U.S. Equity Markets closed mixed on Tuesday. The S&P 500 again closed at a new all-time high while the small-cap Russell 2000 (-0.5%) was the underperformer. Sectors were mixed with Materials and Energy the laggards, as the former was weighed on by slight losses in Crude and Brent amid progress in Cairo hostage deal talks. Financials was the distinct outperformer, seemingly buoyed by banks who saw notable upside amid Chair Powell testifying, saying it is a strongly held view of the Fed board that bank regulators should seek additional feedback on their efforts to hike bank capital, a move that the banking industry has been pushing for. Elsewhere, Powell largely stuck to the script, repeating that more good data would strengthen the Fed’s confidence on inflation and that elevated inflation is not the only risk the Fed faces. Nonetheless, despite an initial dovish reaction to Chair Powell’s text release, it soon faded, and T-Notes were hit on the Chair’s testimony but were off lows as Europe left while the US 3 Year Auction was well received. The Dollar eked marginal gains, albeit in very thin ranges, with the Japanese Yen the G10 underperformer and the cross back above 161 and reaching a peak of 161.51. Precious metals (XAU, XAG) were mildly divergent, as spot silver was flat and spot gold saw slight gains and pared some of the extensive losses seen on Monday. Powell noted that labour market conditions have cooled considerably, and the labour market is fully back in balance now. In his Testimony Fed Chair Powell did not give any signal about future policy moves, but he repeated the Fed will carefully assess incoming data, the balance of risks, and the appropriate policy path in rate adjustments. On inflation, Powell echoed the statement, noting they have made considerable progress towards the 2% inflation goal and recent monthly readings show ‘modest further progress’. He also stressed are cuts are not appropriate until the Fed gains greater confidence inflation is returning to target, but they will continue to make decisions on a meeting-by-meeting basis. On growth, Powell said it appears to have moderated in the first half of 2024, but the US economy has been exceptional when compared to global peers. He noted there are significant housing issues in the nation, and although wage increases are still very high, they are coming down to more sustainable levels. Given it was the testimony about the Monetary Policy Report, Powell was testifying on behalf of the Fed as a whole, and not giving his own views. But one nuance is that last week he spoke on how the disinflationary trend is resuming and they are back on the disinflationary path, albeit he did not mention this at the testimony. Nonetheless, nothing has changed the narrative since last week, aside from perhaps a cooler jobs market (but that would support the disinflation argument), so I suspect Powell still holds this view, but perhaps some hawks on the FOMC need more convincing. US CPI data will be key on Thursday. Note, that banks saw notable upside as Chair Powell spoke, he said it is a strongly held view of the Fed board that bank regulators should seek additional feedback on their efforts to hike bank capital, a move that the banking industry has been pushing for. Powell said the FDIC and OCC made progress on the proposal, but soliciting more feedback has not been endorsed by the other agencies yet. The Fed Chair did suggest the process “will take some time”, and Reuters suggests a lengthy delay to finalise the rules could imperil the current effort, where a Trump victory in November could see him install new regulators who are not supportive of the project. Elsewhere, Oil again closed 1% lower while Gold was flat.
To mark my 3025th issue of TraderNoble Daily Commentary I am offering a special 2-Year Rate of Euro 2750 for my Platinum Service which includes 1 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 was flat again yesterday and is still ahead by 243 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 0.07% higher at a price of 5576.
The Dow Jones Industrial Average closed 52 points lower for a 0.13% loss at a price of 39,291.
The NASDAQ 100 closed 0.07% higher at a price of 20,453.
The Stoxx Europe 600 Index closed 0.90% lower.
This Morning, the MSCI Asia Pacific closed 0.3% lower.
This Morning, the Nikkei closed 0.61% higher at a price of 41,831.
Currencies
The Bloomberg Dollar Spot Index closed 0.17% higher.
The Euro closed 0.1% lower at $1.0811.
The British Pound closed 0.1% lower at 1.2786.
The Japanese Yen rose fell 0.3% closing at $161.30.
Bonds
Germany’s 10-year yield closed 3 basis points higher 2.56%.
Britain’s 10-year yield closed 4 basis points higher at 4.16%.
U.S.10 Year Treasury closed 2 basis points higher at 4.31%.
Commodities
West Texas Intermediate crude closed 0.96% lower at $81.54 a barrel.
Gold closed 0.2% higher at $2362 an ounce.
This morning on the Economic Front we have a speech from Bundesbank President Nagel at 9.00 am. This is followed by U.S. MBA Mortgage Applications at 12.00 pm and the OPEC Monthly Report at 1.00 pm. Finally, we have the second day of Testimony from Fed Chair Powell at 3.00 pm and the 10 Year Treasury Auction at 6.00 pm.
Cash S&P 500
There is no stopping the S&P as this key Index made its 36th record high for 2024. The 14 Day RSI closed at 78 last night on yet more negative divergences. There is no price discovery as the market makes one new high after another on decreasing volume. Five stocks make up 29% of the S&P meaning nobody is diversified even if they think they are. There is no doubt that these type of moves are a freak show which often can lead to calamity especially with the extreme weakening underneath. The McClellan Oscillator again closed negative last night with a -9 print. I keep saying this should not be happening when you have both the S&P and NDX at new highs. With earnings starting on Friday, the key week to watch is from July 22 with 47% of market cap due to report. The VIX continues to trade in extremely narrow ranges looking to me like it is begging to break higher. Remember we still have a large ‘’Open Gap’’ in the VIX from a few months ago at a price of 18.50. I am still short the S&P at an average rate of 5550 with no stop for now. I will leave my T/P level unchanged at 5542. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
EUR/USD
I am still flat. I will not chase the market higher as I continue to be a buyer on any dip lower to 1.0710/1.0780 with the same 1.0645 ‘’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 1.0830.
Dollar Index
The Dollar traded in a 25-point range yesterday and I am still flat. The Dollar has resistance from 105.40/106.10 where I will continue to be a seller with the same 106.65 ‘’Closing Stop’’.
Cash DAX
Thankfully we had no buy level in the DAX yesterday. While the S&P made a new all-time high the DAX is trading almost 250 points lower from where I marked prices 24 hours ago. The DAX has support from 7910/8010 where I will be a strong buyer with a 7835 ‘’Closing Stop’’. I no longer want to be a seller of the DAX at this time. If this view changes I will be back with a new update for my Platinum Members.
Cash FTSE
No Change. I am still long the FTSE at a price of 8190. Even though the FTSE had a small sell-off yesterday, I will continue to look to add to this position on any further move lower to 8080. I will have no stop on this position given the massive support below in 7900/8100 area. In this range we have the 2023 highs, the 100 Day Moving Average and close to the .382 fin retracement. I will now lower my T/P level on this position to 8230. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
I am still flat the Dow. The Dow hit a high at 39500 shortly after Powell spoke before falling 200 points into the close. Despite the strength of both the NDX and S&P, I will not chase the Dow higher as I continue to be a buyer on any dip lower to 38830/39080 with the same 38695 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 29230.
Cash NASDAQ 100
No Change: I am still short the NDX at an average rate of 20390 with the same 20280 T/P level. I will leave my 20555 ‘’Closing Stop’’ unchanged for now. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
September BUND
The Bund traded in a narrow range since I posted yesterday morning. I am still flat as the market never came close to Monday’s buy range. I will now raise my buy level to 129.90/130.70 while leaving my 129.15 ‘’Closing Stop’’ unchanged. If triggered, I will have a T/P level at 131.25.
Gold Rolling Contract
Gold hit a low at 2349 before attracting some small buying into the New York close. I am still flat. I will not chase the market higher leaving my 2316/2332 buy level unchanged with the same 2305 ‘’Closing Stop’’. If triggered, I will have a T/P level at 2344.
Silver Rolling Contract
No Change: I am still flat as Silver has reversed some of Friday’s gains. Silver has support from 29.50/30.30 where I will continue to be a buyer with the same 28.25 ‘’Closing Stop’’. If triggered, I will have a T/P level at 30.95.
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