U.S. Equity Markets closed mostly flat yesterday following a trading session that saw plenty of two-way price action. After the close earnings results from Amazon saw the stock 8% higher while Apple earnings has their share price down 1%. Bond Yields continue to soar with the 10-Year Treasury hitting a high at 4.20%. Bill Ackman, the founder of Pershing Share Capital is taking significant positions betting on declines for 30-year U.S. Treasuries. He sees this as a hedge against the potential impact of higher long-term rates on stocks. Ackman believes that the increasing supply of Treasuries needed to fund the current budget deficit, future spending plans, and higher refinancing rates will create opportunities for profit. He considers this short position to be a “high probability” standalone play. U.S. Private Payrolls Surged in July behind an increase in hiring by small businesses. This latest data comes just days before the official government labour metrics are set to be released and suggests that the labour market remains resilient, potentially protecting the economy from a recession. The report also revealed a moderation in wage growth, which is favourable for the inflation outlook. These optimistic indicators, coupled with recent positive data on inflation and consumer spending, have raised hopes for a “soft landing” of the economy, aligning with the Federal Reserve’s projections. European Markets closed lower. Yesterday the Bank of England raised rates by 0.25%. This move brings the main borrowing cost for commercial banks to 5.25% – its highest level since February 2008. The decision was not unanimous, with some members calling for a more aggressive rate hike, but only one member fully dissented and called for a pause. The central bank acknowledged that recent data has been mixed but highlighted indicators such as wage growth that suggest inflationary pressures may be becoming more persistent. ECB Member Panetta emphasised the importance of maintaining interest rates at their peak level. He acknowledged that striking the right balance on monetary policy is becoming challenging as inflation moderates and economic risks move to the downside. Panetta echoed the sentiments of other ECB officials who highlighted the significance of persistence in steering the monetary-policy stance. This indicates a cautious approach by the ECB, considering both the level and duration of policy rates in light of the evolving economic outlook. Foxconn plans to invest $600 million in India. This investment includes $350 million for setting up an iPhone component facility, which is expected to generate 12,000 jobs. As the world’s largest contract manufacturer, Foxconn has been diversifying its production away from China due to disruptions caused by the COVID-19 pandemic and geopolitical tensions. This move not only showcases Foxconn’s confidence in India’s manufacturing capabilities but also signals its intention to spread its bets beyond China and explore new opportunities in the South Asian market. Elsewhere, Oil rose 2.63% while Gold close flat following a quiet trading session.
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 235 points yesterday and is now ahead by 675 points 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 0.25% lower at a price of 4501.
The Dow Jones Industrial Average closed 66 points lower for a 0.19% loss at a price of 35,215.
The NASDAQ 100 closed 0.11% lower at a price of 15,353.
The Stoxx Europe 600 Index closed 0.63% lower.
This morning, the MSCI Asia Pacific closed 0.4% lower.
This morning, the Nikkei closed 0.1% higher at a price of 32,192.
Currencies
The Bloomberg Dollar Spot Index closed 0.3% higher.
The Euro closed 0.1% lower at $1.0942.
The British Pound closed 0.1% lower at 1.2703.
The Japanese Yen rose 0.6% closing at $142.54.
Bonds
Germany’s 10-year yield closed 6 basis points higher at 2.57%.
Britain’s 10-year yield closed 5 basis points higher at 4.46%.
U.S.10 Year Treasury closed 10 basis points higher at 4.18%
Commodities
West Texas Intermediate crude closed 2.63% higher $81.57 a barrel.
Gold closed 0.1% lower at $1933.10 an ounce.
This morning on the Economic Front we already had the release of the German Factory Orders which came in at +7% versus –2% expected. Next, we have Euro-Zone Retail Sales at 10.00 am. Finally, we have U.S. Non-Farm Payrolls including Average Earnings and the Unemployment Rate at 1.30 pm.
Cash S&P 500
My S&P plan worked well as the market traded lower to my 4490-buy level with a 4486 low print before rallying to my 4508 T/P level and I am now flat. Better earnings from Amazon sees the S&P trading higher at 4522 this morning. One lesson that I have learnt from July is that it is much easier to be a buyer than a seller as it definitely carries less stress. Despite falling 2.7% over the past week the S&P is still severely overbought judging by all my technical signals that I follow. However, any move lower will not be in a straight line. We have NFP to negotiate this afternoon along with the VIX Friday crush. The S&P has support from 4480/4495 where I will be a buyer with a 4465 ‘’Closing Stop’’. The S&P has resistance from 4558/4578. I will continue to be a seller in this area with a tight 4595 ‘’Closing Stop’’.
EUR/USD
Ni Change. I am still long from last 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 again in a narrow range yesterday and I am still flat. This morning the Dollar is trading a touch lower at 102.45. The Dollar has resistance from 103.10/103.70 where I will continue to be a seller with the same 104.25 ‘’Closing Stop’’. We have support from 100.80/101.50. Ahead of Non-Farm Payrolls at 1.30 pm I will leave my buy level unchanged with the same 100.15 tight ‘’Closing Stop’’.
Cash DAX
Frustratingly the low for the DAX yesterday was 15805 – 25 points above my 15780-buy level. Subsequently, we saw a strong rally in the DAX, trading at 15950 this morning as I go to press. I will now raise my DAX buy level to 15730/15810 where I will be a strong buyer with a 15655 ‘’Closing Stop’’. I do not want to be short the DAX at this time especially on a Friday.
Cash FTSE
My FTSE plan worked well as the market traded lower to my 7450-buy level before rallying to my 7505 T/P level and I am now flat. Despite the Bank of England hiking Interest Rates for the 14 consecutive meeting, the FTSE is trading higher this morning at 7540. We have short-term support from 7410/7470 where I will be a strong buyer with a 7355 ‘’Closing Stop’’.
Dow Rolling Contract
I was unlucky with my Dow call yesterday as the market missed my 35100-buy level by 15 points before rallying over 200 points off yesterday’s low and I am still flat. Ahead of NFP, I am not going to chase the Dow higher given how overbought the market is trading. Remember, despite this week’s sell-off the Dow is still only 4% below all-time highs. We have short-term support from 34850/35100 where I will continue to be a buyer with the same 34695 tight ‘’Closing Stop’’. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
Better Amazon earnings sees the NDX trading 100 points higher from last night’s close. This rally is coming against a background of rising Bond Yields and a rising Dollar which so far have been ignored by the market. I am still flat the NDX as the market never came close to either my buy or sell levels. I will now raise my buy level to 15070/15220 with a higher 14895 ‘’tight Closing Stop’’. With the 50 Day MA coming in at 14980 I would expect any test of my buy area to be met by strong buying. As I am trying to take a break next week from trading, I will not chase the NDX lower leaving my 15680/15830 sell level unchanged with the same tight 15965 ‘’Closing Stop’’. If I am taking long, I will have a T/P level at 15370. If I am taking short, I will have a T/P level at 15540.
September BUND
This morning, the Bund opened in my buy range and I am now long at a price of 131.45. I will add to this position at 130.75 with a lower 129.95 ‘’Closing Stop’’. I will have a T/P level on this position at 131.95. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
I am still flat as Gold traded in a narrow range yesterday. Today, I will continue to be a buyer on any dip lower to 1903/1918 with the same 1889 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. I am still long at an average rate of 24.20 with the same 24.70 T/P level. I will have no stop on this position. If this view changes I will email my Platinum Members.
Finally, as next Monday is a Bank Holiday in Ireland I am taking the whole of the week off for a well needed break. Of course, I will continue to update my Platinum Members during the week depending on market conditions. My Daily Commentary will return on Monday August 14.
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