U.S. economic growth accelerated in the first quarter on a big boost from inventories and trade that offset slowdowns in consumer and business spending, with President Donald Trump touting the report as much stronger than expected. Gross Domestic Product expanded at a 3.2 percent annualized rate in the January-March period, according to Commerce Department data Friday that topped all forecasts in a Bloomberg survey calling for 2.3 percent growth. That followed a 2.2 percent advance in the prior three months. The first acceleration in GDP since mid-2018 reflected the largest combined boost since 2013 for two typically volatile components — inventories and trade — that could weigh on the economy later in the year. While steady wage gains and the Fed’s forbearance on interest-rate hikes will help make the expansion the nation’s longest on record in July, the fading impact of tax cuts and a global slowdown mean President Donald Trump’s goal of sustained 3 percent growth will still be difficult to reach. President Donald Trump said that his administration is withdrawing from a global arms treaty that set rules for sales and transfers of small arms, missile launchers and warships. “My administration will never surrender American sovereignty to anyone. My administration will never ratify the UN Arms Treaty,” Trump said Friday at a National Rifle Association conference in Indiana. “We’re taking our signature back.” The NRA, a key constituency for Trump, has long opposed the Arms Trade Treaty, saying it infringes on gun owners’ rights, even though the U.S. never ratified the agreement. In other news, Spain’s governing Socialists won their first general election since 2008 on Sunday but fell short of a majority as the conservative opposition suffered a disastrous night and the far-right made gains. The Socialists of prime minister Pedro Sánchez had won 122 seats with 92 per cent of votes counted, a vast improvement on the 85 seats they secured in 2016. However, they are likely to need the support of leftist and possibly nationalist parties in order to secure the 176-seat majority they need to govern. The conservative Popular Party (PP) had the worst result of its history as it saw its share of seats slashed almost by half to 65. It was almost overtaken by Ciudadanos, a rival party on the right which made ground with 57 seats.
To mark my 1825th 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@tradernoblecom for details
For anyone following my Platinum Service it made 32 points yesterday and is now ahead by 878 points for April, having made 1027 points in March, 1013 points in February, 1671 points in January, 2803 points in December, 1541 points in November and 2094 points in October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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Equities
Futures on the S&P 500 Index were little changed overnight after the underlying index rose 0.5 percent to close at a new record high on Friday at 2,939.88. However volume was again weak as yet again the Volatility Index failed to close lower. This is definitely a warning sign going forward. Meanwhile the Fear & Greed Index closed at 72 which is just below the key 75 pivot point which signals ‘’Extreme Greed’’.
Currencies
The yen was steady at 111.58 per dollar. After the New York close on Friday the CFTC released its latest Traders Report. The Euro shorts have increased their position to 120K which is the largest short position since December 2016. The Euro closed at $1.1149 on Friday little changed from Thursday’s close and it is where we are opening as I go to press. The Bloomberg Dollar Spot Index rose 0.1 percent for a new closing high for the year – to – date.
Bonds
The yield on 10-year Treasuries declined three basis points to 2.50 percent Friday as the spike higher to 2.60% is now completely reversed. This was despite the higher than expected US GDP Report.
Commodities
West Texas oil fell 0.6 percent to $62.90 a barrel while Gold was little changed at $1,286.14 an ounce. This morning on the Economic Front we have Euro-Zone Money Supply at 9.00 am. This is followed at 10.00 am by Euro-Zone Consumer Confidence, Business Climate and Economic Sentiment Indicator. Next we have US Personal Income/ Spending and the PCE Deflator at 1.30 pm. Finally, at 3.30 pm we have the Dallas Fed Manufacturing Index.
June S&P 500
Yet again the market closed at a new all-time high as the buy the dip shows no sign of slowing down. However a word of caution with the Daily Sentiment Index at such elevated levels. Just before the Chicago close on Friday the S&P traded higher to my initial 2942 sell level. I am not sure if many of you took this trade given that it happened so late on a Friday. When the Futures Market opened last night a touch lower at 2940 I am sure you would have covered any short position which is exactly what I did and I am now flat. As mentioned to my Platinum Members I am in Malaysia for the next 10 days playing in a touch rugby World Cup. As Malaysia is seven hours ahead of London it is difficult to keep an eye on markets after 4.00 pm and if you see any profit on my executed calls please take these gains as I will not be sending any updated emails after 4.00 pm. Today I will raise my buy level to 2920/2930 with a 2912 stop. The S&P has strong resistance from 2955/2965 and I will be a seller on any further rally to this area with a 2973 stop.
EUR/USD
I am still flat the Euro and I will continue to be a seller on any rally higher to 1.1200/1.1240 with a 1.1285 stop. Given the near record short position in the Euro per last Friday’s CFTC Report as mentioned above I will be a small buyer of the Euro from 1.1050/1.1090 with a 1.1015 stop.
June Dollar Index
No Change as I am still a seller on any further rally to 98.20/98.60 with a 98.95 stop. Given how severely overbought the Dollar is trading I no longer want to be a buyer of the Dollar at this time.
June DAX
Shortly after I posted on Friday the DAX rallied hard with the market closing just below the key 12400 resistance level. Ia am still flat and reluctant to chase this market higher. Today I will be a small buyer on any dip lower to 12190/12260 with a 12125 stop.
June FTSE
The FTSE fell short of my 7435 sell level before selling off. This is no surprise given how severely overbought the FTSE is trading. Sterling is a touch firmer as I go to press and today I will lower my FTSE sell level slightly to 7430/7470 with a 7505 stop.
Dow Rolling Contract
While both the S&P and NASDAQ have both closed at new all-time highs the Dow so far has stayed below its equivalent high from October 3 last year. As long as the Dow does not close over 26700 then we continue to have negative divergence which could be significant given the extreme DSI reading for both the NASDAQ and S&P at this time. Today I will lower my Dow sell level to 26750/26900 with a wider 27050 stop.
June NASDAQ
I am still flat the NASDAQ has the market just missed my sell level with its late rally into last Friday’s close. Today I will again raise my sell level slightly to 7870/7920 with a higher 7975 stop.
June BUND
No Change as I am still short at 165.55 with the same 165.45 T/P level and 166.05 stop. 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 Gold which again rallied late in Friday’s session. Today I will raise my buy level to 1265/1273 with a 1258 stop.
Silver Rolling Contract
Silver traded lower to my 14.95 buy level before rallying to my revised 15.07 T/P level and I am now flat. Today I will again be a buyer on any dip lower to 14.55/14.95 with the same 14.30 stop. If I am taken long I will have a T/P level at 15.10.
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