U.S. Equity Markets reversed earlier losses to close higher led by the NASDAQ which ended Tuesday with a 1% gain and a new closing all-time high, as all sectors, aside from Energy and Health, saw gains with Consumer Discretionary sitting atop of the pile, buoyed by Tesla (TSLA) (+10.2%) Q2 deliveries slightly surpassing expectations. During the day, a dovish reaction was seen across markets, Stocks/Treasuries upside and Dollar downside, in response to Fed Chair Powell who acknowledged that the disinflation trend shows signs of resuming, and they have made quite a bit of progress on inflation and are getting back on the disinflationary path. As such, it pushed T-Notes and the Dollar Index to session highs and lows, respectively, of 109-19+ and 105.71. However, the move reversed slightly after the hotter-than-expected JOLTS report as the headline came in above expectations with a slight increase in the vacancy rate while the quits rate was maintained. Nonetheless, as the dust settled, US Indices resumed to the upside to close at highs while the Dollar settled at lows. Back to the Fed, 2025 voter Goolsbee in a CNBC interview, said that as inflation comes down, policy gets tighter, and thinks they should tighten by choice, not by default. Moreover, Goolsbee does not buy that the last mile of inflation could take longer. As always attention was on the Japanese Yen, and the cross continued to make fresh multi-decade highs of 161.75, with traders awaiting any possible commentary from Japan overnight, with much attention on intervention speech. The 165 mark is being touted by many as a potential entry point for intervention. Elsewhere, the crude complex reversed the initial gains seen, and settled at lows, as Hurricane Beryl fears seemingly subsided. Looking ahead, there are FOMC Minutes and a deluge of data on Wednesday (ADP, initial jobless claims, challenger layoffs, ISM Services, and factory orders), with some brought forward on account of US Independence Day. Fed Chair Powell had a dovish tone at Sintra where he stated the disinflation trend shows signs of resuming, and that they are getting back on the disinflationary path. Powell said they have made quite a bit of progress on inflation noting the data represents significant progress. Powell has acknowledged significant progress before when referring to the overall progress since the inflation peaks, but his remarks around disinflation were new, something he did not touch on in the June press conference. Meanwhile, Powell repeated however that they need to be more confident before reducing policy rates, and that they need to see more data like what they have been seeing recently. He also repeated that if the labour market unexpectedly weakened, the Fed would react. He acknowledged the Fed has the ability to take their time and get it right, repeating the risks are becoming much more balanced and the Fed is aware of going too soon and too late. Powell suggested that inflation may get back to 2% in late 2025 (current Fed median pencils in 2.3%) or in 2026 (Fed median 2.0%). Ahead of NFP on Friday, Fed Chair Powell said the labour market is cooling off, and that wage increases are moving back down towards more sustainable levels. Meanwhile, Fed Member Goolsbee in a CNBC interview, said that as inflation comes down, policy gets tighter, and thinks they should tighten by choice, not by default. Moreover, Goolsbee sees some warning signs from the real economy, but he does not buy that the last mile of inflation could take longer. Further on inflation, he said if the Fed were using the measures of housing inflation that they use in Europe, the US would be at 2% already. Lastly, the Chicago Fed President still thinks a soft landing is possible and only wants to stay this restrictive for as long as you have to. Elsewhere, Oil closed 0.68% lower while Gold again closed flat.
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For anyone following my Platinum Service it made 178 points yesterday and is now ahead by 333 points for July after closing June with a gain of 2074 points, 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 to 4 updated emails throughout the trading day to demonstrate this value, a 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 0.62% higher at a price of 5509.
The Dow Jones Industrial Average closed 162 points higher for a 0.41% gain at a price of 39,331.
The NASDAQ 100 closed 1.01% higher at a price of 20,011.
The Stoxx Europe 600 Index closed 0.42% lower.
Yesterday, the MSCI Asia Pacific closed 0.2% higher.
Yesterday, the Nikkei closed 1.12% higher at a price of 40,074.
Currencies
The Bloomberg Dollar Spot Index closed 0.15% lower.
The Euro closed 0.1% higher at $1.0746.
The British Pound closed 0.2% higher at 1.2685.
The Japanese Yen rose 0.1% closing at $161.35.
Bonds
Germany’s 10-year yield closed 1 basis points lower 2.59%.
Britain’s 10-year yield closed 3 basis points lower at 4.25%.
U.S.10 Year Treasury closed 4 basis points lower at 4.43%.
Commodities
West Texas Intermediate crude closed 0.68% lower at $82.81 a barrel.
Gold closed 0.1% higher at $2329 an ounce.
This morning on the Economic Front we have German, Euro-Zone and U.K Services PMI at 8.55 am, 9.00 am and 9.30 am respectively. This is followed by Euro-Zone PPI 10.00 am. Next, we have a speech from both Fed Member Williams and ECB Member Lane at 11.30 am. At 1.15 pm we have U.S. ADP Employment Change, followed by Weekly Jobless Claims and the Trade Balance at 1.30 pm. Next, we have Services PMI at 2.45 pm, followed by ISM Services PMI and Factory Orders at 3.00 pm. Finally, we have the FOMC Minutes at 7.00 pm.
Cash S&P 500
Given how overbought the S&P is trading against a backdrop of increasing political uncertainty across the globe, my fear is that the market could drop at any moment. Consumer sentiment is weak while economic growth is slowing hard as well. I must disagree with Fed Chair Powell about the disinflationary environment in the U.S especially as Oil has rallied nearly 20% in the past few weeks. After the S&P hit my 5446-buy level we rallied to my 5457 revised T/P level. Subsequently on the back of the dovish Powell the S&P surged to a late high at 5511. This move higher saw the S&P close at a new all-time high at 5509. I am now short at 5501. I will add to this position at 5521 with a now higher 5531 ‘’Closing Stop’’. I am only short in small size as indicated in yesterday’s Daily Commentary. I will now raise my T/P level on this position to 5490. Remember the Cash Equity Markets in the U.S. closes at 6.00 pm this evening before re-opening at 2.30 pm on Friday. I no longer want to be long the S&P at this time.
EUR/USD
I am still flat as the Euro never came close to yesterday’s buy range. Ahead of today’s key U.S. data and FOMC Minutes, I will not chase the Euro higher, preferring to only be a buyer on any dip lower to 1.0620/1.0690 with the same 1.0555 ‘’Closing Stop’’. I still do not want to be short the Euro at this time. If I am taken long, I will have a T/P level at 1.0730.
Dollar Index
The Dollar traded in a narrow range which is no surprise given most traders are on vacation for the July 4th holiday. The Dollar has resistance from 106.00/106.60. I will now lower my sell level to this area with a now lower 107.15 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 105.60.
Cash DAX
The DAX got hit hard yesterday morning, falling over 300 points from where I marked prices 24 hours ago. This move lower saw the DAX traded the whole of my buy range for a 18090 average buy level. The market subsequently rallied 100 points into the New York close. I do not like the price action of the European Indices and I exited this long position too early at 18095 and I am now flat. I am also afraid to be short the DAX given the continued buy the dip mentality. For this reason, I will stay flat the DAX. If this view changes I will be back with a new update for my Platinum Members.
Cash FTSE
Ahead of the U.K Elections tomorrow the FTSE has traded in narrow ranges almost every day. Looking at the Daily chart I do wonder if the market is setting itself up for a strong rally. I am seeing a potential bull flag with huge support below in the 7900/8100 area. In this range we have the 2023 highs, the 100 Day Moving Average and close to the .382 fin retracement. Yesterday the FTSE hit my buy level at 8120. I am going to hold onto this position with no T/P level for now. I will add to this trade on any spike lower to 8020. I will also have no stop on this position as I take a punt on the outcome of the Elections given that no matter what the result, the market is already priced in all the bad news. If this view changes, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
Unfortunately, the Dow just missed yesterday’s buy range before rallying 350 points off its morning low and I am still flat. I will now raise my buy level to 38850/39100 with a higher 38695 ‘’Closing Stop’’.
Cash NASDAQ 100
My NDX plan worked well as the market sold off to my 19680-buy level before rallying to close over 20,000. Unfortunately, I covered this long position too early at my revised 19743 T/P level and I am now flat. The NDX has short-term support from 19750/19900 where I will again be a buyer with a higher 19635 ‘’Closing Stop’’. Despite how overbought the NDX is at this time, I still do not want to be short the market. If this view changes I will be back with a new update for my Platinum Members.
September BUND
Following Monday’s aggressive move lower, the Bund traded in a narrow range yesterday and I am still flat. The Bund is now oversold. We have further short-term support from 129.20/130.00 where I will continue to be a buyer with the same 128.55 ‘’Closing Stop’’. If triggered, I will have a T/P level at 130.60.
Gold Rolling Contract
No Change: I do not have a strong edge in Gold at this time preferring to only be a buyer on any dip lower to 2269/2285 with the same 2255 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2302.
Silver Rolling Contract
I am still flat as Silver traded in a narrow range without ever coming near Monday’s buy range. I will not chase the market higher, continuing to be a buyer on any dip lower to 28.10/28.90 with the same 27.55 ‘’Closing Stop’’.
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