U.S. Equity Markets reversed morning losses to close lower across the board. A combination of a stronger Dollar and high Bond Yields continue to weigh on Equity Markets. Despite pressurised Equity Markets, the VIX again closed lower by 1%. Macy’s (M) quarterly results surpassed sales expectations, however, the company decided to maintain the modest full-year guidance they introduced in June. The quarter saw net sales reach $5.13 billion, a decrease of $5.6 billion reported for the same quarter a year prior. This high-end retail giant has experienced significant setbacks as consumers are progressively opting for less expensive options due to ongoing pricing pressures. This trend is forecasted to persist through the end of the year, leading to an anticipated annual sales drop of between 6% and 7.5% compared to the previous fiscal year. Lowe’s (LOW) topped earnings expectations for the second quarter. However, the company failed to meet sales projections due to a persistent decline in consumer demand for home improvement projects. Despite these challenges, Lowe’s maintained its full-year sales forecast of around $87 billion to $89 billion, which represents a 2% to 4% dip from the previous year. The ongoing spending trends pose considerable headwinds for the home improvement sector, yet the robust demand for new homes offers a silver lining for the industry as we approach the next fiscal year. Dick’s Sporting Goods’ (DKS) dismal second-quarter results present a stark contrast to the recent performances of Macy’s and Lowe’s. The sporting goods retailer reported a significant miss on both earnings and revenue expectations, with profits tumbling by 23%. The company’s net income for the quarter stood at $244 million, a sharp fall from the $318.5 million recorded in the same quarter of the previous year. Dick’s also lowered its earnings guidance for the full year, attributing this to a steep rise in retail theft incidents. The U.S. bond market has continued its sell-off, pushing 10-year yields to its highest level in 16 years. Yields have been driven higher due to anticipation that interest rates will remain elevated even after the Federal Reserve ends its rate hikes. The yield on 10-year inflation-protected Treasuries rose over 2%. The last time Treasury yields were this high was in 2009. Meanwhile, the yield on 10-year Treasuries without inflation protection rose to 4.35%, the highest level since 2007. Bond investors appear to be bracing for the possibility that interest rate cuts will not arrive early in 2024. European Markets closed higher. The German Producer Price Index (“PPI”) decreased in July for the first time since November 2020 – marking the sharpest decline since October 2009. With a 6% decline year-over-year, the drop surpassed analyst estimates of a 5.1% decline. Easing energy prices, which declined more than 19%, was the primary driver for the larger decline. A larger-than-expected decline in input costs for Europe’s largest economy could spell good news for a region that has struggled to curb high inflation. In Asia, China surprised markets and cut its one-year loan prime rate from 3.55% to 3.45%, while keeping the five-year rate the same. China’s modest change has generated speculation that it is attempting to stimulate its economy without adding extra downward pressure on the Yuan. China’s central bank has pledged to keep liquidity available and abide by its “precise and forceful” policy as they navigate current conditions. However, it seems as though currency stability and the impact on the Yuan are influencing the central bank’s monetary policy. Elsewhere, Oil fell 0.63% while Gold again traded in a narrow range, closing flat on the day.
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 lost 45 points yesterday and is now ahead by 1373 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 0.28% lower at a price of 4387.
The Dow Jones Industrial Average closed 174 points lower for a 0.51% loss at a price of 34,288.
The NASDAQ 100 closed 0.19% lower at a price of 14,908.
The Stoxx Europe 600 Index closed 0.68% higher.
Yesterday, the MSCI Asia Pacific closed 0.4% higher.
Yesterday, the Nikkei closed 0.92% higher at a price of 31,856.
Currencies
The Bloomberg Dollar Spot Index closed 0.2% higher.
The Euro closed 0.2% lower at $1.0865.
The British Pound closed 0.2% lower at 127.30.
The Japanese Yen rose 0.2% closing at $145.90.
Bonds
Germany’s 10-year yield closed 5 basis points lower at 2.65%.
Britain’s 10-year yield closed 8 basis points lower at 4.65%.
U.S.10 Year Treasury closed 2 basis points lower at 4.32%
Commodities
West Texas Intermediate crude closed 0.63% lower at $79.63 a barrel.
Gold closed 0.1% higher at $1896.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone, U.K. and U.S. S&P Global Manufacturing PMI at 8.30 am, 9.00 am, 9.30 am and 2.45 pm respectively. In between we have U.S. MBA Mortgage Applications at 12.00 pm. Finally, we have New Home Sales and Euro-Zone Consumer Confidence at 3.00 pm.
Cash S&P 500
A weak session for the S&P as the market could not hold onto its 8 MA or 5EMA as Bank Stocks led yesterday’s move down, closing lower by nearly 3%. The Bank Index is now sitting on critical support. The obvious question is whether Bears can break this trend. We did in March for a day before Treasury Secretary intervened and then it was all over for the Bears. Banks on the defensive is interesting ahead of Jackson Hole and Powell’s key speech on Friday. There is no doubt this level of global debt cannot sustain Treasury Yields north of 4%. I am still flat the S&P. As I am flying back to Dublin this evening and will have no access to markets I will now lower my S&P buy level to 4352/4367 with a lower 4339 ‘’Closing Stop’’. If triggered, I will have a T/P level at 4382. I still do not want to be short the S&P at this time.
EUR/USD
Despite the Euro again trading in a narrow range I was stopped out of my 1.0970 average long position at 1.0865 and I am still flat. The Euro is oversold and due a bounce. We have short-term support from 1.0750/1.0820 where I will be a strong buyer with a 1.0686 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 1.0910.
June Dollar Index
No Change. I am still flat as the Dollar again traded in a narrow range. I will continue to be a seller from 103.80/104.40 with the same 104.81 ‘’Closing Stop’’.
Cash DAX
The DAX surged off key support yesterday morning and I am still flat as my buy range was never threatened. The DAX hit a high at 15800 before falling 100 points into the New York close. I still do not like the price action in the DAX despite yesterday’s rally. I will only raise my buy range to 15430/15530 with a higher 15345 ‘’Closing Stop’’.
Cash FTSE
No Change. I am still flat. The FTSE traded in a narrow range, refusing to follow the European Indexes higher even though Gild Yields fell eight basis points. Just like the DAX above I will not chase the FTSE higher, leaving my 7150/7210 buy level unchanged with the same 7085 ‘’Closing Stop’’. Given how oversold the FTSE is trading I still have no interest in being short.
Dow Rolling Contract
The Dow again found resistance at its 50-Day Moving Average (34,650) falling 300 points off its morning high to close near the low of the day. I am still flat. I will now lower my buy level to 33900/34150 with a lower 33695 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 34370.
Cash NASDAQ 100
The NDX hit a morning high at 15065 before falling 150 points off this high into the close. All eyes are on the results from Nvidia which will help determine the next major move in tech stocks. With the NDX severely oversold against a background of positive divergences I will continue to hold my 15085 average long position with the same 15170 T/P level. As long as my tech signals are on a buy I will not be a seller of this market or have any stop. I am impressed with the fact that tech stocks were able to hold yesterday’s gains against a backup in 10 Year Treasury Yields to 4.35%. The bottom line is still the potential for a big rally despite the potential bear flag in both the NDX and S&P. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
September BUND
My latest 130.70 long Bund position worked well as the market rallied to my 131.30 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 129.90/130.60 with a lower 129.15 ‘’Closing Stop’’.
Gold Rolling Contract
Gold traded in a narrow range. We saw small selling on the morning break of 1900 before closing just below this key resistance level in New York. I am still flat and will not chase the market higher leaving 1862/1877 buy level unchanged with the same 1849 wider ‘’Closing Stop’’.
Silver Rolling Contract
No Change. The price of Silver moved in a narrow range over the past 24 hours, trading at 23.40 as I go to press. I am still long at an average rate of 24.20 with the same 24.70 T/P level. I will continue to have no stop on this position. If this view changes I will email my Platinum Members.
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