U.S. Indices traded mostly in the red on Friday as tentativeness was present across markets ahead of the Trump/Putin meeting. Despite US Retail Sales matching expectations in July alongside a stronger-than-expected control figure (a better gauge of core spending), stocks came under pressure ahead of and after the cash open. Sector gains were led in Healthcare due to Berkshire Hathaway’s Q2 13F unveiling a new stake in UnitedHealth (UNH, +12%). As such, Dow outperformed SPX (-0.3%), NDX (-0.5%), and RUT (-0.6%). On the flip side, Financials were hit the most alongside Tech, with the latter weighed by fresh Trump remarks on tariffs on chip imports, “I’m going to have a rate that is going to be 200%, 300%”. Also weighing on semiconductors was poor guidance offered by Applied Materials in their Q3 report (AMAT, -14%). Back to the data, Industrial Production unexpectedly declined, import prices were hot (note: the BEA excludes tariffs from import and export price index calculations), University of Michigan Sentiment unexpectedly worsened, and NY Fed Manufacturing surged above expectations. Thereafter, the Atlanta Fed GDPnow model continues to track Q3 GDP growth at 2.5%. The US data led Treasuries to continue their descent lower with the curve bear steepening into the weekend. Meanwhile, the Dollar pared most of the PPI-induced strength seen on Thursday, with the Japanese Yen weighing on the Dollar Index after a GDP (Q2) beat. Crude prices settled lower, ending the week in the red ahead of the Trump-Putin meeting in Alaska. Bloomberg reports that the US has readied a suite of options to punish Russia if talks fail; the US mulls Rosneft and Lukoil sanctions if Putin baulks on a ceasefire. Retail sales for July rose 0.5%, as forecasted, easing from the upwardly revised 0.9% in June. Ex-autos fell to 0.3%, in line with consensus, from 0.8% (initially 0.5%), and ex-gas/autos dropped to 0.2% from 0.8% (initially 0.6%). The closely watched retail control printed 0.5% from 0.8% (initially 0.5%), but above the forecasted 0.4%, which Pantheon Macroeconomics quips still looks reasonably healthy even in volume terms, given that the relevant components of the CPI rose by only around 0.1%. Pantheon adds the report will ease some of the worries about the health of consumers’ spending following the tariff shock, given the modest further gains in underlying sales volumes and the upward revisions to the earlier months’ numbers. Despite saying that, Pantheon notes growth in consumption still looks relatively weak, and the softening labour market and further likely pass-through of tariffs suggest a sharp reacceleration is unlikely. On the headline figure, just over half of the rise was due to a further 1.6% recovery in auto sales. PM adds that auto sales have held up relatively well recently, partly because the pass-through of tariffs to vehicle prices has so far been very limited, but that seems unlikely to last indefinitely. Import Prices rose 0.4% in July, above the 0.0% expected, with the prior 0.1% revised down to -0.1%. Import Fuel prices jumped 2.7% (prev. 0.8%), the largest increase since January 2025, driven by higher prices for import petroleum and import Natural Gas. Meanwhile, prices for non-fuel imports advanced 0.3% (prev. -0.3%) as higher prices for nonfuel industrial supplies and materials, consumer goods, and capital goods more than offset lower prices for automotive vehicles and foods, feeds, and beverages. Export Prices increased 0.1% as expected (prev. 0.5%). Agricultural export prices were unchanged (prev. 0.8) due to higher prices for meat and vegetables being offset by lower prices for corn and animal feeds. Exports-ex agriculture rose 0.1% (prev. 0.5%), due to higher prices for automotive vehicles and capital. Following the data, Citi’s July Core PCE now tracks at 0.27% M/M, and it was initially at 0.29% M/M after CPI and PPI data last week. The Preliminary University of Michigan for August saw sentiment fall to 58.6 (exp. 62.0, prev. 61.7), Conditions tumble to 60.9 (exp. 67.9, prev. 68.0), outside the bottom end of the forecast range, and Expectations fall to 57.2 from 57.7, but above the expected 56.5. In terms of inflation expectations, 1yr and 5yr ahead rose to 4.9% (prev. 4.5%) and 3.9% (prev. 3.4%), respectively. Joanne Hsu, Surveys of Consumers Director, said, “Consumer sentiment fell back about 5%, declining for the first time in four months and largely stems from rising worries about inflation. Buying conditions for durables plunged 14%, its lowest reading in a year, on the basis of high prices.” Hsu added, “Overall, consumers are no longer bracing for the worst-case scenario for the economy feared in April when reciprocal tariffs were announced and then paused. However, consumers continue to expect both inflation and unemployment to deteriorate in the future”. PPI was hot when release on Thursday. The headline M/M rose 0.9%, well above the 0.2% forecast and massively above the highest forecast of 0.3%. This saw the Y/Y at 3.3%, accelerating from 2.3%, above the 2.5% forecast and above the highest 3.0% forecast. The core measure rose 0.9%, above the 0.2% forecast, 0.0% prior, and above the 0.4% high estimate, with Y/Y at 3.7% (exp. 2.9%, prev. 2.6%, high 2.6%). Within the report, the BLS highlights that within final demand, over three-quarters of the broad-based advance in July can be traced to the index for final demand services, which rose 1.1%. It also noted that over half of the broad-based July increase is attributable to margins for final demand trade services, which rose 2.0%. Prices for final demand goods increased 0.7%. Within the report, the PCE components saw a notable increase in Portfolio Management fees, rising 5.8%, accelerating from 2.1% in June. However, this is primarily tied to asset prices and reflects the gains in equities seen over the last month. The PPI report will likely bolster the case for those on the Fed that they are further away from their inflation goals than their employment goals. However, there is still a lot of data to digest between now and September. Money markets are no longer fully pricing a 25bps rate cut in September after the PPI report. When looking towards the PCE report, Oxford Economics write “With the CPI and PPI components in hand, our forecast is for the PCE deflator to rise 0.2% m/m in July, while the core PCE deflator will rise 0.3%”. This is not as scary as the 0.9% PPI prints. Elsewhere, Oil closed 1.81% lower while Gold ended Friday with a 0.3% fall.
To mark my 3225th 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 made 637 points on Friday and is now ahead by 2279 points for August after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 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 0.29% lower at a price of 6449.
The Dow Jones Industrial Average closed 34 points higher for a 0.08% gain at a price of 44,946.
The NASDAQ 100 closed 0.51% lower at a price of 23,712.
The Stoxx Europe 600 Index closed 0.06% lower.
This Morning, the MSCI Asia Pacific closed 0.4% lower.
This morning, the Nikkei closed 1.45% lower at a price of 42,649.
Currencies
The Bloomberg Dollar Spot Index closed 0.42% lower.
The Euro closed 0.13% higher at $1.1702.
The British Pound closed 0.15% higher at $1.3558.
The Japanese Yen rose 0.12% closing at $147.16.
Bonds
U.K.’s 10-Year Gilt closed 10 basis points higher at 4.70%.
Germany’s 10-Year Bund Yield closed 9 basis points higher at 2.78%
U.S.10 Year Treasury closed 8 basis points higher at 4.32%.
Commodities
West Texas Intermediate crude closed 1.81% lower at $62.80 a barrel.
Gold closed 0.31% lower at $3335.10 an ounce.
This morning on the Economic Front we have Euro-Zone Trade Balance at 10.00 am. The only other data of note is U.S. NAHB Housing Market Index which will be released at 3.00 pm.
Cash S&P 500
The S&P made a new all-time high on Friday at 6482 before falling over 30 Handles into the close. This latest high came on a massive negative divergence. However, until the Feb high of 6147 is broken, bulls are still in control. The 50 Day Moving Average comes in at a price of 6227. If the market does sell-off this key support level with off short-term support as the bottom of the Bolling Band will be decisively broken. With Financial Conditions the easiest since 2017 while at the same time we have $1.1 trillion of share buybacks this year it is easy to see why the S&P is making one new high after another. Profit margins are at 11% and this is adding to the massive retail funds hitting both the S&P and NDX. The Administration ran a $300 billion deficit in July which is the third highest spike in history – similar to the COVID Crash. With this backdrop it makes it extremely difficult to be short the S&P but in my opinion risks are increasing at a rapid rate and this is why I have been a seller of rallies over the past number of weeks. The Beautiful Bill will add $4.1 trillion to the debt levels this year. Citibank, as a result have raised their year-end target for the S&P to 6600 due to tax benefits to corporations on the back of the bill. However, one of the main reasons that I am bearish is the increase in the inflation rate. Core Inflation is at its highest level in 25 years. There is absolutely no chance the Fed can cut rates against this backdrop despite the political pressure from the Trump Administration. Rates will only be cut if there is a recession that leads to a large increase in Unemployment. According to a recent report from Goldman Sachs it is tariffs that are causing an increase in inflation and that ultimately it is the consumer who will bare the brunt of these tariffs with higher prices. Needless to say, Trump has called for the Goldman Economist to be fired. Ahead of the September FOMC Meeting we will see both CPI and PPI. The Administration are deluding themselves that there is no inflation. As you know I pay huge attention to the $NYSI. This key signal is hitting a major trendline which has led to a drop in the S&P every time this key line has been hit. On top of this we are seeing huge negative divergence at these new highs as shown on the $NYSI Chart. The risk/reward is not there to be a buyer of the market at this time until we see a sustainable sell-off. Selling rallies worked well on Thursday and Friday. The S&P hit my 6472-sell level before trading lower to my 6446 T/P level. Subsequently, I emailed my Platinum Members to go short the S&P again at 6479 before covering this position on Friday afternoon at 6451 and I am now flat. Today, I will again be a seller from 6468/6488 with a 6505 ‘Closing Stop’. If I am taken long, I will have a T/P level at 6443. I no longer want to be a buyer of the S&P at this time.
EUR/USD
The Euro sold off to my revised 1.1638 T/P level on my latest 1.1690 short position. Subsequently, I went short the Euro again at a price of 1.1715. I will add to this position at 1.1795 with a now higher 1.1855 ‘Closing Stop’. I will have a T/P level on this position at 1.1640. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
I am still long the Dollar at a rate of 98.00. I will add to this position at 97.30 while leaving my 96.75 ‘Closing Stop’ unchanged. I will now lower my T/P level to 98.40. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
I am still short the Russell from last week at an average rate of 2280. Just like the other three main American Indexes, last Thursday’s recovery high in the Russell came with a large negative divergence. Today, I will leave my 2365 ‘Closing Stop’ unchanged while raising my T/P level to 2245. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
FTSE 100
The FTSE recorded a Key Day Reversal on Friday, hitting a new all-time high at 9228 in the morning before falling 100 points into the close. This move lower saw my 9130 T/P level triggered on my 9175 short position and I am now flat. Today, I will again be a seller from 9180/9250 with the same 9305 ‘Closing Stop’. If I am taken short, I will have a T/P level at 9120.
Dow Rolling Contract
The Dow eked a new all-time high at 45211 on Friday afternoon before falling 300 points from this high into the close. So far the daily closing high for the Dow remains on December 4, 2024 and just shows how much the Dow has undeformed both the S&P and NDX over the past two months. I am still flat. Today, I will be a small seller from 45200/45450 with a 45605 tight ‘Closing Stop’. I still do not want to be long the Dow at this time. If I am taken short, I will have a T/P level at 44940.
Cash NASDAQ 100
The NASDAQ Market Cap has reached a new peak at 145% of U.S. Money Supply as of Q2. There is absolutely no risk/reward in being a buyer at these levels while the P/Es are stretched to the upside. I know markets can rally further but not by me at these inflated prices. Adding the mix is that both Meta and Microsoft are spending 25% and 47% respectively of their capital expenditure on NVIDIA Chips. This is insane as these data centres use so much water and electricity to run their facilities. The only company making money on AI is Nvidia given the number of chip orders. I am still short the NDX at an average rate of 23620 with the same 23905 ‘Closing Stop’. Today, I will leave my T/P level at 23590 and reassess if hit. If this view changes, I will be back with a new update for my Platinum Members.
December BUND
Higher Treasury Yields saw the Bund sell-off to Thursday’s buy range for a now 128.95 long position. I will add to this position on any further move lower to 128.25 while leaving my 127.75 ‘Closing Stop’ unchanged. I will now lower my T/P level to 129.55. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
I am still flat. I will now lower my Gold buy level to 3280/3300 with a lower 3259 ‘Closing Stop’. If I am taken long, I will have a T/P level at 3321. If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
I am still flat. Today, I will leave my Silver buy level unchanged at 36.50/37.30 with the same 35.25 ‘Closing Stop’. If I am taken long, I will have a T/P level 38.00.
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