U.S. Indices closed higher on Friday amid trade optimism ahead of a key risk week. Sectors were predominantly firmer with outperformance seen in Materials, Industrials and Consumer Discretionary, while Energy, Communication, and Real Estate lagged. The outperformance in Materials was largely due to a solid earnings report from Newmont (NEM), while weakness in Communication was due to the large downside in Charter (CHTR) post-earnings. T-Notes were choppy on Friday, with downside in the morning following source reports that the Bank of Japan see an environment to hike rates by year-end, with lows seen after a less bad-than-feared durable goods print in the US. Nonetheless, upside then ensued after President Trump said he got a good impression from Fed Chair Powell on Thursday that he may be ready to lower rates. The President also spoke on trade, noting they are near a deal with China while the EU has a pretty good chance of a deal, but noted they may have to buy down their tariffs (similar to how Japan is investing USD 550 billion). However, for Canada, Trump warned that it may just be a tariff, not a negotiation. US data saw the aforementioned Durable Goods. In FX, the Dollar outperformed on trade optimism and better-than-expected data, while CAD lagged on the Trump trade warning. The Pound was hit by weak Retail Sales in the UK on Friday morning. Looking ahead, there are plenty of key risk events this week, including the US/China trade talks on Monday/Tuesday, as well as the August 1st trade deal deadline imposed by Trump. Elsewhere, the FOMC, BoC and BoJ rate decisions will be released, while data in the US sees PCE, GDP, ISM Manufacturing PMI and the July jobs report. There is also front-loaded supply on Monday and Tuesday, ahead of the Quarterly Refunding Announcement on Wednesday. It is also expected to be one of, if not the busiest, weeks of earnings season. Durable Goods fell 9.3% in May (prev. +16.5%), but not as deep as the expected decline of 10.8%. The headline was weighed by notable new order declines in transport equipment (-22.4%), nondefense aircraft and parts (-51.8%) and capital goods (-22.2%). Ex-transport rose 0.2%, above the expected 0.1%, with the prior revised up to 0.6% from 0.5%, while ex-defence fell 9.4% (prev. 15.5%, rev. 15.7%). Non-defence cap ex-air unexpectedly declined 0.7% (exp. +0.2%, prev. 1.7%, rev. 2.0%). Oxford Economics notes that a pullback in durable goods reflects three main forces: 1) Boeing received fewer orders following a bumper May, 2) defence capital goods orders eased, 3) a pullback in non-defence capital goods ex-aicraft, which, “We think partly reflects trade policy uncertainty”. Ahead, Oxford expects the impact of trade policy uncertainty and tariffs will drive outright declines in the second half, before the impact of business tax cuts drives a rebound in 2026. As expected, the ECB stood pat on Interest Rates last Thursday, keeping the deposit rate at 2%. The accompanying policy statement carried little interest, noting that incoming information is broadly in line with the Governing Council’s previous assessment of the inflation outlook. Additionally, the statement repeated the Bank’s meeting-by-meeting and data-dependent approach. At the follow-up press conference, when questioned about the recent EUR appreciation and VP de Guindos’ recent remark about the complications that EUR/USD breaching 1.20 would bring, President Lagarde stated that the ECB does not target FX levels but is monitoring the situation. Thereafter, Bunds were sent lower after Lagarde stated that the ECB’s baseline scenario from June still holds despite US President Trump since threatening the EU with a 30% tariff rate. This statement, allied with Lagarde reiterating that policy remains in a good place, is suggestive that policymakers are not in a rush to adjust policy. This point was also underscored by the President emphasising that the ECB will not be swayed by a temporary undershoot in inflation (current 2026 forecast sees inflation at 1.6%), adding that inflation is still expected to stabilise at target over the medium term. Note, Thursday’s decision was unanimous. Overall, the main message was that the ECB sees itself as well-positioned to deal with short-term turbulence from the trade war and geopolitics. That being said, markets continue to price around 17bps of loosening seen by year-end (vs. 21bps pre-announcement). Following the conclusion of the rate decision and the press conference, Bloomberg and Reuters sources hit the wires, but were largely in fitting with one another. BBG noted ECB official’s baseline for September is another hold in rates, and those seeking another rate cut will face a battle. Similarly, Reuters noted ECB policymakers set a high bar for a September rate cut, and such a move would require a deterioration in data and lower projections. Elsewhere, Oil 1.32% lower which risk-on saw Gold end Friday’s session with a 1.5% 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 170 points on Friday and is now ahead by 3405 points for July 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 0.4% higher at a price of 6388.
The Dow Jones Industrial Average closed 208 points higher for a 0.47% gain at a price of 44,901.
The NASDAQ 100 closed 0.23% higher at a price of 23,272.
The Stoxx Europe 600 Index closed 0.29% lower.
This Morning, the MSCI Asia Pacific closed 0.5% higher.
This Morning, the Nikkei closed 0.89% lower at a price of 41,073.
Currencies
The Bloomberg Dollar Spot Index closed 0.31% higher.
The Euro closed 0.25% lower at $1.1742.
The British Pound closed 0.87% lower at $1.3443.
The Japanese Yen fell 0.78% closing at $147.66.
Bonds
U.K.’s 10-Year Gilt closed 2 basis points lower at 4.63%.
Germany’s 10-Year Bund Yield closed 5 basis points higher at 2.71%
U.S.10 Year Treasury closed 1 basis points lower at 4.38%.
Commodities
West Texas Intermediate crude closed 1.32% lower at $65.16 a barrel.
Gold closed 1.5% lower at $3337.10 an ounce.
This morning on the Economic Front we already have Euro-Zone Sentix Investor Confidence at 9.30 am. The only other data of note is U.S. Factory Orders which will be released at 3.00 pm.
Cash S&P 500
The S&P 500 closed at new all-time highs again on Friday and this move higher continued overnight following the following announcement of a trade deal between the U.S. and the EU:
- US President Trump announced a deal with the EU involving a 15% tariff and stated the EU will buy USD 750bln in US energy and is opening up all countries, while he added the EU will purchase US military equipment and will make USD 600bln in US investments. Trump added that the deal is the biggest ever made and will be great for cars, as well as noted that agriculture is also to have a big impact. Furthermore, Trump said they are looking at deals with three to four other countries and countries will probably receive a letter of clarification or confirmation this week.
- European Commission President von der Leyen confirmed there will be 15% tariffs across the board and said the trade deal creates certainty and stability for businesses on both sides of the Atlantic. Von der Leyen said the deal reaffirms the transatlantic partnership and the 15% tariff rate is for a vast majority of EU exports including cars, semiconductors and pharmaceuticals, while she added that they agreed on zero-for-zero tariffs on certain agricultural products and on strategic products such as aircraft component parts and certain chemicals. Furthermore, she commented that tariffs will be cut and a quota system in place for steel, while there will be major purchases of US LNG and details on the trade deal framework will happen over the next few weeks.
- USTR Greer and Commerce Secretary Lutnick travelled to Scotland for the EU trade talks, while Lutnick stated the US will release the results of the Section 232 regarding chip imports in two weeks and separately commented that there are no more extensions to the August 1st deadline for tariffs.
- German Chancellor Merz said it is good that the EU and US reached a deal on tariffs and the deal avoids a conflict that would have hit the German economy, particularly in the autos sector, while Merz added that they protected their core interests even if he would have liked to see further facilitation of transatlantic trade.
The 14-Day RSI closed at an overbought 76 on Friday. This morning with the S&P trading 35 Handles higher from Friday’s Chicago close at a price of 6423 as I go to post sees the RSI at 78 while the S&P is now well outside the top of its Daily Bollinger Band. It is worth noting that when President Trump was announcing the Tariffs back on April 5, the rumour was a 10% tariff across the board. The S&P rallied to 5700 ahead of this rumour. Now that it looks like we will see a 15% tariff and higher across the board the S&P is trading over 700 Handles higher (from April 5) in what is now the most overvalued American Stock Market in history. It does not make sense to be a buyer here given the backdrop but as we know ‘’Markets can remain irrational longer than we remain solvent’’ certainly comes to mind. I am still short (and wrong) the S&P at 6334 as I cancelled my 6361 stop to my Platinum Members. Today, I will add to this position at 6430. I will have a 6451 ‘Closing Stop’ on this position. We have had an excellent month so far and this is why I am prepared to make a stance here. It is also worth noting that the Nikkei is trading 700 points lower from where I marked prices last Thursday. If I am taken short at 6430 I will move my T/P level on this position to 6360 and reassess if all of the above is triggered.
EUR/USD
I am still short the Euro at an average rate of 1.1710. This morning the Euro is trading lower at 1.1720. I will now lower my T/P level to 1.1630 while leaving my 1.1805 ‘Closing Stop’ unchanged. 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 an average rate of 97.65. I will leave my 96.75 ‘Closing Stop’ unchanged while lowering my T/P level to 98.10. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
The Russell has continue to surge since Thursday’s Daily Commentary was posted and I am still flat. This morning, the Russell is trading at 2280. We have resistance from 2295/2365 where I will be a seller with a 2415 ‘Closing Stop’. If I am taken short, I will have a T/P level at 2240. I no longer want to be long the Russell Index at this time.
FTSE 100
Wrong! I was stopped out of my latest 9010 average short position on Thursday at 9125 and I am now flat. The FTSE remains an analytical challenge. The market keeps squeezing and squeezing and I cannot give reason as to ‘WHY’ as the U.K Budget, Gilt Yields and the state of the economy are all a mess, yet the FTSE closed at a new all-time high on Friday. This morning the FTSE is trading at a price of 9170. I have gone short here with a T/P level at 9110. I will add to this position at 9240 with a higher 9305 ‘Closing Stop’. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
Thankfully the Dow hit my 44700 T/P level on my latest 44775 average short position and I am now flat. This morning the Dow is trading above 45100. We have short-term resistance from 45250/45500 where I will be a strong seller with a 45705 tight ‘Closing Stop’. If I am taken short, I will have a T/P level at 44980.
Cash NASDAQ 100
The NASDAQ 100 is also overbought on the monthly chart, with an RSI above 72 and trading above its upper Bollinger Band. Additionally, the price is rising while the RSI is forming a lower high—a divergence pattern similar to what occurred in 2018 and 2021. Overall, a lot is going on this week, yet the market appears overly complacent. Given the sheer volume of news flow, I would be genuinely surprised if volatility remains this tight for much longer. Overnight, the NDX rallied to my second sell level at 23400 for a now 23320 average short position. I will leave my 23505 ‘Closing Stop’ unchanged while raising my T/P level to 23250. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
Higher Treasury Yields saw the Bund trade lower to my 129.20 buy level. I am still long with a now lower 129.80 T/P level. I will continue to look to add to this position at 128.40 with a now lower 127.75 ‘Closing Stop’. If any of the above levels are hit, I will be back with a new update for my Platinum Members
Gold Rolling Contract
My Gold plan worked well as the market hit my 3312-buy level before rallying overnight to my 3334 T/P level and I am now flat. Gold has support below from 3275/3295 where I will again be a buyer with a lower 3259 ‘Closing Stop’. If I am taken long, I will have a T/P level at 3313.
Silver Rolling Contract
This morning, Silver hit my buy range for a now 38.00 long position. I will add to this trade at 37.20 while leaving the same 35.95 ‘Closing Stop’. I will now lower my T/P level to 38.80. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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