Most U.S. stocks fell as trade concerns countered strength in the tech sector. Treasuries declined with Gold after investors eased back bets on a deep cut to interest rates next month. The S&P 500 dropped for a fourth-straight day, with three stocks retreating for every two that rose. The benchmark swung between gains and losses for most of the afternoon session as investors weighed mixed messages on trade heading into this weekend’s highly-anticipated meeting between Presidents Donald Trump and Xi Jinping. The Nasdaq Indexes advanced, even as Facebook Inc. and Google fell after Trump said the U.S. “perhaps” will sue the two companies. Micron Technologies Inc.’s profit topped estimates, spurring the Philadelphia Semiconductor Index to the highest level in more than a month. Ten-year Treasury Yields pushed back above 2%, and Gold retreated as investors continued to digest rate-cut comments Tuesday by Federal Reserve officials that didn’t match market expectations. The US Dollar was little changed versus major peers, while West Texas crude rose toward $60 a barrel.
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Equities
The trade spat between the U.S. and China is looming large for investors ahead of this weekend’s meeting at the Group of 20 conference. Trump once again threatened Wednesday substantial additional tariffs if a deal can’t be reached. Meanwhile, many traders hope the Federal Reserve will counter any headwinds to global growth with deep interest-rate cuts, though Fed member James Bullard made clear Tuesday that’s not a given. U.S. Futures spiked higher yesterday morning after a CNBC report that Treasury Secretary Steven Mnuchin said a trade deal was 90% done. The report was corrected to indicate that the comments referred to May. The S&P 500 Index fell 0.1% to close at 2914, 50 Handles below last Friday’s new all-time high. The Nasdaq composite gained 0.3%, while the Nasdaq 100 advanced 0.5%. The Stoxx Europe 600 Index declined 0.3% while the Nikkei closed overnight with a gain of 1.19% at 21,338.
Currencies
Here is a summary of the main changes in F.X. Markets:
The Bloomberg Dollar Spot Index was little changed.
The Euro rose 0.1% to $1.1376.
The British pound fell 0.1% $1.2677.
The Japanese yen dipped 0.4% to 107.67 per dollar, the weakest in a week.
Bonds
US Treasuries did not stay below 2.00% for very long with the yield on 10-year Treasuries rising six basis points to close at 2.05%. In Europe, Germany’s 10-year yield gained two basis points to -0.301% and Britain’s 10-year yield increased three basis points to 0.819%.
Commodities
West Texas Intermediate crude gained 2.3% to $59.17 a barrel, the highest in more than four weeks. Gold fell 0.4% to $1,413.40 an ounce, the first retreat in more than a week. Elsewhere, Bitcoin surged above $13,000 to the highest since January 2018.
This morning on the Economic Front we have Euro-Zone Industrial Confidence and Business Climate at 10.00 am. This is followed at 1.00 pm by German CPI. At 1.30 pm we have US GDP, Weekly Jobless Claims and Personal Consumption/Expenditure. Finally, at 3.00 pm we have Pending Home Sales.
September S&P 500
Thanks to the wrong report from CNBC on a 90% Trade Deal being accomplished the S&P spiked higher which enabled me to cover my average 2930 long position at 2932. Subsequently I emailed my Platinum Members to re-buy the S&P at 2918 and after this was filled to exit this position for a small gain at 2921 and I am now flat. Despite the fact that long-term I am bearish of the market I still believe we will eventually hit my 3050/3100 target level for the S&P before the real bear market for stocks begins. Today I will again look to buy the S&P on any dip lower to 2910/2920 with a 2902 stop. Ahead of the G-20 tomorrow I still do not want to be short the market at this time.
EUR/USD
The Euro traded in a narrow range yesterday and I am still flat. I will leave my 1.1280/1.1320 buy level unchanged with the same 1.1245 stop. I am still a small seller on any rally higher to 1.1410/1.1450 with a 1.1485 stop.
September Dollar Index
I am still flat the Dollar and today I will now raise my buy level to 95.10/95.50 with a 94.70 stop.
September DAX
The DAX just missed my buy level after I posted yesterday morning before spending the rest of the day trading sideways/higher. Today I will raise my buy level to 12140/12210 with a 12080 stop.
September FTSE
I am still flat the FTSE as I continue to look to buy the market on any dip lower to 7280/7320 with a 7245 stop.
Dow Rolling Contract
Unfortunately the Dow just missed my 26460 buy level with a 26500 low print overnight and I am still flat. The buy the dip continues with the Dow trading at 26620 this morning as market nearly always rises into a key event. Today I will raise my Dow buy level to 26380/26530 with a 26295 stop.
September NASDAQ
Shortly after I posted yesterday morning the NASDAQ rallied to my 7652 T/P level on my latest 7645 long position and I am now flat. Having been the weakest of the US Indices on Tuesday, yesterday saw the NASDAQ close 0.5% higher. Today I will again be a buyer on any dip lower to 7600/7650 with a 7555 stop.
September BUND
The Bund continues to trade with a 172 Handle which it has done for most of the past three weeks. I am still flat as the market fell short of my 172.98 sell level before following the US Treasuries in selling off 50 points. Today I will lower my sell level to 172.60/173.00 with a 173.35 stop.
Gold Rolling Contract
On Monday evening the Daily Sentiment Index closed with a reading of 96% bulls. This is the highest degree of trader optimism since August 22, 2011. Spot bullion peaked on September 5-6, 2011 (close and intra-day). Prices have not been higher since. It is no wonder that we saw a $40 fall in Gold over the past 36 hours. Today I will continue to be an aggressive buyer from 1380/1390 with the same 1369 stop. Despite the high DSI readings I still do not want to be short Gold at this time.
Silver Rolling Contract
No Change as I am still long Silver at a price of 15.37 with the same 15.05 tight stop. I will leave my T/P level unchanged at 15.50 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
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