U.S. Equity Markets pared some of last week’s losses with gains led by the Nasdaq and Russell 2000, although gains were broad-based with the vast majority of sectors in the green while the equal-weight S&P also surged. The equity upside was largely led by gains in the large-cap sectors, with Tech notching near 2% gains while Communication and Consumer Discretionary also outperformed. Semis performed well too with Nvidia upside leading the chip space after reports the chip behemoth is working on a version of its new flagship AI chips for the Chinese market that would be compatible with US export controls. Elsewhere focus was on the US election after President Biden dropped out of the Presidential race over the weekend with VP Harris now the front-runner for the top job although participants are still digesting whether it is too late or not to boost the Democrats chance versus former President Trump. T-Notes ultimately sold off across the curve with midday selling pressures seemingly attributed to technical moves or rate-locking deal flow. In FX, the Dollar saw marginal gains as yields propped up the Dollar while the Japanese Yen was off its highs after a Bloomberg source reported that the Bank of Japan is said to see weak consumption complicating its rate decision, with some wanting more time to see the data, although others see risks it could miss the chance to lift rates. Elsewhere, the Yuan was mildly softer against the Dollar but China-exposed currencies (AUD and NZD) were the clear laggards with the market disappointed by stimulative measures from China while the surprise PBoC rate cuts were also deemed as not enough. Crude prices slid throughout the session on the back of poor China demand prospects, although crude prices were off lows once Europe shut up shop. Attention turns to heavy cap earnings this week with TSLA and GOOGL the highlights ahead of US GDP and Core PCE data later in the week, while Treasury traders will also be eyeing 2-, 5-, and 7-Year supply. President Biden dropped out of the 2024 Presidential race and endorsed his VP Kamala Harris as the Democratic Presidential candidate. Prediction markets are assigning an approximately 80% probability that Harris’ wins the nomination and also signalling that the Democrats’ chances of winning the White House have increased a little, while House and Senate probabilities have little changed. Democrats will formally nominate their candidate at the Democrat National Convention, which runs between August 19-22; The Hill reports that to win the nomination, a candidate must secure 1,986 delegates at the convention, out of the total of c.4,000 delegates. As of Sunday evening, 531 delegates had already endorsed Harris. In terms of her potential impact on markets, Reuters suggests that Harris has been friendly to Big Tech, and she has received support and donations from major tech figures. On regulation, as California Attorney General, Harris sued eBay over anticompetitive practices, and pressured Houzz to hire a chief privacy officer. On AI, Harris has warned about the “existential” threat to humanity and has urged tech leaders to remember their “moral” duties to mitigate AI risks; she supported a Biden executive order for stronger consumer protections against AI-related dangers. On energy and climate policy, Harris shares similar climate and energy positions with Biden, prioritising clean energy and environmental justice. She had a reputation for being tough on big oil during her tenure as California’s District Attorney and Attorney General. Meanwhile, China’s central bank unexpectedly cut its LPR rates for the first time since February; its 1 Year Loan Prime Rate was reduced to 3.35% (it was expected to hold it at 3.45%), while its 5 Year Loan Prime Rate was cut to 3.85% (it was expected to remain at 3.95%); the 7-day reverse repo rate was also lowered by 10bps to 1.7%. The PBoC will also lower collateral requirements for the Medium-term Lending Facility Loans from July, helping to increase the size of tradable bonds in the market and to alleviate pressure on supply and demand of bonds in the market. Elsewhere, Oil closed 0.36% lower while Gold was flat Monday following a trading session that saw plenty of two-way price action.
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 made 95 points yesterday and is now ahead by 1160 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 1.08% higher at a price of 5564.
The Dow Jones Industrial Average closed 127 points higher for a 0.32% gain at a price of 40,415.
The NASDAQ 100 closed 1.54% higher at a price of 19,822.
The Stoxx Europe 600 Index closed 1.0% higher.
This Morning, the MSCI Asia Pacific closed 0.3% higher.
This Morning, the Nikkei closed 0.01% lower at a price of 39,594.
Currencies
The Bloomberg Dollar Spot Index closed 0.08% lower.
The Euro closed 0.05% higher at $1.0887.
The British Pound closed 0.1% higher at 1.2928.
The Japanese Yen rose 0.15% closing at $157.09.
Bonds
Germany’s 10-year yield closed 2 basis points higher 2.49%.
Britain’s 10-year yield closed 4 basis points higher at 4.16%.
U.S.10 Year Treasury closed 2 basis points higher at 4.26%.
Commodities
West Texas Intermediate crude closed 0.36% lower at $79.84 a barrel.
Gold closed 0.2% lower at $2396 an ounce.
This morning on the Economic Front we have no data of note from either the U.K. or the Euro-Zone. At 3.00 pm we have Euro-Zone Consumer Confidence At the same time we have U.S. Existing Home Sales and the Richmond Fed Manufacturing Index. Finally, we have a Two-Year Treasury Auction at 6.00 pm
Cash S&P 500
The VIX closed 9.75% lower yesterday at a price of 14.91. This move lower helped the S&P to rally 60 Handles, for a 1.08% gain. While the seasonality chart is calling for one more sell-off this month before we head into the bullish August period, I certainly have no interest in shorting the S&P. I will use dips to scale into long trades. Treasury Secretary Yellen did not hold back in a tweet early yesterday morning following President Biden’s statement that he was dropping out of the Presidential Election. Yellen said and I quote: ‘’I’m proud of the work of the Biden-Harris Administration has done over the past 3.5 years on behalf of the American people to create 15 million new jobs, lower costs and deliver strong economic growth. I look forward to continuing that work to help American families and businesses get ahead’’. Yellen remains in charge of the fiscal impulse machinations and bulls cannot lose as the market is still pricing in a Trump win for further tax cuts. Free money from both sides and the rich keep getting richer. This is the record of the duopoly that runs the political system. I am still flat the S&P as the market never came close to hitting Friday’s Chicago close. The low yesterday was 5529, meaning we have another 25 Handle ‘’Open Gap’’. Today, I will raise my S&P buy level to 5511/5527 with a higher 5499 ‘’Closing Stop’’.
EUR/USD
I am still flat the Euro as the market again traded in a narrow range. The Euro has strong resistance from 1.0980/1.1060 where I will be an aggressive seller with a 1.1115 ‘’Closing Stop’’. Meanwhile, I will continue to be a buyer on any dip lower to 1.0770/1.0840 with the same 1.0695 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 1.0920. If I am taken long, I will have a T/P level at 1.0890.
Dollar Index
It is hard to make points when the Dollar Index only has a 20-point range. I would have expected the Dollar to have more of an impact after Biden withdrew from the election but no, just meandered in a narrow range awaiting some guidance. I am still flat the Dollar as I continue to be a buyer on any dip lower to 103.20/103.90 with the same 102.45 ‘’Closing Stop’’. I still do not want to be short the Dollar at this time.
Cash DAX
The DAX never came close to my buy level by surging over 200 points where I marked prices 24-hours ago. Thankfully we had no sell level as buyers hit the European Market mid-morning, driving the price higher for the rest of Monday’s trading session. I will now raise my buy level to 18150/18240 with a higher 18045 ‘’Closing Stop’’. If triggered, I will have a T/P level at 18310. Ahead of this week’s blockbuster of tech earnings from America, I do not want to be short 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 will not chase the FTSE higher preferring to continue with my 8100/8160 buy level. I will leave my 8035 ‘’Closing Stop’’ unchanged. If triggered, I will have a T/P level at 8210. I still do not want to be short the FTSE at this time. If this view changes, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
The Dow traded in a narrow 250-pont range yesterday and I am still flat. I will now raise my buy level to 39850/40100 with a now higher 39695 ‘’Closing Stop’’. The Dow has resistance from 40700/40950 where I will continue to be a small seller with the same 41105 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 40530. If I am taken long, I will have a T/P level at 40270.
Cash NASDAQ 100
I am still long the NDX at an average rate of 19950. Yesterday’s 300-point rally is a welcome relief. I will now lower my exit level on this position to 19880 and look to reassess if this happens. We have had nice gains over the past week so we can afford to take a loss on this position if the market continues to rally. If the NDX continues to drop, we have major support from 19200/19350. I will still have no stop on this position. If this view changes, I will be back with a new update for my Platinum Members.
September BUND
The Bund just missed yesterday’s 131.60 buy level by three points before having a small rally into the New York close. Today, I will lower my buy level slightly to 130.70/131.40 with a now lower 129.95 tight ‘’Closing Stop’’. Despite the low Yield for the Bund, I still do not want to be short the Bund at this time. If this view changes, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
My Gold plan worked well as the market traded lower to my 2385 buy level before rallying to my revised 2394.50 T/P level as emailed to my Platinum Members and I am now flat. Gold has further support from 2364/2378 where I will again be a buyer with a lower 2351 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2390.
Silver Rolling Contract
Silver tried to break lower yesterday before a late rally saw the market close over 29.00. I am still long from last week at an average rate of 29.80. I will leave my 28.55 ‘’Closing Stop’’ unchanged while lowering my T/P level to 30.20. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Recent Comments