U.S. Indices were choppy throughout the day but ultimately finished Wednesday’s session flat-to-slightly-higher, with outperformance in the NASDAQ, thanks to a solid showing in the Communication Sector, with strong gains in Meta (META), while Google (GOOGL) pared some of its prior day’s weakness. Note, Apple (AAPL) saw slight losses after a downgrade at Needham (which gave no price target). Energy and Utilities were the laggards. T-notes were bid across the curve, with a flatter bias, as direction was primarily influenced by weak US data. The soft ADP and soft ISM Services PMI saw T-notes climb higher throughout the session. The data also led to Dollar weakness while havens (JPY, CHF and XAU) were bid on increased economic fears in the US. Meanwhile, the CBO revised down its deficit impact estimate of Trump’s ‘big, beautiful’ bill, which also gave Treasuries a helping hand on reduced fiscal pressures. Energy prices ultimately settled lower, paring the morning’s geopolitically-induced upside on sourced reports from Bloomberg, which said that Saudi Arabia is pushing for more production hikes in August and potentially September too. Attention largely looks to Friday’s key risk events, including the US NFP and Trump-Xi call. ISM Services for May unexpectedly fell into contractionary territory, as it printed 49.9 (exp. 52.0, prev. 51.6), while prices paid rose to 68.7 from 65.1, which signals businesses are seeing a rapid rise in costs as the full effect of tariffs takes hold. Business activity and new orders dropped to 50.0 (previously 53.7) and 46.4 (previously 52.3), respectively. Employment lifted back into expansionary territory as it came in at 46.4 from 49.0. Inventories, Backlog of orders, and new export orders all declined and remain beneath 50.0, with the former falling into that territory. Within the respondents’ answers, as expected, tariffs were heavily mentioned and the comments indicate suppliers are mostly passing the tariffs on to customers rather than sharing the burden. Overall, Oxford Economics notes that after an initial surge in front-loaded demand, uncertainty is paralysing many businesses and halting new orders as customers navigate tariff policy. The consultancy adds that while one month’s reading does not make a trend, the report does support their forecast for slow growth and higher inflation throughout the year. Ahead of the US payrolls report on Friday, ADP national employment was weak as the pace of hiring reached its lowest level since March 2023. The headline added just 37k private jobs for May, against the prior 60k and the expected 110k. Note, that the bottom end of the forecast range was 69k. Median change in annual pay remained at 4.5% for job stayers, while job changers ticked higher to 7.0% from 6.9% in April. ADP Chief Economist, Nela Richardson, said “After a strong start to the year, hiring is losing momentum. Pay growth, however, was little changed in May, holding at robust levels for both job-stayers and job-changers.” For the record, after the report, US President Trump posted on Truth “ADP NUMBER OUT!!! “Too Late” Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!”. ADP release comes ahead of NFP on Friday, whereby the headline is currently seen at 130k (previously 177k). The Bank of Canada left rates on hold at 2.75%, the midpoint of the BoC’s estimate of the neutral rate range (2.25-3.25%), disappointing those expecting a 25bps rate cut, although the majority had expected rates to be left unchanged. The BoC said it held the policy rate as it wanted to gain more information on US trade policy and its impacts. It noted that it was proceeding carefully. Governor Macklem highlighted that there was a clear consensus to hold as they await more information. The statement noted that the economy is expected to be considerably weaker in Q2 vs Q1 while noting that inflation has moved up and that recent surveys indicate households continue to expect that tariffs will raise prices, and many businesses say they intend to pass on the costs of higher tariffs. Looking ahead, the BoC continues to provide no guidance, noting it “will continue to assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs” – seemingly indicating that it is focused more on inflation. Looking ahead, money markets are currently split on whether the BoC will reduce rates in July, as markets await more information to assess how the BoC will react. Governor Macklem noted specifically that it will be looking at the next two CPI reports, adding that policymakers do not want to focus too closely on one month’s data. Through the end of this year, 37bps of easing is priced by money markets, which fully discounts one rate cut, with a 50/50 probability of another. Elsewhere, Oil closed lower by 0.62% while a weaker Dollar saw Gold end Wednesday with a gain of 0.7%.
To mark my 3200th 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 was flat yesterday and is still ahead by 855 points for June, 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 0.01% higher at a price of 5971.
The Dow Jones Industrial Average closed 91 points lower for a 0.22% loss at a price of 42,427.
The NASDAQ 100 closed 0.27% higher at a price of 21,721.
The Stoxx Europe 600 Index closed 0.47% higher.
This Morning, the MSCI Asia Pacific closed 0.4% lower.
This Morning, the Nikkei closed 0.51% lower at a price of 37,554.
Currencies
The Bloomberg Dollar Spot Index closed 0.53% lower.
The Euro closed 0.37% higher at $1.1414.
The British Pound closed 0.21% higher at $1.3551.
The Japanese Yen rose 0.81% closing at $142.75.
Bonds
England’s 10-Year Gilt closed 1 basis points lower at 4.61%.
Germany’s 10-Year Bund Yield closed 2 basis points lower at 2.51%
U.S.10 Year Treasury closed 11 basis points lower at 4.36%.
Commodities
West Texas Intermediate crude closed 0.62% lower at $63.02 a barrel.
Gold closed 0.71% higher at $3376.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone and U.K. Construction PMI at 8.30 am, 9.00 am and 9.30 am respectively. This is followed by Euro-Zone PPI at 10.00 am. Next, we have the ECB Rate Announcement at 1.15 pm followed by the Lagarde Press Conference at 1.45 pm. At 1.30 pm we have U.S. Weekly Jobless Claims, Trade Balance and Non-Farm Productivity. Finally, we have speeches from Fed Members Kugler, Schmid and Harker at 5.00 pm, 6.30 pm and 6.35 pm respectively.
Cash S&P 500
The S&P finished flat on the day despite the Dollar and Interest rates falling sharply following weaker-than-expected ADP and ISM services reports. Notably, the ISM report revealed a surging prices paid index, which climbed to 68.7, the highest reading since November 2022. Still, that was not enough to offset the weaker-than-expected headline ISM services reading, which came in at 49.9 versus estimates of 52, and the ADP report, which showed just 37,000 jobs created in May against estimates of 110,000. These likely place additional importance on this afternoon’s Continuing Claims data and, more significantly, the jobs report on Friday. Continuing Claims have been steadily rising, and this trend is likely to come into sharper focus today as well. This ended up sending the 10-year rate lower by nearly 11 bps on the day, closing at 4.35%, and pushed the Dollar Index down by 41 bps. Should this trend continue, it will likely bring the US/JGB interest rate differential back into focus, as the spread between the US 10-year and the 10-year JGB fell by 14 bps to 2.84%, placing it back near a critical support level. A break of support in the interest rate spread would likely result in a decline in USDJPY, potentially pushing it below 140. There used to be a correlation between the USDJPY and NASDAQ 100 Index, but that relationship appears to have weakened recently, and the reason for this is unclear. It might be that we won’t fully understand the reason until the USDJPY drops below the critical 140 level. For now, 140 has been a solid barrier for the USDJPY. Against this background it is hard to see the S&P break back above the key 6020 resistance level. Internally the market is weak with the McClellan Oscillator still in negative territory despite the S&P close to all-time highs. With key economic data due to be released this afternoon ahead of Non-Farm Payrolls tomorrow I will not chase the S&P lower. Therefore, I will continue to be a seller from 6005/6025 with the same 6041 tight ‘Closing Stop’. The S&P has short-term support from 5890/5910 where I will continue to be a buyer with the same 5875 ‘Closing Stop’. If I am taken short, I will have a T/P level at 5987. If I am taken long, I will have a T/P level at 5935. If any of these views change I will be back with a new update for my Platinum Members.
EUR/USD
The Euro continues to attract mild selling above 1.1420. I am still flat. The Euro has short-term resistance from 1.1480/1.1560 where I will be a seller with a 1.1635 ‘Closing Stop’. My only interest in buying the Euro is on a large move lower to 1.1140/1.1220 with the same 1.1035 wider ‘Closing Stop’. If I am taken long, I will have a T/P level at 1.1290. If I am taken short, I will have a T/P level at 1.1420.
Dollar Index
I am still long the Dollar from Monday at an average rate of 99.10. I will leave my ‘Closing Stop’ unchanged at 98.45. Meanwhile, I will also leave my 99.50 T/P level unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
There is no doubt but Wednesday was one of the most boring sessions for equity markets in many weeks. I am still flat the Russell as I continue to be a strong buyer on any further dip to 2000/2060 with the same 1945 ‘Closing Stop’. If I am taken long, I will have a T/P level at 2105.
FTSE 100
The FTSE traded sideways over the past 24 hours and I am still flat. The FTSE has strong resistance from 8850/8920 where I will be an aggressive seller with the same 8985 ‘Closing Stop’. If I am taken short, I will have a T/P level at 8795. I still have no interest in buying the FTSE at this time.
Dow Rolling Contract
The Dow was the weakest of the main American Indexes on Wednesday. I am still flat as the market again fell shy of my sell range before falling 200 points into the close. Ahead of tomorrow’s key NFP Report, I will leave my 42750/43000 sell level unchanged with the same 43205 ‘Closing Stop’. The Dow has short-term support below from 41850/42100 where I will be a small buyer with a 41695 tight ‘Closing Stop’. If I am taken short, I will have a T/P level at 42530. If I am taken long, I will have a T/P level at 42330.
Cash NASDAQ 100
The NDX continues to build upward momentum as my ‘Nothing Matters’ theme continues. I am still short the NDX from Tuesday at a price of 21650 with the same 21540 T/P level. I will add to this trade at 21850 while leaving my ‘Closing Stop’ unchanged at a price of 22005. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
December BUND
The boring sideways price action in the Bund continues as we wait for the ECB Rate decision at 1.15 pm. Today, I will continue to be a buyer on any dip lower to 129.50/130.30 with the same 128.75 ‘Closing Stop’. If I am taken long, I will have a T/P level at 131.10. I still do not want to be short the Bund at this time.
Gold Rolling Contract
No change: I am still flat. Gold is severely overextended and has strong resistance above 3400. Today, I will continue to be a seller from 3420/3445 with the same 3471 ‘Closing Stop’. If I am taken short, I will have a T/P level at 3395.
Silver Rolling Contract
I am still flat. This morning, Silver is trading unchanged at a price of 34.40. I will not chase the market higher as I continue to be a buyer on any dip lower to 32.90/33.80 with the same 31.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 34.60.
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