U.S. Equity Markets closed lower yesterday led by the 0.75% fall in the NASDAQ 100 following the Apple news story out of China. The escalating tensions between China and Western nations continues to play out within the technology sector. China is now implementing a ban on the use of iPhones within sensitive government agencies. This move aligns with the broader trend of both China and the United States distancing themselves from the reliance on foreign technology in critical government sectors. Beijing is expected to extend this policy to encompass all state-owned enterprises. This significant decision potentially poses a substantial threat to Apple (AAPL), given that the Chinese market constitutes approximately 20% of its total revenue. U.S. Equity Markets are concerned that the service sector gained unexpected momentum in August, posting its highest reading since February of this year. The Institute for Supply Management reported a non-manufacturing PMI of 54.5, up from July’s reading of 52.7. The recent uptick in the service industry surprised economists, who had expected August’s reading to decrease to 52.5. The higher-than-expected reading highlights a pickup in new orders as well as businesses having to pay higher input prices – which indicates ongoing inflation pressures. While there have been signs of cooling in areas such as monthly job growth, the sector’s strong performance may give the Fed reason to be cautious in its next policy decision. The most recent edition of the Federal Reserve’s Beige Book, which gathers insights from regional business contacts, reveals a slowdown in the broader economy and job market during July and August. The report highlights that pricing pressures, especially in wage growth and production, have begun to ease slightly, although they are still on an upward trajectory. Additionally, several districts have expressed concerns about consumers showing signs of reduced resilience compared to the past few years. This latest report adds further weight to the upcoming interest rate decision by the Fed later this month. Many experts are now considering the possibility of a rate pause being on the horizon. The U.S. economy’s resilience so far this year has led many forecasters to believe the Federal Reserve will significantly increase its 2023 growth projections. Some expectations call for growth domestic product (“GDP”) growth of roughly 2% – doubling the central bank’s most recent expectation – thanks to strong consumer spending and residential investments. An unofficial estimate from the Atlanta Fed projects an annualised GDP growth rate as high as 5.6% in the third quarter. However, due to rising gas prices, the resumption of student-loan payments, and a potential government shutdown, forecasters anticipate a slowdown in the fourth quarter. The Fed is expected to leave interest rates unchanged at its September meeting, but strong growth figures could lead policymakers to rethink the easing they had planned for next year. Lockheed Martin (LMT) is facing delays on the highly anticipated TR-3 model of its F-35 jet due to persistent testing issues. The new jet’s delivery was set for this December but has since been postponed until at least April 2024. According to the U.S. Defence Department, the contractor is expected to deliver an average of nine TR-3 jets per month, with the potential for 56 additional deliveries by July 2024. However, due to software complications, these jets are currently sitting in storage awaiting developments. As a result, the Pentagon has decided to withhold the final 10% of its overall payment for the jets, totalling $7 million per jet. The news sent Lockheed’s stock down more than 4% during midday trading. European Markets closed lower. Despite the aggressive in U.S. Tech stocks, European Markets barely moved, closing lower by just 0.16%. In Asia, China’s share of U.S. goods imports fell to 14.6% in the 12 months through July, reaching its lowest level since 2006. For comparison, the number stood at 21.8% just five years ago. Government initiatives and domestic vulnerabilities exposed by the pandemic have led U.S. companies to reconsider their reliance on China and restructure their supply chains. While China remains a significant trading partner for the U.S., the shift in global trade has led to a rebalancing of import sources. For instance, countries such as Mexico and Vietnam have seen increased Chinese exports and direct foreign investment. Elsewhere, Oil
To mark my 2875th 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 126 points yesterday and is now down by 111 points for September, after finishing August with 1485 points gain 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 0.32% lower at a price of 4452.
The Dow Jones Industrial Average closed 57 points higher for a 0.17% gain at a price of 34,500.
The NASDAQ 100 closed 0.73% lower at a price of 15,258.
The Stoxx Europe 600 Index closed 0.16% lower.
This morning, the MSCI Asia Pacific closed 0.6% higher.
This morning, the Nikkei closed 1.16% lower at a price of 32,606.
Currencies
The Bloomberg Dollar Spot Index closed 0.20% higher.
The Euro closed 0.1% lower at $1.0710.
The British Pound closed 0.2% lower at 124.74.
The Japanese Yen rose 0.3% closing at $147.08.
Bonds
Germany’s 10-year yield closed 1 basis points lower at 2.60%.
Britain’s 10-year yield closed 9 basis points lower at 4.44%.
U.S.10 Year Treasury closed 3 basis points lower at 4.27%.
Commodities
West Texas Intermediate crude closed 0.3% higher at $87.54 a barrel.
Gold closed 0.3% lower at $1916.10 an ounce.
This morning on the Economic Front we already had the release of German August Final CPI which came in at 6.1% versus 6.1% Y/Y expected. Next, we have U.S. Wholesale Inventories at 3.00 pm. Finally, we have Consumer Credit at 8.00 pm.
Cash S&P 500
Fort the second consecutive trading session the S&P has bounced off the now critical 4440 support level. For Bears to gain further momentum this level needs to break and close below. For Bulls to regain control at the very minimum the S&P needs to break and close over its 50 Day Moving Average which comes in at 4476 this morning. As I go to press the NDX is trading back its 50-Day Moving Average which is positive. I am still long the S&P from Wednesday at an average rate of 4479. When the Dow hit my T/P level yesterday afternoon, I emailed my Platinum Members to lower their Closing Stop on the S&P to 4449. It will be interesting to see if the VIX gets crushed today as has been the team on a Friday for the past number of months. The VIX closed just below its 50 Day Moving Average (14.80) at a price of 14.40 last night so from a technical perspective a VIX crush today would make sense. I will now lower my T/P level on my long S&P position to 4485 while leaving my 4449 ‘’Closing Stop’’ unchanged. If this view changes I will be back with a new update for my Platinum Members.
EUR/USD
No Change. The Euro traded in a narrow range yesterday and I am still flat. The Euro has support from 1.0600/1.0670 where I will be an aggressive buyer with a 1.0535 ‘’Closing Stop’’. The Euro has resistance at its 200 Day Moving Average (1.0780) I will be a small seller from 1.0780/1.0840 with a tight 1.0875 ‘’Closing Stop’’.
September Dollar Index
I am still short the Dollar at 104.70. I will continue to look to add to this position at 105.30 with the same 105.85 ‘’Closing Stop’’. I will now raise my T/P level to 104.30. If any of the above levels are hit, I will be back with a new update for my Platinum Members
Cash DAX
No matter what the news the DAX continues to hold in. Yesterday it was Industrial Production coming in much weaker than expected on top of Wednesday’s awful Factory Orders. No matter the DAX continues to find buyers on dips. With European Market so far ignoring the Apple news it gives me confidence that this week’s American sell-off is just a blip. I will now raise my DAX buy level to 15580/15660 with a higher 15495 ‘’Closing Stop’’.
Cash FTSE
No Change. I am still flat. The FTSE has short-term support from 7280/7340 where I will be a buyer with a 7235 ‘’Closing Stop’’. Given how strong the FTSE was yesterday and the fact that Gilt Yields fell 9 basis points, I will now raise my sell level to 7510/7580 with a higher 7635 ‘’Closing Stop’’.
Dow Rolling Contract
Despite the sell-off in Tech stocks the Dow outperformed. The Dow rallied to my 34556 T/P level on yesterday’s 34430 long position and I am now flat. The Dow has support from 34100/34350 where I will again be a buyer with a lower 33995 ‘’Closing Stop’’.
Cash NASDAQ 100
The news from China that it is banning iPhones within sensitive Government Agencies saw Apple shares fall a further 3% yesterday. However, as we have seen in the past all sell-offs in Apple are bought despite the waning EPS figures. The sell-off in Apple saw my second buy level in the NDX at 15220 triggered. I am now long at an average rate of 15285 with a now lower 15360 T/P level. I will leave my 15095 ‘’Closing Stop’’ unchanged. If these views change, I will be back with a new update for my Platinum Members.
December BUND
I am still flat as the Bund had a small rally yesterday. I will now raise my buy level to 129.80/130.60 with a higher 129.15 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 131.20.
Gold Rolling Contract
The volatility in Gold over the past few months has been dreadful, making it hard to make points. I am still flat, refusing to chase Gold higher given the large selling on any move above 1960. I will continue to be a buyer from 1890/1905 with the same 1883 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. I am still long at an average rate of 24.05 with the same 22.95 ‘’Closing Stop’’. I will now lower my T/P level to 24.40. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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