U.S. Equity Markets saw strength on Wednesday (SPX +0.4%, NDX +0.6%, RUT +1.3%) in what was a day of choppy price action, as most sectors settled in the green with Consumer Discretionary and Materials outperforming and only Financials in the red. The Dollar Index was weaker, to the benefit of G10 FX peers, and saw a low of 100.920 after the FOMC Minutes, which continued to illustrate it is not a question of when the Fed cuts rates, but more by how much. As such, the Minutes continued to highlight the recently conveyed message from the Fed, as a “vast majority” observed that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting, while “several participants” said recent progress on inflation and increases in the unemployment rate provided a ‘plausible case’ for a 25 basis point cut at July’s meetings. Treasuries bull-steepened and saw gains across the curve in the wake of BLS revisions and the aforementioned FOMC Minutes, while the average US 20 Year bond auction garnered little reaction. On the former, BLS payrolls were revised lower by 818k, suggesting job growth was not as strong as previously thought between April 2023 and March 2024. Elsewhere, WTI and Brent were lower, extending on Tuesday’s weakness, as the Chinese economy/demand continues to weigh with geopolitics in the background. Looking ahead, US Flash S&P Global PMIs and Initial Jobless Claims are the highlights on Thursday, followed by the eagerly awaited Chair Powell press conference on Friday at Jackson Hole. The 30-31st July FOMC Minutes largely echoed what we heard from Fed Chair Powell in the post-meeting press conference and from Fed officials since, as the Minutes highlighted how the Committee is looking at a September rate cut and the data-dependant approach. Highlighting this, the Minutes noted the vast majority of participants said it would likely be appropriate to ease policy at the next meeting if data continued to come in as expected. At the July meeting, several participants said recent progress on inflation and increases in the unemployment rate provided a ‘plausible case’ for a 25bps cut or that they could have supported such a move. As a reminder, Powell in the press conference after the meeting said, “there was a real discussion about the case for reducing rates at this meeting; a strong majority supported not moving at this meeting”. Meanwhile, the majority of participants said risk to the employment goal has increased, and many noted risks to the inflation goal decreased, reiterating the Fed’s message of how their attention has shifted to both sides of the mandate, and almost more to the employment side, rather than just inflation. The BLS payrolls were revised lower by 818k, suggesting job growth was not as strong as previously thought between April 2023 and March 2024, and came in closer to the bottom end of Goldman Sachs expectations of between 0.6-1 million downward revisions. That means so rather than the economy adding 2.9million jobs in the 12-month period, there were only 2.1 million new jobs. On a monthly footing, it means only 178k jobs were added instead of the initially reported average of 246k. As such, ING notes, given everything was weak in the latest July jobs report (weak payrolls, rising unemployment, falling hours worked, and cooling wages) the revisions yesterday will only put more pressure on the Fed to loosen monetary policy. Even further the bank adds, momentum is being lost from an even weaker position than originally thought. Note, money market pricing currently has 34bps of cuts priced in for September and 105bps by year-end, but all focus turns on Chair Powell at Jackson Hole on Friday, and thereafter the next BLS jobs report on September 6th, the day of Fed blackout before the next FOMC meeting. Elsewhere, Oil closed 1.69% lower while Gold ended Wednesday’s session flat.
To mark my 3050th issue of TraderNoble Daily Commentary I am offering a special 2-Year rate of Euro 2750 for my Platinum Service which includes 1 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 260 points yesterday and is now down by 1563 points for August after closing July with a gain of 1918 points while June closed with a gain of 2074 points, having made 1843 points in May. The Platinum Service made 4010 points in April after ending March with a gain of 2113 points. February closed with a gain of 1606 points, after closing January with a gain of 3675 points. December saw a gain of 1890 points after finishing November with a gain of 1734 points. October ended with a gain of 3184 after closing September with a small gain of 228 points, after finishing August with a gain of 1485 points, 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 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 0.42% higher at a price of 5620.
The Dow Jones Industrial Average closed 55 points higher for a 0.14% gain at a price of 40,890.
The NASDAQ 100 closed 0.53% higher at a price of 19,824.
The Stoxx Europe 600 Index closed 0.33% higher.
Yesterday, the MSCI Asia Pacific closed 0.4% lower.
Yesterday, the Nikkei closed 0.29% lower at a price of 37,951.
Currencies
The Bloomberg Dollar Spot Index closed 0.29% lower.
The Euro closed 0.15% higher at $1.1146.
The British Pound closed 0.3% higher at 1.3085.
The Japanese Yen rose 0.1% closing at $145.19.
Bonds
Germany’s 10-year yield closed 2 basis points lower 2.20%.
Britain’s 10-year yield closed 1 basis points lower at 3.90%.
U.S.10 Year Treasury closed 2 basis points lower at 3.80%.
Commodities
West Texas Intermediate crude closed 1.69% lower at $71.93 a barrel.
Gold closed 0.1% lower at $2510 an ounce.
This morning on the Economic Front we have German, Euro-Zone and U.K. Manufacturing PMI at 8.30 am, 9.00 am and 9.30 am respectively. Next, we have the Minutes from last Month’s ECB Meeting at 12.30 pm, followed by U.S. Weekly Jobless Claims at 1.30 pm. At 2.45 pm we have U.S. Manufacturing PMI, followed by Existing Home Sales at 3.00 pm. Finally, we have the Kansas City Fed Manufacturing Activity Index at 4.00 pm.
Cash S&P 500
My S&P plan worked well as the market rallied to my 5623-sell level before trading lower to my 5597 T/P level and I am now flat. Wednesday was the ninth up-day out of the past 10 trading sessions helping the Index to get even more overbought. The S&P continues to subdivide higher. Some measures of sentiment are becoming extreme. The ISE Sentiment Indicator (all equities) is complied by the International Securities Exchange and only measures opening long customer transactions on ICE, excluding market makers and investment firms. A high value indicates more ‘’Calls’’ than ‘’Puts’’ are being purchased, which reflects a bullish view by investors. Extremes in bullishness are a bearish sign for prices just as extremes in pessimism are a bullish sign for prices. Tuesday’s reading in the ISE Sentiment Index was the highest in several years. Investors are amped up on stocks. There is still aways to go to get to new all-time highs so the rally may not be over yet. So much optimism is now priced into Powell’s Jackson Hole speech tomorrow at 3.00 pm. The S&P has further resistance from 5641/5662 where I will again be a strong seller with a higher 5675 ‘’Closing Stop’’. If triggered, I will have a T/P level at 5615. I still do not want to be long the S&P at this time.
EUR/USD
The Euro traded higher to my second sell level at 1.1160 for a now 1.1120 average short position. I will leave my 1.1205 ‘’Closing Stop’’ unchanged while raising my T/P level to 1.1070. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
The Dollar Index has come to an important short-term juncture. Wednesday’s intraday low at 100.92 is just above the 100.62 intraday low of December 28, 2023. With the Daily Sentiment Indicator closing below 20 last night there is every chance that Wednesday’s low be significant. The Dollar hit my 101.20 buy level. I am still long, and I will add to this position at 100.60 while leaving my 99.95 ‘’Closing Stop’’ unchanged. I will now lower my T/P level tom 101.80. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
No Change: I am going to stay flat the DAX as I have no edge in this market at the moment. August has been the toughest month for my Platinum Service since I started writing my Daily Commentary over 11 years ago in February 2013. I will stay flat the DAX until I feel my edge has returned. If this view changes, I will be back with a new update for my Platinum Members.
Cash FTSE
No Change: The FTSE continues to consolidate the gains from the end of last week and I am still flat. This morning the FTSE is trading unchanged at 8265. I will not chase the FTSE higher as I continue to look to buy the market on any dip lower to 8130/8210 with the same 8065 tight ‘Closing Stop’’. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
I am still flat the Dow with the market trading less than 1% from all-time highs. This is hard to fathom given the price action over the past six weeks, but these are the markets we have. Today, I will continue to be a seller on any further rally to 41050/41300 with the same 41505 wider ‘’Closing Stop’’. If triggered, I will have a T/P level at 40780. Given how extended the Dow is trading I no longer want to be a buyer of the Dow at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
Yesterday’s initial rally saw the NDX hit my second sell level at 19840 for a now 19750 average short position. I will leave my 20005 ‘’Closing Stop’’ unchanged while raising my T/P level to 19630. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
September BUND
No Change: I am still flat the Bund as the market again traded in a narrow range on Wednesday. The Bund has support below from 133.00/133.70 where I will continue to be a buyer with the same 132.35 ‘’Closing Stop’’. The Bund has resistance from 135.50/136.20 where I will still be a seller with the same 136.85 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 134.30. If I am taken short, I will have a T/P level at 134.95.
Gold Rolling Contract
No Change: Gold continues to hold the 2500 support level. Seasonally September can be a difficult month for both Gold and Silver, hence my reluctance to chase the Gold market higher. Today I will continue to be a buyer on any dip lower to 2450/2465 with the same 2437 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2484.
Silver Rolling Contract
I am still flat Silver as I look for the market to play catchup with Gold’s aggressive move higher over the past two months. Silver hit a low at 29.20 yesterday before having a small rally into the New York close. Today, I will continue to be a buyer from 28.00/28.90 while leaving my 26.29 wider ‘’Closing Stop’’ unchanged. If I am taken long, I will have a T/P level at 29.70.
Please note: There will no Daily Commentary tomorrow. Any of my calls that are not hit today and are subsequently triggered on Friday will see me return with updated emails for my Platinum Members.
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