U.S. Equity Markets surged higher yesterday, led by the 2.79% gain in the NASDAQ 100. This move higher helped the VIX to close lower by over 3% at a price of 27.50. The U.S. Commerce Department reported that the country’s economic contraction was worse than anticipated during the First Quarter. The agency noted that the U.S.’s gross domestic product (“GDP”) fell at an annual pace of 1.5%, worse than the initially reported 1.4% and the 1.3% Dow Jones estimate. The GDP drop was largely due to downward revisions in private inventory and residential investment – which negatively offset positive momentum in consumer spending – resulting in the worst quarter the U.S. has seen since the onset of COVID-19. So, while consumer spending figures were encouraging, a fall in corporate profitability and disposable income suggest we may see reduced spending ahead – at least until the Federal Reserve can get inflation to slow. Within the S&P 500, 10 of the 11 sectors finished higher. European Markets closed higher. European Central Bank Governing Council Member Klass Knot said a 0.50% rate increase is not off the table for the July policy meeting. Russia’s Defense Ministry said it would consider opening shipping lanes from Ukrainian ports in response to mounting criticism about creating a global food crisis. Ukrainian President Volodymyr Zelenkskyy rejected calls for peace talks with Russia that involved ceding any occupied territory. The Italian National Institute of Statistics’ Consumer Confidence Index for May was stronger than anticipated as individuals were increasingly optimistic about their personal finances. In Asia, U.S. Trade Representative General Counsel Greta Peisch said a review of the tariffs on more than $300 billion worth of Chinese imports would take months to complete. Japan’s government said it will increase the number of overseas tourists allowed into the country in June, boosting the economic outlook. The Bank of Korea raised its benchmark interest rate by another 0.25% to 1.75%, stating that it will focus more on taming inflation growth moving forward. The People’s Bank of China issued a notice calling on banks to boost lending to small and medium enterprises, favouring regions hurt the most by COVID-19 outbreaks. Elsewhere, Oil rose 3.2% after Rystad Energy said oil and gas investments would rise 20% this year, while Gold closed lower by 0.17% on little news.
To mark my 2550th 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 178 points yesterday and is now ahead by 3186 points for May having made 762 points in April, following a gain of 5883 points in March. The Platinum Service made an impressive 5324 points in February, after ending January with a gain of 3878 points, more than making up for December’s 932 points loss, having made 2466 points in November, 1028 points in October, 2866 points in September, 1543 points in August, and 996 points in July. The Platinum Service made 1366 points in June, 1439 points in May, 1244 points in April, after ending March with an impressive gain of 3769 points. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 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 1.99% higher at a price of 4057.
The Dow Jones Industrial Average closed 516 points higher for a 1.61% gain at a price of 32,637.
The NASDAQ 100 closed 2.79% higher at a price of 12,276.
The Stoxx Europe 600 Index closed 1.1% higher.
Yesterday, the MSCI Asia Pacific Index rose 0.3%.
Yesterday, the Nikkei closed 0.27% lower at a price of 26,604.
Currencies
The Bloomberg Dollar Spot Index closed 0.3% lower.
The Euro closed 0.4% higher at $1.0718.
The British Pound closed 0.3% higher at 1.2608.
The Japanese Yen rose 0.2%, closing at $127.06.
Bonds
Germany’s 10-year yield closed four basis points higher at 0.98%.
Britain’s 10-year yield closed six basis points higher at 1.97%.
US 10 Year Treasury closed one basis points lower at 2.73%.
Commodities
West Texas Intermediate crude closed 3.2% higher at $111.47 a barrel.
Gold closed 0.17% lower at $1849.10 an ounce.
This morning on the Economic Front we have Euro-Zone Money Supply at 9.00 am. This is followed by U.S. PCE Inflation Data, Trade Balance and Wholesale Inventories at 1.30 pm. Finally, we have the University of Michigan Consumer Sentiment Index at 3.00 pm.
Cash S&P 500
Yesterday we witnessed a large inter-week rally that may gather legs or else we may see some test of the 3960/3990 support area first before trading higher. The difference with yesterday’s rally was it did not give anyone a chance to get on board while also coming on the back of a break-out after rallying 260 Handles since the 3811 low print last Friday afternoon. Most bears will have been disappointed that despite the hawkish Fed Minutes on Wednesday that we did not sell-off as finally most of the bad news may already be priced into the market. If the market was expecting a serious of rate hikes they will be disappointed by the sell-off in the Dollar and lower Bond Yields with 10-years now trading 50 basis points off the May high at 3.23%. This is a huge move. On top of this we are finally seeing some buying of Junk Bonds. The PCE Report at 1.30 pm will be key today as the Fed rely a lot on this data for its inflationary impact. I had a small sell level in the S&P yesterday which was triggered at a price of 4029 before getting stopped out of this trade at 4053 and I am now flat. I will not chase the S&P higher from here given the long-weekend in America, leaving my 3960/3990 aggressive buy level unchanged with a 3943 tight stop. If I am taken long I will have a T/P level at 4015. I still do not want to be short the S&P at this time.
EUR/USD
No Change. I am still flat the Euro and today I will raise my buy level slightly to 1.0590/1.0650 with a higher 1.0535 stop.
March Dollar Index
My latest short Dollar position worked well with the market trading lower to my 101.90 T/P level and I am now flat. Today, I will again be a seller from 102.20/102.70 with a tight 103.15 stop.
Cash DAX
I am still flat the DAX as the market followed the American Indexes higher. Ahead of the long weekend I am reluctant to chase the DAX higher, leaving my 13880/13940 buy level unchanged with a higher 13795 stop. If I am taken long I will have a T/P level at 14010.
Cash FTSE
The FTSE traded in a narrow range yesterday and I am still flat. I will now raise my buy level to 7400/7480 with a higher 7335 stop. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
Thankfully, we had no sell level in the Dow yesterday as the market build on Wednesday’s gains and I am still flat. The Dow has short-term support from 32050/32350 where I will be a small buyer with a 31895 tight stop. I no longer want to be short the Dow at this time. The Fear & Greed Index is still oversold, even though we improved to close last night at 17 which is still a reading of ‘’Extreme Fear’’.
Cash NASDAQ 100
My point above about the bad news already priced into the market is certainly looking that way in the NDX. Since the last Fed Meeting, the NDX is down close to 12% so it is no surprise that buyers are seeing value in Tech Stocks. The NDX has support from 11900/12150 where I will be a buyer with a 11775 stop. I continue to nurse last month’s 14327 long position which I have now carried into May. I will now lower my exit level on this position to 13400 which I am hopeful we will see this month. If I am taken long in my second buy range I will have a T/P level at 12410.
June BUND
A late sell-off in the Bund saw the market hit my 153.25 buy level. I am still long and I will add to this position at 152.55 with the same 151.95 stop. I will now lower my T/P level to 153.75 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
Gold Rolling Contract
No Change. I am still a buyer on any dip lower to 1820/1836 with the same 1808 stop.
Silver Rolling Contract
As I wanted to reduce my S&P loss I covered my 21.80 latest long Silver position at 22.02 and I am still flat. Today, I will again be a buyer from 21.00/21.60 with a 21.45 stop.
With London and New York closed on Monday for different Bank Holiday’s my next Daily Commentary will be on Tuesday May 31. Any of my calls that are not hit today and are subsequently triggered on Monday will see me come back with an update or two for my Platinum Members.
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