Although another late rally saw U.S. Equity Markets closed higher yesterday, a downgrade overnight by Fitch on the U.S. Credit Rating sees Futures Markets lower by over 1% as I go to press. The recent shift in tone across Wall Street is evident in the updated target on the S&P 500 index by Oppenheimer Asset Management’s Chief Investment Strategist, John Stoltzfus. He now projects the index to reach 4,900 by the end of the year, indicating a potential 7% gain. This optimistic outlook contradicts the bearish predictions made by prominent figures like Morgan Stanley’s Michael Wilson, JPMorgan Chase’s Marko Kolanovic, and Bank of America’s Michael Hartnett. Even these experts were caught off guard by the resilience of the U.S. economy and the surge in the AI-driven tech sector. But it is important to note that some still maintain scepticism that this year’s rally will withstand downward earnings pressure by year-end. Mild inflation and diminishing wage pressures has led Wall Street economists to believe that the Federal Reserve will pause on another interest-rate hike at its September meeting. Policymakers are waiting for incoming data to guide their decision, and with further expected tame inflation readings and looming headwinds such as the resumption of student-loan payments, economists believe there is little urgency to raise rates next month. Market expectations for a rate hike in September are currently around one in five odds. European Markets got hit hard yesterday despite Euro-Zone Inflation declining in July providing some relief for the European Central Bank (“ECB”). Consumer prices grew by 5.3%, down from 5.5% in June, continuing the downward trend seen since over the last year. However, pricing pressures are still far from the ECB’s 2% target which could pose an interesting decision for policymakers moving forward. In Asia, China factory activity declined for the four consecutive month, although at a slower pace compared to previous months. The official manufacturing purchasing managers’ index (“PMI”) recorded a reading of 49.3, slightly higher than June’s figure of 49.0. The continued contraction reflects weakened global and domestic demand. Despite China’s annualised economic growth of 6.3% in the second quarter, the country experienced a quarterly growth rate of only 0.8%, lower than the previous quarter. To stimulate the economy, the Chinese government has pledged to improve access to financing for businesses and boost business confidence through incremental measures. This morning in a speech from Bank of Japan Deputy Governor Uchida saying that Japan needs to maintain an easy policy. Elsewhere, Oil fell 0.14% while Gold closed 1.1% lower following heavy selling.
To mark my 2850th 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 210 points yesterday on the first session for August following a small gain of 285 points gain in 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 0.27% lower at a price of 4576.
The Dow Jones Industrial Average closed 71 points higher for a 0.21% gain at a price of 35,630.
The NASDAQ 100 closed 0.25% lower at a price of 15,718.
The Stoxx Europe 600 Index closed 0.61% lower.
This morning, the MSCI Asia Pacific closed 1.1% lower.
This morning, the Nikkei closed 2.40% lower at a price of 32,674.
Currencies
The Bloomberg Dollar Spot Index closed 0.3% higher.
The Euro closed 0.1% lower at $1.0980.
The British Pound closed 0.3% lower at 1.2774.
The Japanese Yen fell 0.6% closing at $143.36.
Bonds
Germany’s 10-year yield closed 4 basis points higher at 2.53%.
Britain’s 10-year yield closed 9 basis points higher at 4.40%.
U.S.10 Year Treasury closed 9 basis points higher at 4.05%
Commodities
West Texas Intermediate crude closed 0.14% lower at $81.66 a barrel.
Gold closed 1.1% lower at $1944.10 an ounce.
This morning on the Economic Front we have no data of note from either the Euro-Zone or the U.K. At 12.00 pm we have U.S. Mortgage Applications. Finally, at 1.15 pm we have the ADP Employment Change.
Cash S&P 500
We have had no corrective activity in the S&P and NDX since the Fed intervened to save the banking system. That was almost five months ago and is not normal. There is no debt ceiling allowing the Treasury to spend a further $1.85 billion in the second half of 2023. This means that there is no sign of Fiscal Stimulus stopping anytime soon. This morning’s down grade by Fitch may mean nothing (as nothing has mattered since liquidity was pumped into the system) or could be the start of the long overdue correction as indicated by all the ‘’Technical Signals’’ that I follow. Either way tomorrow’s Apple results will even have more importance ahead of Non-Farm Payrolls on Friday. This morning the S&P finally hit my 4560 T/P level on my 4574 average short position and I am now flat. The S&P has resistance from 4565/4585 where I will again be a seller with a lower 4601 ‘’Closing Stop’’.
EUR/USD
Ni Change. I am still long from Thursday at an average rate of 1.1030. I will leave my T/P level unchanged at 1.1070 with the same 1.0935 ‘’Closing Stop’’. If any of the above levels are hit, I will be back with anew update for my Platinum Members.
June Dollar Index
The Dollar traded in a narrow range yesterday and I am still flat. This morning the Dollar is trading slightly higher at 102.20. We have support from 100.80/101.50. I will move my buy level higher to this range with the same 100.15 tight ‘’Closing Stop’’.
Cash DAX
I was beginning to doubt whether the DAX would ever fall again given the severely overbought technical signals coupled with an ever-weakening economy. The DAX is five hundred points lower from where we were on Monday. This is the second 500-point sell-off in the DAX in the past 10 days. Although the first sell-off was completely reversed I am not sure if this one will be. The DAX has resistance from 16280/16360. I will lower my sell range to this area where I will be a small seller with a 16455 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 16200.
Cash FTSE
The FTSE got hit hard overnight trading at 7600 this morning. I am now long at 7600. I will add to this position at 7540 with a now lower 7495 ‘’Closing Stop’’. I will have a T/P level on this position at 7645. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Dow Rolling Contract
The Dow rallied to my second sell level at 35640 for a now 35493 average short position. I will now raise my T/P level to 35340 while leaving my 35805 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
The NDX closed lower yesterday following another quiet session. It looks like the market is on hold until we get Apple’s earnings after the close tomorrow night. Looking at the Apple chart, it has been straight up since last December with no meaningful pullback. Despite Apple making new highs last month the MACD was negative for all of July. This is not a healthy market with new highs coming on negative divergence. We saw a similar pattern in 2021 before the stock got hit for 15%. I certainly would not be buying the market at these prices. Overnight the NDX traded lower to my 15605 T/P level on my latest 15675 average short position and I am now flat. It is looking more and more likely that the recent 15940 high print is one of significance. Today, I will again be a seller of the NDX from 15680/15830 with a tight 15965 ‘’Closing Stop’’.
September BUND
The aggressive 1.26% fall in the DAX yesterday saw the Bund trade lower to my 132.20 buy level. I am still long. I will continue to look to add to this position on any further move lower to 131.50 with the 130.75 ‘’Closing Stop’’. I will now lower my T/P level to 132.70.
Gold Rolling Contract
After meandering for most of the past week Gold fell 1% yesterday. I am conscious that almost everyone is long Gold while savvy traders continue to sell rallies in the high 1900s. Today, I will now lower my buy level slightly to 1913/1928 with a lower 1903 ‘’Closing Stop’’.
Silver Rolling Contract
Silver closed 1.5% lower yesterday, reversing most of Monday’s gains. I am still long from last week at a rate of 24.60. I will continue to look to add to this position at 23.80. My T/P level remains unchanged at 25.30. I have no stop on this position and if this view changes I will be back with a new update for my Platinum Members
Recent Comments