A boring session ended with a large rally in the last five minutes of trading to leave all three American Indexes end Monday’s session with a small gain. As earnings season continues, technology companies Apple (AAPL) and Amazon (AMZN) are set to report earnings after the market close on Thursday. Despite the expectation both companies will beat estimates, some investors are worried that tepid results could be the first domino to fall in a potential unravelling of the tech stock rally we have witnessed this year. However, positive forecasts from Meta Platforms (META) and strong results from Google parent Alphabet (GOOGL) last week have provided support for those who believe the high valuations of these mega-tech companies are justified. Friday’s U.S. jobs report for July is expected to reveal a stable labour market, with the Unemployment rate remaining historically low at 3.6%. The strength of the labour market has been a crucial factor in shaping the belief that the economy may avoid a sizable recession. Investor confidence was further boosted last week when Fed Chair Jerome Powell stated that the central bank’s staff no longer forecasts a U.S. recession, and there is potential for inflation to return to the 2% target without significant job losses. European Markets closed mixed. In the week ahead, investors will closely watch the Euro-Zone’s release of preliminary estimates for July inflation and second-quarter GDP, as the data may impact the debate on whether the European Central Bank will raise interest rates again in September. Inflation in the Euro-Zone remains above the ECB’s target, while the GDP data is expected to show a return to growth. The Bank of England (“BOE”) is scheduled to hold its latest rate-setting meeting on Thursday, and there is a division among market participants regarding whether policymakers will revert to a 25-basis point rate hike following the 50-bps hike in June. Although there are indications that widespread pricing pressures are starting to ease, inflation remained at 7.9% in June – notably, the highest among major economies, and well above the BOE’s 2% target. The BOE has faced recent criticism from investors for being perceived as behind the curve, as inflation has continued to climb higher than expected despite 13 consecutive rate increases since December 2021. This has raised concerns about the potential for a recession. In Asia, Chinese PMI data may point to a continued contraction in manufacturing activity, highlighting the need for stimulus measures to support the post-pandemic recovery in the world’s second-largest economy. However, policymakers are unlikely to implement aggressive stimulus measures due to mounting concerns over debt risks. Elsewhere, Oil rose 1.51% while Gold finished a quiet session with a 0.2% gain.
To mark my 2850th 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 47 points yesterday to end July with a small gain of 285 points, 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 3164 points in February, 4687 points in January 2054 points in December, 4789 points in November and 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 0.15% higher at a price of 4586.
The Dow Jones Industrial Average closed 100 points higher for a 0.28% gain at a price of 35,559.
The NASDAQ 100 closed 0.04% higher at a price of 15,757.
The Stoxx Europe 600 Index closed 0.17% higher.
This morning, the MSCI Asia Pacific closed 0.6% higher.
This morning, the Nikkei closed 0.92% higher at a price of 33,475.
Currencies
The Bloomberg Dollar Spot Index closed 0.2% lower.
The Euro closed 0.1% higher at $1.0995.
The British Pound closed 0.2% lower at 1.2825.
The Japanese Yen fell 0.7% closing at $142.71.
Bonds
Germany’s 10-year yield closed 2 basis points lower at 2.49%.
Britain’s 10-year yield closed 2 basis points lower at 4.31%.
U.S.10 Year Treasury closed 3 basis points lower at 3.96%
Commodities
West Texas Intermediate crude closed 1.51% higher at $81.77 a barrel.
Gold closed 0.2% higher at $1961.10 an ounce.
This morning on the Economic Front we have German Unemployment and Manufacturing PMI at 8.55 am. This is followed by Euro-Zone and U.K. Manufacturing PMI at 9.00 am and 9.30 am respectively. Next, we have Euro-Zone Unemployment at 10.00 am. At 2.45 pm we have U.S. Manufacturing PMI. Finally, at 3.00 pm we have JOLTS Job Openings, Construction Spending and ISM Manufacturing PMI.
Cash S&P 500
According to FactSet, the S&P Index is reporting a Y/Y earnings decline of -7.3% for Q2, 2023. This is the largest decline since Q2 2022 at -31.6% which of course was the start of COVID. Yes, there are some sectors that show growth but the aggregate is simply down. But nobody cares. ‘’Forward Looking’’ they are and the future is rosy as multiple expansion is the name of the game. Both media and analysts have bought into this scenario in a big way. While the Fed keep intervening on any sniff of a correction producing artificial prices that would not be real without this aggressive intervention. We are now entering a period where ‘’Bears’’ have seasonally the biggest opportunity to make something happen on the volatility front, between now and October. I am of course talking about a proper correction as indicated by the numerous overbought signals that I follow against a back ground of negative divergences. I am still short the S&P at an average rate of 4574 with the same 4560 T/P level. I will continue to have a 4808 ‘’Closing Stop’’ on this position. The best chance of any volatility this week will come after the close on Thursday when both Apple and Amazon report their earnings. With $1 trillion of debt issuances through the system in the last quarter alone we need a sell trigger. They are spending like we are in some sort of crisis which is boosting GDP growth artificially. If any of the above levels are hit I will be back with a new update for my Platinum Members.
EUR/USD
Ni Change. I am still long from Thursday at an average rate of 1.1030. I will leave my T/P level unchanged at 1.1070 with the same 1.0935 ‘’Closing Stop’’. If any of the above levels are hit I will be back with anew update for my Platinum Members.
June Dollar Index
The Dollar traded in a narrow range yesterday and I am still flat. This morning the Dollar is trading slightly higher at 101.95. We have support from 100.70/101.40. I will move my buy level higher to this range with a higher 100.15 tight ‘’Closing Stop’’.
Cash DAX
My DAX plan worked well. Shortly after I posted yesterday morning the DAX rallied to my 16525-sell level before trading lower to my revised 15478 T/P level and I am now flat. The DAX has further resistance from 16590/16670 where I will be a small seller with 16775 ‘’Closing Stop’’.
Cash FTSE
I am still flat. The FTSE had a small rally yesterday, closing over the key 7700 resistance level. I am still flat. I will now raise my buy level to 7580/7640 with a higher 7515 ‘’Closing Stop’’. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
No Change. The Dow had its second consecutive inside day following Thursday’s aggressive reversal lower. I am still short from Friday morning at 35368 with a now 35270 higher T/P level. I will add to this position at 35640 while leaving my 35805 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
No Change. The NDX closed flat yesterday following a quiet session. I am still short at an average rate of 15675. I will leave my 15905 ‘’Closing Stop’’ unchanged. I will now raise my T/P level on this position to 15605. If any of the above levels are hit I will be back with a new update for my Platinum Members.
September BUND
I am still flat as the Bund tries to consolidate last week’s rise in Yields. Today, I will continue to be a buyer on any dip lower to 131.50/132.30 with the same 130.75 ‘’Closing Stop’’.
Gold Rolling Contract
Although Silver traded higher, Gold traded in a narrow range. I am still flat. I am reluctant to chase Gold higher, preferring to leave my 1920/1935 buy level unchanged with the same 1909 ‘’Closing Stop’’.
Silver Rolling Contract
Silver rallied over 2% yesterday. I am still long from last Thursday at a rate of 24.60. I will continue to look to add to this position at 23.80. My T/P level remains unchanged at 25.30. I have no stop on this position and if this view changes I will be back with a new update for my Platinum Members
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