Following an intense Friday session which saw plenty of two-way price action, lower Bond Yields helped the S&P and Dow to close flat on the day. The Friday VIX crush was back as the VIX closed lower by over 3%. Walmart’s (WMT) U.S. sales grew 6.4% in the second quarter, surpassing analysts’ estimates of 4%. However, the company cautioned there would be future headwinds for consumers. CEO Doug McMillon cited rising energy costs, the resumption of student-loan payments, and dwindling savings as potential risks for household budgets. Despite hinting at consumer turbulence ahead, Walmart saw sizable growth in its e-commerce and health and wellness segments. Meanwhile, the retail giant estimates 2024 earnings to be around $6.46 a share compared with Wall Street’s $6.28 prediction. Applied Materials (AMAT), the largest U.S. manufacturer of chipmaking machinery, provided a boost to the struggling industry by raising its forecast for the quarter. Fiscal sales for the quarter are now projected to be nearly 10% higher than analyst estimates at $6.51 billion. CEO Gary Dickerson said that despite the recent dip in demand, he sees a strong rebound in the future driven by artificial intelligence and other emergent technologies. Blue Shield of California plans to significantly decrease its reliance on CVS Health’s (CVS) pharmacy services to lower drug costs for its insured members. The California health insurer has expressed interest in partnering with Amazon Pharmacy, Abarca, and Mark Cuban’s Cost Plus Drug Company. This proposed partnership could potentially save the insurer $500 million annually once the programme launches in 2025. The announcement has already affected multiple health care stocks and may push other insurers to take the multi-partnership approach. Borrowing costs have sent housing affordability to the lowest level in almost 40 years. Average mortgage rates on a 30-year loan have crested 7%, a level not seen since 2002. And rates could go as high as 8% as uncertainty continues to cloud the Fed’s September decision. Increased borrowing costs have weighed on buyers and sellers alike, with Existing-Home Sales significantly down from June of last year. Homeowners are reluctant to give up their current mortgage rates, causing prospective buyers to sit tight. This puts even more pressure on the already volatile housing market. The Federal Reserve Bank of Philadelphia’s Manufacturing Index showed positive signs for the first time in nearly a year. The index flipped to a reading of +12.0 from July’s -13.5, breaking its 11-month streak of negative readings. This comes in sharp contrast to economists’ expected reading of -10. According to the report, the Index’s turnaround was driven by a significant increase in New Orders and shipments, which climbed from the negatives for the first time since May 2022. The Philly Fed did note a decline in employment, pushing the reading further into negative territory. This echoes many official’s concerns regarding unemployment and how it will affect the Fed’s September decision. European Markets closed lower. The European Union is facing a significant surge in bankruptcies, reaching levels unseen since 2015, according to Eurostat. The second quarter saw an 8% rise from the preceding period, marking it the sixth consecutive quarter of increased default declarations. This, coupled with the steady decrease in new business creation, paints a bleak picture for the EU’s economic future as the largest economies continue to struggle with high inflation and stunted economic growth. Elsewhere, Oil ended the week in positive territory, closing higher by 1.07% on Friday, while Gold rose 0.2% following another quiet session.
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 made 393 points on Friday and is now ahead by 1273 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 0.01% lower at a price of 4369.
The Dow Jones Industrial Average closed 25 points higher for a 0.07% gain at a price of 34,500.
The NASDAQ 100 closed 0.14% lower at a price of 14,694.
The Stoxx Europe 600 Index closed 0.61% lower.
Last Friday, the MSCI Asia Pacific closed 0.7% lower.
Last Friday, the Nikkei closed 0.55% lower at a price of 31,450.
Currencies
The Bloomberg Dollar Spot Index closed 0.1% lower.
The Euro closed 0.05% higher at $1.0882.
The British Pound closed 0.1% lower at 127.32.
The Japanese Yen rose 0.2% closing at $145.41.
Bonds
Germany’s 10-year yield closed 8 basis points lower at 2.62%.
Britain’s 10-year yield closed 2 basis points higher at 4.67%.
U.S.10 Year Treasury closed 7 basis points lower at 4.25%
Commodities
West Texas Intermediate crude closed 1.07% higher at 81.25 a barrel.
Gold closed 0.2% higher at $1890.10 an ounce.
This morning on the Economic Front we have the release of German PPI at 7.00 am. The only other data of note is the Chicago Fed National Activity Index at 1.30 pm.
Cash S&P 500
What a week. On Friday morning the S&P looked like it was going to continue to break lower before support levels held leading to an unchanged close. This move lower saw the whole of my buy range filled for a 4354 average long position before rallying to my revised 4366 T/P level and I am now flat. The 4335 low print coincided with a test of the Monthly 5 EMA which thankfully held. A break and close below here opens the door to a potential right shoulder build with a target price of 4056. This level is one to watch if we break lower in September. The negative $NYMO readings that I have been harping on all about for all of August is rare. I went back and checked the data for the last number of years. I could only find weak $NYMO reads like this in 1999, 2003, 2007, 2011, 2015 and 2019. These were all odd-year numbers and all in Presidential Pre-election years. Four years apart, just like this year. This is wild and on each occasion the Bears got roasted. In some years the retest of the lows in Sept/Oct, but pretty much the lows were already in August of those sell-offs. In 2007, markets made all-time highs after that. So did 2019 and 1999. This signal is important, and respect has to be paid. It is why I have been so stubborn in buying the recent dips. The S&P again closed below the bottom of its Daily Bollinger Band although the McClellan Oscillator did improve to close at -222. Today, I will again be a buyer from 4340/4355 with a 4323 ‘’Closing Stop’’. I still do not want to be short the S&P at this time.
EUR/USD
Despite the Equity Volatility, the Euro again traded in a narrow range. 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 just shy of Friday’s sell range. I will continue to be a seller from 103.70/104.30 with the same 104.81 ‘’Closing Stop’’.
Cash DAX
My DAX plan worked well with the market trading lower to my 15470-buy level before rallying to my revised 15583 T/P level ahead of the New York close. I am now flat. Today, I will again be an aggressive buyer from 15400/15480 with a higher 15315 ‘’Closing Stop’’.
Cash FTSE
I am still flat. The FTSE was weak again on Friday. Rising Gilt Yields are hurting the FTSE with the 10 Year Gilt at multi-year highs at 4.70%. The FTSE is oversold. We have support from 7150/7210 where I will be a strong buyer with a 7085 ‘’Closing Stop’’. Given how oversold the FTSE is trading I have no interest in being short.
Dow Rolling Contract
The Dow had a bad week, closing lower by over 3% as the market finally joined the S&P and NDX in breaking below its 50 Day Moving Average. Thursday’s sell-off hurt my P&L but at least we had a decent Friday. The Dow hit my 34370-buy level before rallying to my revised 34490 T/P level and I am now flat. The Dow hit an afternoon low at 34263 on Friday. This is now key support. Today, I will be a buyer from 34120/34320 with a lower 33895 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 34505.
Cash NASDAQ 100
No Change. At least the NDX reversed earlier losses to close flat on Friday. I am still long at 15085. I will continue with no stop on this trade while lowering my T/P level to 15170. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
September BUND
My latest long 131.10 Bund position worked well as the market rallied to my 131.50 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 130.20/130.90 with a lower 129.75 lower ‘’Closing Stop’’.
Gold Rolling Contract
I am still long Gold from last Thursday at 1886. II will leave my 1900 T/P level unchanged. I will add to this position at 1870 with the same 1859 tight ‘’Closing Stop’’. 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. This morning Silver is trading higher at 22.75 from where I marked prices on Friday. I will continue to have no stop on this position. If this view changes I will email my Platinum Members
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