U.S. Equity Markets closed mostly lower after a report said that a leading experimental Coronavirus drug performed poorly in a test. Crude oil climbed back above $16 a barrel. The benchmark S&P 500 finished in the red after whipsawing investors between gains and losses in the last few hours of trading. Gilead Sciences Inc.’s antiviral drug remdesivir flopped in its first randomised clinical trial, the Financial Times reported, citing draft documents published accidentally by the World Health Organization. The drug company disputed that characterisation. The S&P 500 had been on pace for a second consecutive gain before the Gilead news. Exxon and Chevron were the biggest gains in the energy sector. Crude oil climbed in New York, two days after Futures dropped below zero. Equities had gained earlier even after a report showed U.S. Jobless Claims surged by 4.4 million last week. Total job losses now exceed 26 million in the wake of the economic shutdown prompted by the Coronavirus pandemic. Elsewhere, the US Dollar was little changed against most major peers. Gold managed its first back-to-back gain in over a week as investors weighed the prospects of another wave of stimulus in virus-hit economies.
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For anyone following my Platinum Service it made 235 points yesterday and is now ahead by 4155 points for April, having made an incredible 9264 points in March, 2223 points in February, 2142 points in January, 818 points in December, 780 points in November, 1649 points in October, 1620 points in September and 2387 points in August Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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Equities
The S&P fell 0.1%, closing at a price of 2797.
The Dow Jones Industrial Average rose 0.2% to close at 23,515.
The NASDAQ climbed 0.25% to close at 8641.
The Stoxx Europe 600 closed 1.1% higher.
Japan’s Topix index fell 0.3%.
MSCI Asia Pacific index fell 0.5%.
Currencies
Here is a summary of the main Changes in F.X. Markets;
The Bloomberg Spot Index rose 0.1% to close at 1261.
The Japanese Yen was little changed at 107.70 per dollar.
The offshore Yuan traded at 7.0892 per dollar.
The Euro fell dipped 0.4% to $1.0773, the lowest level in four weeks.
The British Pound climbed 0.1% to $1.2346.
Bonds
The yield on 10-year Treasuries decreased three basis points to 0.59%.
Germany’s 10-Yield fell two basis points to – 0.43%.
Britain’s 10-Year Yield dipped four basis points to 0.29%.
Commodities
West Texas Intermediate crude expiring in June rose 25% to $17.25 a barrel.
Brent Crude climbed 6% to $21.79 a barrel.
Gold advanced 1.1% to $1,731 an ounce.
This morning on the Economic Front we already had the release of UK Retail Sales which fell 5.1% versus -5.0% expected. At 9.00 am we have the German IFO Business Climate Survey and this is followed at 1.30 pm by U.S Durable Goods Orders. Finally, at 3.00 pm we have the University of Michigan Consumer Sentiment Index.
June S&P 500
The S&P having surged to a high of 2836 fell after Gilead Sciences Inc.’s antiviral drug remdesivir flopped in its first randomised clinical trial, the Financial Times reported. Overnight we hit a low of 2755 and this enabled me to buy the market at 2763. As I go to press we are trading higher at 2776 and this enabled me to cover this long position at my revised 2771 T/P level and I am now flat. As I mentioned yesterday the 2750 is key support for the S&P as a break and close below here opens up the possibility of a move lower to 2600/2620. Today I will be a buyer from 2738/2758 with a 2727 tight stop. Ahead of the weekend I still do not want to be short the S&P at this time.
EUR/USD
The Euro missed my 1.0750 buy level by six points yesterday before rallying back above 1.0830. This morning the Euro is opening lower and I pulled my buy order as emailed to my Platinum Members to concentrate on my Daily Commentary. The Euro is now lower at 1.0730. Worryingly for Euro bulls, the Large Speculators hold their largest net-long position since near the February 2018 high. When they bet on a Euro rally it is normally a bearish sign. On top of this the Euro-Zone PMI data released yesterday was the weakest on record. Remember it is not just the Covid 19 which is the cause of the weak Euro-Zone data as the PMIs have been weak for the past six months of 2019. Europe is in deep recession. The squabbling by its leaders is not helping matters. Unless Europe follows the US by giving help to businesses then we could see a depression. The Euro has support from 1.0630/1.0680 where I will be a buyer with a 1.0585 stop. If I am take long I will have a T/P level at 1.0725.
June Dollar Index
The Dollar continues to make new multi-year highs and I am still flat. Today I will raise my buy level to 99.90/100.40 with a higher 99.45 stop.
June DAX
No Change as my only interest in buying the market is still on a dip lower to 10130/10230 with the same 10055 stop.
June FTSE
The FTSE made a high of 5827 yesterday just shy of my 5830 sell level before falling 100 points. If you did sell in front of my order then you made a nice gain. I am still flat and I will now lower my sell level to 5805/5875 with a lower 5935 tight stop. I still do not want to be long the FTSE at this time.
Dow Rolling Contract
The U.S Federal Reserve is leading the charge to rescue sinking economies with its unlimited balance-sheet expansion as Central Banks around the world are buying up assets at a record pace. Central Banks for the G-7 countries-Canada, France, Germany, Italy, Japan, UK and the US-collectively purchased $1.4 trillion assets in March. That is nearly five times the previous record set in April 2009. The 2008 Financial Crisis looks like a blip on the radar compared to the Coronavirus response. Morgan Stanley estimates the Fed, ECB, Bank of Japan, and Bank of England will expand their balance sheets by $6.8 trillion by the time the current COVID-19 crisis is over. It is hard to envision a scenario where this ends well. No wonder it is difficult to be short equity markets with this buying power. Yesterday my Dow plan worked well with the market hitting my 23840 sell level before selling off to my 23740 T/P level and I am now flat. Overnight, the Dow hit a low of 23265 before rallying 200 points. The Dow has strong support from 22950/23150 where I will be a buyer with the same 22795 stop. My only interest in selling the Dow is from 23900/24100 with a 24225 stop.
June NASDAQ
My NASDAQ plan worked well with the market hitting my 8725 sell level before selling off to my revised 8670 T/P level. The sell-off continued overnight with the market hitting my 8520 buy level. I am still long and I will now lower my T/P level on this position to 8570. I will add to this trade at 8425. I will also raise my stop on this position to 8370.
June BUND
I am still flat the BUND even though we opened in the middle of yesterday’s sell range. The Bund is now trading at 172.52 and if you are short I would cover. The Bund has resistance from 173.10/173.60 where I will be a seller with a 174.05 stop.
Gold Rolling Contract
With Gold Mining stocks surging yesterday it is difficult to be short Gold. This is normally a bullish setup and today I will raise my buy level to 1689/1703 with a 1678 stop.
Silver Rolling Contract
I am still flat and I will now raise my buy level to 14.50/14.90 with a tight 14.15 stop.
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