The risk tone was cautious, with equity futures trading negative in premarket, before paring losses as US traders arrived. Cash equities opened with a soft bias, and after some fleeting choppiness after the JOLTs jobs data, resumed to the downside as growth concerns continue to weigh in traders’ minds. The JOLTs data saw a cooling of headline job openings, an unchanged quits rate, while the vacancy rate fell. That gave a bid to Treasuries, with the rally being led by the belly as the curve bull flattened. The U.S. Dollar softened, and safe-haven FX came into demand, although EMFX was unable to take advantage of the USD’s weakness, both due to risk-off sentiment as well as some idiosyncratic factors (see FX wrap, below). Equity futures went flat in later trading after Tesla (TSLA) CEO Musk detailed purchases of Nvidia (NVDA) chips, which saw the semiconductor company rally, lifting Indices with it. But that foray into positive territory proved fleeting, and equities went back to flat levels shortly after. Meanwhile, Crude futures continued to fall on Tuesday, with traders continuing to cite the OPEC+ policy announcement from the weekend, along with demand concerns due to softening US economic momentum (JOLTs today, ISM on Monday, lower GDP trackers). Ahead, there are plenty of macro catalysts for traders to sink their teeth into; Wednesday sees the release of ADP jobs data, ISM Services data, as well as a Bank of Canada rate decision; Thursday sees an ECB rate decision, and on Friday, the Non-Farm Payrolls data is due. Headline Job Openings pared to a rate of 8.059 million in April (vs an expected 8.35 million), the lowest level since February 2021 and below the consensus range (8.1 to 8.355 million); the prior months’ data was revised down to 8.355 million from an initially reported 8.488 million. The quits rate was unchanged at 2.2% after revisions to the prior data, while the overall vacancy rate fell to 4.8% from a revised 5.0%. Despite a soft report, Oxford Economics highlights that layoffs remain low, so net job growth should continue to be positive. Meanwhile, OxEco add that the quits rate is at a level consistent with an ongoing moderation in wage growth. The desk adds that the Fed will welcome signs of cooler labour market conditions, but the data does not change their view that the Fed will be happy to keep rates at current levels until September. In wake of the release, implied pricing for the trajectory of Fed rate cuts this year moved dovishly, although he reaction proved to be fleeting; after the JOLTs data, as well as this week’s soft ISM manufacturing report, money markets are discounting 45bps of rate cuts through the end of the year, with the first fully priced rate cut seen in November (before this week’s data, markets were first fully pricing a December cut). Meanwhile, The Bank of Canada is expected to cut rates by 25bps at its meeting this afternoon, taking its key rate to 4.75%. The majority of analysts expect this outcome, with 22 of 29 surveyed by Reuters looking for a cut, but the remaining seven expect rates to be left on hold at 5.00%. Recent data has seen inflation fall within the BoC’s target band, while growth data has disappointed. Money markets currently assign an 80% probability of a 25bp rate cut in June, with those odds being priced since the dismal GDP data released last week. Elsewhere, Oil closed at four-month lows with a further fall of 1.25%, while Gold ended Tuesday with a 0.9% fall.
To mark my 3000th 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 384 points yesterday and is now ahead by 554 points for June, having made 1843 points in May. The Platinum Service made 4010 points in April after ending March with a gain of 2113 points. February closed with a gain of 1606 points, after closing January with a gain of 3675 points. December saw a gain of 1890 points after finishing November with a gain of 1734 points. October ended with a gain of 3184 points, after closing September with a small gain of 228 points, after finishing August with a gain of 1485 points, 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 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 0.15% higher at a price of 5291.
The Dow Jones Industrial Average closed 140 points higher for a 0.36% gain at a price of 38,711.
The NASDAQ 100 closed 0.29% higher at a price of 18,654.
The Stoxx Europe 600 Index closed 0.49% lower.
This Morning, the MSCI Asia Pacific closed 0.4% higher.
This Morning, the Nikkei closed 0.89% lower at a price of 38,490.
Currencies
The Bloomberg Dollar Spot Index closed 0.02% higher.
The Euro closed 0.1% lower at $1.0877.
The British Pound closed 0.2% lower at 1.2765.
The Japanese Yen rose 0.7% closing at $154.90.
Bonds
Germany’s 10-year yield closed 5 basis points lower at 2.54%.
Britain’s 10-year yield closed 6 basis points lower at 4.18%.
U.S.10 Year Treasury closed 8 basis points lower at 4.33%.
Commodities
West Texas Intermediate crude closed 1.31% lower at $73.25 a barrel.
Gold closed 0.9% lower at $2327.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone and U.K. Composite PMI at 8.55 am, 9.00 am and 9.30 am respectively. Next, we have Euro-Zone Producer Prices at 10.00 am, followed by U.S. MBA Mortgage Applications at 12.00 pm. This is followed by the ADP Employment Change at 1.15 pm and Composite PMI at 2.45 pm. Finally, at 3.00 pm we have ISM PMI and the latest Bank of Canada Rate Announcement.
Cash S&P 500
Following a 5.7% fall in the Mexican Stock Market on Monday, India followed suit with a 7% fall yesterday. This was the worst day for the Nifty Index since the Global Pandemic started. The S&P fell hard on this news but again buyers stepped in helping the S&P to rally over 40 Handles into the close. The S&P is now less than 1% from May’s all-time highs at 5341.The morning sell-off saw several of my calls being hit. This included the S&P which traded the whole of my buy range for a 5256 average long position. As I want to continue to bank points when available especially at the start of a month, I covered this long position at my revised 5265 T/P level, and I am still flat. However, I do not know how long the buy the dip strategy will continue to pay dividends as things are now getting uncomfortable. Three weeks ago, the Atlanta Fed put out a 4.2% Q2 GDP forecast, on Monday it had dropped to 1.8%. Q1 GDP came in at a meagre 1.6%, implying there is definitely slowing going on as the consumer seems tapped out. Meanwhile, Retail Sales are dropping as consumers continue to be confronted with the worst housing market ever. Suddenly the Fed finds itself in a nasty spot. Inflation has not dropped as much as they wanted and at the same time the economy is slowing down hard. The longer the Fed waits to cut rates the higher the risk something blows up. It is a tricky period for the Fed and I do not think it is an accident that they started tapering QT this week. They are preparing for a rate cut the only question is the ‘’WHEN’’. Friday’s NFP data is even more important now. This morning the S&P is trading higher at 5300. We have support from 5268/5284 where I will be a small buyer with a tight 5255 ‘’Closing Stop’’. Despite how close we are to new all-time highs I still do not want to be short the S&P at this time. If this view changes I will be back with a new update for my Platinum Members.
EUR/USD
The Euro sold off to my 1.0865 buy level. I am still long with a now lower 1.0920 T/P level. I will continue to look to add to this position on any further move lower to 1.0805 with the same tight 1.0765 ‘’Closing Stop’’. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
No Change: I am still long the Dollar from early yesterday morning at 104.10 with the same 104.60 T/P level. I will add to this position on any further move lower to 103.40 while leaving my ‘’Closing Stop’’ unchanged at a price of 102.95. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
My DAX plan worked well as shortly after I posted yesterday morning, the DAX sold off to my 18390-buy level. The DAX had a quick 100-point rally enabling me to cover this position at my revised 18446 T/P level and I am now flat. This morning the DAX is trading higher at 18520. I have no interest in chasing the DAX higher, preferring to buy dips. We have support from 18280/18380 where I will again be a buyer with a lower 18195 ‘’Closing Stop’’. I still do not want to be short the DAX despite the heaviness of the market. If this view changes, I will be back with a new update for my Platinum Members.
Cash FTSE
The FTSE just missed yesterday’s buy range before having a small rally into the close. I am still flat. This morning, the FTSE is trading higher at 8280. I will now raise my buy level to 8170/8240 with a higher 8115 ‘’Closing Stop’’. Despite how overbought the FTSE is trading, I still do not want to be short the FTSE at this time.
Dow Rolling Contract
My Dow plan worked well as the idea of buying every dip in this market continues to pay dividends. After the Dow hit my 38390-buy level we rallied over 400 points. As I want to continue to bank points when available, I exited this long position at my revised 38470 T/P level and I am still flat. The Dow has short-term support from 38350/38600 where I will again be a buyer with a higher 38095 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 38780. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
It took a while but finally the afternoon rebound in Equity Markets saw the NDX hit my 18690-sell level. Subsequently, the NDX sold off to my revised 18612 T/P level as emailed to my Platinum Members and I am now flat. Today, I will again be a seller on any further rally to 18740/18890 while leaving my 19005 ‘’Closing Stop’’ unchanged. If I am taken short, I will have a T/P level at 18630. I still do not want to be long the NDX at this time. If this view changes, I will be back with a new update for my Platinum Members.
March BUND
I am still flat as the Bund never came close to yesterday’s buy range. I will now raise my buy level to 129.80/130.60 with a higher 129.15 ‘’Closing Stop’’.
Gold Rolling Contract
My Gold plan worked well as the market sold off to my 2327 buy level before rallying to my revised 2334 T/P level and I am now flat. Gold has support below from 2297/2313 where I will again be a buyer with a lower 2285 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2323.
Silver Rolling Contract
Silver followed Gold lower, hitting my 29.75 buy level. I am still long with the same 30.50 T/P level. I will continue to look to add to this position at 29.05 while leaving my 28.35 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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