a barrel.
Gold closed 0.5% higher at $1935.10 an ounce.
This morning on the Economic Front we have a 10-year German Bund and 10 -Year U.K Gilt Auction at 10.30 am. At the same time, we will have the Minutes from the last Bank of England Meeting. Next, we have U.S. MBA Mortgage Applications at 12.00 pm, followed by the all-important CPI at 1.30 pm. Finally, we have a speech from Fed Member Kashkari at 2.45 pm and the Bank of Canada Rate Announcement at 3.00 pm.
Cash S&P 500
Treasury Yields have now fallen 15 basis points since Monday, leading to a 60 Handle rally in the S&P since Monday’s low print. The Fear & Greed Index closed at 79 last night which is Extreme Greed while the McClellan Oscillator closed at +135. The positive July seasonality is reflected in the S&P making it difficult to be short except when we see rips in the market. Yesterday’s late rally was a rip and I am now short at 4440. I will add to this position at 4460 with a higher 4471 ‘’’Closing Stop’’. The next major resistance is at 4510 where I will be a strong seller with no stop or T/P level if executed. Friday’s aggressive late sell programme has now been fully reversed as investors continue to be aggressive buyers on any dips. In my opinion all the good news is now priced into the S&P. Of course, we may trade higher but the risks in being a buyer at these levels have increased as I have written about in the past two weeks. Tops are a process making it difficult to be short. I will have a 4425 T/P level on my 4440 short position. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
EUR/USD
No Change. I am still flat the Euro as the market again fell shy of yesterday’s buy range. Ahead of CPI, I will continue to be a buyer on any dip lower to 1.0910/1.0980 with the same 1.0845 ‘’Closing Stop’’.
June Dollar Index
The Dollar is softer this morning. I am still long at 101.69 with the same 100.95 ‘’Closing Stop’’. The Dollar is oversold as we wait for the key CPI data at 1.30 pm. I will leave my 102.25 T/P level unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
I am still flat the DAX despite the market tagging on another 100 points since I marked prices yesterday morning. As I am now short both the S&P and NDX, I will now raise my DAX sell level to 16000/16100 with a higher 16205 ‘’Closing Stop’’. I will now raise my buy level to 15500/15600 with a higher 15495 ‘’Closing Stop’’.
Cash FTSE
The FTSE continues to trade in narrow ranges as the market again underperformed the other main Indexes. I am still flat. Today, I will leave my 7170/7240 buy level unchanged with the same 7095 ‘’Closing Stop’’. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
The Dow has soared over the past 48 hours as the 50-Day Moving Average has again held. The Dow is now trading 650 points higher from where I marked prices on Monday morning. Thankfully we have had no sell level in the Dow which is the right call given how the Dow has underperformed the other main U.S. Indexes this year. I will now raise my buy level to 33900/34100 with a higher 33795 ‘’Closing Stop’’.
Cash NASDAQ 100
Although the NDX is close to its 2023 high, the market has underperformed the Dow over the past week. Last night’s late rally saw the NDX hit my sell level at 15130. I am still short, and I will add to this position on any further move higher to 15280. Given the valuations and how overextended this market is I am comfortable in being short. I will have a T/P level at 15010 on this position. I will raise my stop to a fixed 15405. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
September BUND
I am still flat. The Bund hit a morning high at 131.55 before falling 60 points into the European Close. Ahead of U.S. CPI, I am not going to chase the market higher, leaving my aggressive 129.80/130.50 buy level unchanged with the same 129.25 ‘’Closing Stop’’. If triggered, I will have a T/P level at 131.15.
Gold Rolling Contract
Gold rallied to an intra-day high at 1938 before having a small sell-off into the close. I will now raise my buy level to 1902/1918 high a higher 1889 ‘’Closing Stop’’.
Silver Rolling Contract
Silver continues to trade just above 23.00 in narrow ranges. I am still long from two weeks ago at 23.63 with the same 24.20 T/P level. I still have no stop on this position. In my opinion, Silver is grossly undervalued. If this changes I will be back with a new update for my Platinum Members.
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