U.S. Equity Markets closed lower across the board following a further rise in Bond Yields. The global debt sell off continues to march onward with yields moving towards the highest levels seen since the global financial crisis. In the U.S., 10-year yields hit 4.35% yesterday – nearing the peak we saw 10 months ago – and the highest since 2007. In Europe, the U.K. gilts hit a 15-year high, while the German 10-year Bund yield rose to its highest since 2011. This renewed sell-off in the bond market comes as fears reignite that the U.S. economy is not cooling fast in to convince the Fed to end rate hikes. Intel (INTC) is scrapping its proposed $5.4 billion acquisition of Tower Semiconductor (TSEM) after the companies failed to get Chinese antitrust approval before the August 15th deadline. Recent tensions between the U.S. and China have made company transactions increasingly difficult, particularly in the semiconductor space. The deal soiled Intel CEO Pat Gelsinger’s plan to break into the semiconductor foundry market. Though Tower Semiconductor has a small share of the market, it has the expertise Intel lacks. In addition to the headwinds Intel now faces with chip development, it will have to pay Tower a $353 million termination fee. U.S. Industrial output for July rose 1%, rebounding from June’s 0.5% decline. Utilities carried the overall number higher, jumping 5.4%, as heat waves swept the nation and boosted demand for air conditioning. The Federal Reserve noted an uptick in auto production, which also helped lift overall industrial output. However, utility’s rally is expected to be short-lived as we approach the cooler months of fall. Meanwhile, economists believe the increased output will be reversed as goods producers pull back to lower inventories. European Markets closed lower. The U.K.’s Office for National Statistics reported that inflation came in at 6.8% in July, down from June’s reading of 7.9%. However, the overall drop in the Consumer Price Index (“CPI”) was largely due to lower energy prices. As a result, the Bank of England is concerned that core inflation will be stickier than anticipated. The core CPI reading, which excludes food and energy prices, held steady at June’s 6.9% reading. Analyst expectations were for it to drop to 6.8%. The core CPI continues to pose a problem for the Bank of England and Prime Minister Rishi Sunak, who promised to halve inflation by the end of the year. In Asia, with the Chinese economy continuing to falter, the People’s Bank of China slashed interest rates this week in hopes of boosting domestic demand. However, the increasing interest-rate gap between the U.S. and China has put tremendous pressure on the nation’s currency. In response, China has pledged to prevent any excess movement in the yuan through policy intervention. The Yuan is currently trading at its lowest level since 2007. Elsewhere, Oil rose 1.27% while Gold continue to build value below $1900, closing lower by 0.4%.
To mark my 2850th issue of TraderNoble Daily Commentary I am offering a special 2-Year Rate of Euro 2750 for my Platinum Service which includes 1 to 4 updated emails throughout the trading day to demonstrate this value, a 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 570 points yesterday and is now ahead by 880 points for August 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 3164 points in February, 4687 points in January 2054 points in December, 4789 points in November and 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 0.77% lower at a price of 4371.
The Dow Jones Industrial Average closed 290 points lower for a 0.84% loss at a price of 34,475.
The NASDAQ 100 closed 1.08% lower at a price of 14,715.
The Stoxx Europe 600 Index closed 0.92% lower.
Yesterday, the MSCI Asia Pacific closed 1.1% lower.
Yesterday, the Nikkei closed 0.44% lower at a price of 31,626.
Currencies
The Bloomberg Dollar Spot Index closed 0.2% higher.
The Euro closed 0.05% lower at $1.0876.
The British Pound closed 0.1% higher at 127.47.
The Japanese Yen rose 0.3% closing at $145.80.
Bonds
Germany’s 10-year yield closed 1 basis points higher at 2.70%.
Britain’s 10-year yield closed 10 basis points higher at 4.65%.
U.S.10 Year Treasury closed 7 basis points higher at 4.32%
Commodities
West Texas Intermediate crude closed 1.27% higher80.39 a barrel.
Gold closed 0.4% lower at $1884.10 an ounce.
This morning on the Economic Front we have the release of U.K. Retail Sales at 7.00 am followed by a speech from ECB’s Lane at 9.00 am. Next, we have Euro-Zone CPI and Construction Output at 10.00 am. The only American Data is a 30-year Treasury Auction at 6.00 pm.
Cash S&P 500
Wrong!. Yesterday was a frustratingly session as the S&P missed my 4422 T/P level by half a handle before selling off to my 4390 second buy level for a 4399 average long position. I was stopped out of this position just before the close at 4375 and I am now flat. All my signals continue to give a buy set-up. The $NYMO closed at -95 last night while the $BPSPX RSI closed at 17. There are five occurrences in the past five years when this has happened and each time we have resulted in strong rallies. We still have no confirmed low, meaning further risk to the downside, but signals getting more stretched to the downside which makes all of this a tinderbox for a strong counter rally. One comfort was the Dollar did not close higher. Today, I will again be a buyer on any further dip to 4347/4362 with a 4329 wider ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 4385. Ahead of the weekend I do not want to be short.
EUR/USD
No Change. Despite the aggressive sell-off in U.S. Equity Markets again yesterday, the Euro traded in a narrow range over the past 24 hours. I am still long at 1.0970 with the same 1.0875 ‘’Closing Stop’’. I will now lower my T/P level to 1.1000. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
June Dollar Index
No Change. I am still flat as the Dollar fell shy of yesterday’s sell range. I will continue to be a seller from 103.70/104.30 with the same 104.81 ‘’Closing Stop’’.
Cash DAX
The DAX got hit hard yesterday and I am still flat. The DAX has strong support from 15380/15480. I will now lower my buy level to this area with a lower 15295 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 15605.
Cash FTSE
I am still flat. Ahead of the weekend I am going to stay flat the FTSE until I have a better feel for the market. If this changes I will be back with a new update for my Platinum Members.
Dow Rolling Contract
Wrong! The Dow got hit hard yesterday and in the process joined both the NDX and S&P in closing below its 50 -Day Moving Average. (34612). This move lower saw my 34595 stop triggered on my latest 34925 average long position and I am now flat. With the McClellan Oscillator closing at – 282 last night I will continue to be a buyer of dips. The Dow has short-term support from 34150/34400 where I will again be a buyer with a 33995 ‘’Closing Stop’’. If I am taken long I will have a T/P level at 34605.
Cash NASDAQ 100
With the $BPNDX falling 11% yesterday, the RSI fell to a 17 print. This is lower than last October’s extreme that was the low for a 20% rally. Despite the pain I am sticking to the long side. As I go to press it is my only open long position at this time. I am still long at 15085. I will continue with no stop on this trade while lowering my T/P level to 15200. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
September BUND
No Change. I am still long from Tuesday at an average rate of 131.10 with the same 131.50 T/P level. I will leave my 130.15 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold got hit into the New York close, hitting my 1886 buy level. I will add to this position at 1870 with a now lower 1859 tight ‘’Closing Stop’’. I will now lower my T/P level to 1900. If any of the above levels are hit I will be back with a new update for my Platinum Members.
Silver Rolling Contract
No Change. Silver continues to trade in narrow ranges which is surprising given the recent weakness in Gold. I am still long at an average rate of 24.20 with the same 24.70 T/P level. Silver is trading higher at 22.80 this morning which is a surprise given the price action in Gold. I will continue to have no stop on this position. If this view changes I will email my Platinum Members.
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