U.S Equity Markets closed mixed on Tuesday following a trading session that witnessed plenty of two-way price action. The NDX underperformed, seeing marginal losses after NXPI earnings disappointed, which weighed on semis. Both the S&P and Dow sold off, with a lot of the weakness observed into the closing bell ahead of key earnings after hours (GOOGL, TSLA, V), while the Russell 2000 saw notable outperformance, but also off highs into the close. Sectors were mixed, with Materials, Financials, and Consumer Discretionary outperforming, while Energy, Utilities, and Consumer Staples lagged. Energy was the clear laggard with the energy space continuing to be hit by sliding crude prices on China demand fears. The macro highlights largely centred around earnings, although on the election, VP Harris is off to a strong start to her Presidential Campaign, with the latest national Reuters/IPSOS poll putting her marginally ahead of GOP Presidential Nominee Trump. The unwind of the Trump trade saw T-Notes bid across the curve with the short-end outperforming, also supported by strong 2 Year Auctions out of Germany and the U.S. As mentioned, NXPI earnings disappointed, while UPS shares were slammed after a weak quarter and guidance. GM and CMCSA disappointed, while GE shares performed well post-earnings. After the close we got earnings from both Alphabet and Tesla. Tesla earnings results were weak as margins disappoint while production of more affordable models is to begin in 2025. The NDX Futures Market is down over 1% as I go to press. In FX, the Dollar was bid but the Dollar Index failed to convincingly rise above 104.50 with the Japanese Yen outperforming while the Antipodes continued to lag on aforementioned China woes. US Existing Home sales fell 5.4% M/M to 3.89 million from 4.11 million, deeper than the expected decline to 4.00 million. The median home price for existing homes rose 4.1% Y/Y to USD 426.9k, while the inventory of homes for sale rose to 4.1 months’ worth from 3.7 months previously. Oxford Economics highlighted that “Record-high home prices and high mortgage rates weighed on existing home sales in June, which declined more than expected”. However, looking ahead OxEco notes that the more recent decline in mortgage rates, which the desk expects to gain steam as the Fed cuts rates later in the year, will support a modest rebound in home sales later in 2024. Looking into the report, “All four major US regions posted sales declines. Y/Y, sales waned in the Northeast, Midwest, and South but were unchanged in the West”. The NAR Chief Economist noted “We’re seeing a slow shift from a seller’s market to a buyer’s market,”… adding that “Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis.” Richmond Fed decreased to -17 in July from -10, with all three of its component Indices declining. Shipments to -21 (prev. -19), with new orders and employment at -23 (prev. -16) and -5 (prev. -2), respectively. Elsewhere, firms grew less optimistic about local business conditions, as the Index fell to -21 from -13, with the future index inching lower to 7 from 9. Looking ahead, the future indices for shipments and new orders remained solidly in positive territory, suggesting that firms continued to expect improvements in these areas over the next six months. The vendor lead time index rose marginally into positive territory, for only the second time in two years. In addition, firms continued to report declining backlogs, remaining in negative territory. The inflationary gauges of prices paid and received fell in July, with firms expecting little change in price growth over the next 12 months. This afternoon we have the latest Bank of Canada rate decision, MPR and Governor Macklem’s opening statement will be released at 2.45 pm on Wednesday 24th July 2024. There will then be a press conference with Governor Macklem and Senior Deputy Governor Rogers at 3.30 pm; Macklem will read his opening remarks, and then there will be a Q&A. Rates are expected to be cut by 25bps, taking its policy rate to 4.50%, the second consecutive 25bp cut from the BoC. However, this is not a certainty with some analysts, 8/30 surveyed by Reuters, looking for a hold. The remaining 22 analysts look for a cut, while Money Markets currently price in a 25bp cut with a 92% implied probability. The statement, MPR and press conference will be used to gauge appetite from the BoC for rate cuts throughout the year-end, Money Markets are fully pricing in at least two rate cuts this year (including July), with a c. 50% probability of a third, which would take rates to 4.00%. The Reuters survey saw a slim majority, 16/30, forecast two more rate cuts after July, taking its policy rate to 4.00% by year-end. Elsewhere, Oil fell 1.34% while despite a stronger Dollar, Gold ended Tuesday with a 0.3% gain.
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 lost 30 points yesterday and is now ahead by 1130 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 0.16% lower at a price of 5555.
The Dow Jones Industrial Average closed 57 points lower for a 0.14% loss at a price of 40,357.
The NASDAQ 100 closed 0.35% lower at a price of 19,754.
The Stoxx Europe 600 Index closed 0.13% 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 0.15% higher.
The Euro closed 0.3% lower at $1.0850.
The British Pound closed 0.1% lower at 1.2905.
The Japanese Yen rose 0.90% closing at $155.61.
Bonds
Germany’s 10-year yield closed 5 basis points lower 2.44%.
Britain’s 10-year yield closed 3 basis points lower at 4.13%.
U.S.10 Year Treasury closed 3 basis points lower at 4.23%.
Commodities
West Texas Intermediate crude closed 1.34% lower at $77.35 a barrel.
Gold closed 0.3% higher at $2407 an ounce.
This morning on the Economic Front we already had the release of the German GFK Consumer Confidence Survey which printed versus expected. Next, we have German, Euro-Zone and U.K. Manufacturing PMI at 8.30 am, 9.00 am and 9.30 pm respectively. This is followed by U.S. MBA Mortgage Applications at 12.00 pm and Wholesale Inventories and the latest Trade Balance at 1.30 pm. At 2.45 pm we have Composite PMI and the Bank of Canada Rate Decision. Finally, we have New Home Sales at 3.00 pm and a Five Year Treasury Auction at 6.00 pm.
Cash S&P 500
While Monday’s S&P bounce made perfect sense given how oversold the market had got after falling over 170 Handles last week, the S&P is back on the defensive this morning following the report of Tesla earnings. With the Fed Meeting next week and the economy slowing as indicated in my economic commentary above, it is hard from where I sit for the S&P not to rally into the FOMC Meeting. The question is from the ‘’When and Where’’. As I mentioned yesterday the seasonality chart is calling for one more low in July before heading into the bullish August phase. The overnight 200-point fall in the NDX is the first time we are seeing follow through to the downside after last week’s Key Day Reversal since September 2023. This overnight sell-off saw the S&P hit my buy range for a now 5523 long position. I will add to this trade at 5505 with a now lower 5489 ‘’Closing Stop’’. Given the size of the potential ‘’Open Gap’’ from last night’s Chicago close I will have a T/P level at 5539 on this position. 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 the Euro as the market came within a couple of points of yesterday’s buy range before having a small rally into the New York close. I will now lower my sell level to 1.0950/1.1030 with a now lower 1.1105 wider ‘’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 1.0905. If I am taken long, I will have a T/P level at 1.0890.
Dollar Index
The boring sideways price action for the Dollar shows no sign of stopping any time soon. It is hard to make points when the Dollar Index only has a 25-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 yesterday, hitting an intra-day high at 18600 before selling off into the close and again this morning. I am still flat. I will continue to be a small buyer on any further dip lower to 18150/18240 with a the same 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 still 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
My FTSE plan worked well. Shortly after I posted yesterday morning the FTSE traded lower to my 8160-buy level before rallying to my 8210 T/P level. Subsequently, the FTSE made an intra-day high at 8230 before selling returned driving the market 80 points lower into the close. Just as I go to post the FTSE has hit my latest 8115 buy level as emailed to my Platinum Members. I am still long with a now lower 8160 T/P level I will add to this position on any further move lower to 8055 while leaving my 7995 ‘’Closing Stop’’ unchanged. 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. As I am now long both the NDX and S&P I will now lower my Dow buy level to 39770/40020 with a lower 39595 ‘’Closing Stop’’. Ahead of next week’s FOMC Meeting I do not want to be short the Dow at this time.
Cash NASDAQ 100
The NDX rallied to an afternoon high at 19900 which was a 430-point rally from last Friday’s low print. Ahead of Goggle and Tesla earnings after the close, I emailed my Platinum Members to exit any long position at my revised 19870 stop price. For my Premium Members anyone long the NDX should have been out at my 19880 T/P level as indicated in yesterday’s Daily Commentary. Subsequently, I emailed my Platinum Members to buy the NDX on any dip after last night’s earnings. As a result I am now long the NDX here at 19550. I will add to this trade at 19400 while my ‘’Closing Stop’’ will be at a price of 19295. I will have a T/P level on this position at 19640. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
September BUND
The Bund never came close to yesterday’s buy range, and I am still flat. Ahead of so much Treasury Supply this week I am reluctant to chase the Bund higher. Therefore, I will continue to be a buyer on any dip lower to 130.70/131.40 with the same 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.
Gold Rolling Contract
I am still flat as the market again traded in a narrow range following last week’s aggressive sell-off. Gold has support from 2364/2378 where I will still be a buyer with the same 2351 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2390.
Silver Rolling Contract
Silver hit a low at 28.66 before rallying 60 points off this low into the New York close. I am still long from last week at an average rate of 29.80. I will leave my 28.55 ‘’Closing Stop’’ unchanged while also leaving my T/P level unchanged at 30.20. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Recent Comments