U.S. Indexes closed mixed on Friday with the NASDAQ 100 underperforming. Weakness in technology stocks continued following earnings, while the S&P 500 was broadly flat. Intel (INTC) reversed its initial post-earnings gains as elevated CapEx weighed on the stock and broader semiconductor space. However, underlying breadth was considerably more constructive, with the Russell 2000 and Dow gaining, while the equal-weight S&P outperformed. Crude prices pared some of the sharp gains seen throughout the week, with Brent falling sub USD 97.00/ Barrel after reaching USD 102/Barrel on Thursday. The weakness appeared to reflect some position squaring ahead of the weekend rather than a meaningful improvement in the geopolitical backdrop. There were several reports of note but in late trade President Trump stated he has not yet made up his mind on whether or not to conduct massive strikes on Iran, noting he always prefers to settle things diplomatically. He also noted that the US and Iran are talking, and he sees them as the most serious they have ever been. Treasuries rose across the curve as the sharp pullback in crude helped unwind some of the pronounced selling seen earlier in the week. The belly outperformed, while moves were more modest at the long end. Economic data was encouraging but had little lasting impact. The S&P Global Flash Composite PMI beat, driven by stronger services activity, although manufacturing unexpectedly eased. The report suggested GDP is growing at around a 2.0% annualised pace but also warned of intensifying supply-chain delays and renewed price pressures. In FX, moves were relatively contained, with the Dollar Index little changed. Antipodeans outperformed despite the mixed equity performance, with NZD leading the gains and AUD also firmer, while CAD lagged as crude prices tumbled. The Yen was broadly unchanged following Nikkei reports suggesting the Bank of Japan is set to hold rates next week, despite some policymakers calling for further tightening following June’s hike. Gold rose modestly despite the relatively steady Dollar, likely finding some support from lower Treasury yields. Attention now turns to developments in the Middle East over the weekend before focus shifts to this week’s FOMC decision and Fed Chair Warsh’s press conference. A hold remains the base case, although markets continue to price some risk of a hike following the recent surge in energy prices. The BoJ and June US PCE inflation report will also be key events this week. The US Composite PMI rose to 53.6 in July (exp. 52.3, prev. 51.9), an eight-month high, as a sharp improvement in services offset softer manufacturing activity. The Services PMI increased to 53.6 (exp. 51.0, prev. 51.2), also an eight-month high, while the Manufacturing PMI edged down to 53.8 (exp. 54.5, prev. 53.9), with manufacturing output growth slowing to a four-month low. S&P Global said the survey is consistent with annualised GDP growth of around 2.0%, compared with the 1.2% pace signalled for Q2, while employment increased for the first time in three months. However, inflationary signals were concerning, with input cost inflation reaching a 14-month high and selling price inflation accelerating to its strongest since August 2022, while supplier delivery times deteriorated by the most since August 2022 amid disruption around the Strait of Hormuz. S&P Global cautioned that recent developments in the Middle East could exacerbate supply-chain and price pressures and increase downside risks to the near-term economic outlook, suggesting July’s improvement may not mark the start of a sustained acceleration in growth. US New Home Sales rose 1.6% in June to 628k, above the expected 609k. Supply was 9.3 months at the current sales rate, vs. May’s 9.4 months worth. The median sales price of new houses sold was USD 398,300, -3.3% M/M. Oxford Economics note that new home sales were a touch stronger than they expected, and past months were revised higher, but the broader picture is still mostly one of stability rather than improvement. The hit to households’ real incomes and a renewed rise in mortgage rates will keep housing market activity soft. Elsewhere, Oil closed lower by 3% while Gold recovered some of Thursday’s losses with a 0.70% gain.
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For anyone following my Platinum Service it made 130 points on Friday and is now ahead by 6036 points for July after ending June with a new record of 10527 points after ending May with a loss of 1104 points, having ended April with a gain of 1730 points, after ending March with a massive gain of 9002 points, having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points 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 previous 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
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