U.S. Indexes started the week predominantly lower as resumed US-Iran strikes over the weekend increased geopolitical and growth risk for the market. The NASDAQ 100, rallied into the close to settle with marginal gains. Higher oil prices accompanied the move, which added further upward pressure to the belly and long-end yields, with the 10 Year yield at its highest since January 2025. Sectors were mostly in the red, except Energy, which benefited from higher oil prices, and Tech, which eked out marginal strength, with Nvidia holding onto post-earnings gains from last week. Utilities underperformed after bearish sentiment built from Friday’s news that California lawmakers blocked proposed wildfire liability reforms; PG&E (PCG -20%) received multiple downgrades. Monday’s tape was filled with geopolitical developments following the preemptive US strike on Iranian missile launches over concerns of the placement of sea mines in the Strait of Hormuz. Iran responded via attacks on US bases in the region, to which Trump said the US will respond. Meanwhile, Treasury Secretary Bessent and Fed Chair Warsh spoke at the G20 finance meeting, yet little new was offered. Despite the move higher in oil and long-end yields, US 2 year and US 3 year yields settled slightly lower as markets still fall short of confidently forecasting a September rate hike. In FX, the Dollar seemingly tracked the move lower in short-end yields, with Barclays month rebalancing model indicating a moderate Dollar selling signal against all majors. This week, we may gain more insight on the policy path, with Fed’s Barr and Waller set to speak. Additionally, US data will be in focus: ISM PMIs, NFP, JOLTS, and ADP are all due. Spot Gold and Silver were little changed on the day. Geopolitical newsflow dominated the tape on Monday, with US-Iran relations continuing to deteriorate with no end in sight. Inflationary concerns will once again increase as US-Iran strikes resumed over the weekend due to a preemptive US strike on Iranian missile launchers over concerns of the placement of sea mines in the Strait of Hormuz. Tensions in the short term are likely to continue, as suggested by Trump saying the US will respond to the Iranian attacks on US bases in the region. Elsewhere, Oil closed higher by 3% while Gold ended Monday’s session with a loss of 0.5%.
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For anyone following my Platinum Service it was flat yesterday, ending the month of August with a gain of 2645 points after closing July with a gain of 8031 points, after ending June with a new record of 10527 points after ending May with a loss of 1104 points, having ended April with a gain of 1730 points, after ending March with a massive gain of 9002 points, having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, 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 previous 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 0.33% lower at a price of 7686.
The Dow Jones Industrial Average closed 374 points lower for a 0.70% loss at a price of 53,185.
The NASDAQ 100 closed 0.08% higher at a price of 29,456.
The Stoxx Europe 600 Index closed 0.62% lower.
This Morning, the MSCI Asia Pacific closed 0.2% higher.
This Morning, the Nikkei closed 0.18% higher at 66,430.
Currencies
The Bloomberg Dollar Spot Index closed 0.28% lower.
The Euro closed 0.24% higher at $1.1614.
The British Pound closed 0.12% higher at $1.3547.
The Japanese Yen rose 0.17% closing at $159.77.
Bonds
U.K.’s 10-Year Gilt closed 3 basis points higher at 5.07%.
Germany’s 10-Year Bund Yield closed 3 basis points higher at 3.32%
U.S.10 Year Treasury closed 3 basis points higher at 4.76%.
Commodities
West Texas Intermediate crude closed 2.99% higher at $85.99 a barrel.
Gold closed 0.56% lower at $4429.10 an ounce.
This morning on the Economic front we already had the release of German Retail Sales which fell 3.4% versus +0.4% expected. Next, we have German, Euro-Zone and U.K. Manufacturing PMI at 8.55 am, 9.00 am and 9.30 am respectively. At 10.00 am we have Euro-Zone CPI and Unemployment, followed by U.S. Manufacturing PMI at 2.45 pm. Finally, we have ISM Manufacturing, Construction Spending and JOLTS Job Openings at 3.00 pm..
Cash S&P 500
Stocks finished the day mostly lower, while rates finished the day mostly higher. The 10-year Treasury yield traded around 4.75%, moving us just that much closer to a potential push toward 5%. This week’s data could help bring the 10-year closer to that 5% level, but then again, a surge in oil could too. JOLTS and ISM Manufacturing come this afternoon, followed by ADP private payrolls on Wednesday, ISM Services on Thursday, and the jobs report on Friday. The totality of the data this week could potentially spark another move higher in the 10-year, especially given how low the bar is for job creation. The 10-year looks like a bull flag, and a pretty easily identifiable one, with a projection signaling a move to about 5.10%. The reason we should care about bond yields is that we are in a regime of negative correlation, meaning that a rise in bond yields tends to lead to a decline in stock prices. The correlation is measured using the daily changes in both rates and stocks. More importantly, the 120-day correlation shows that this relationship has been strengthening. The 2-year looks particularly vulnerable at this point, as it sits just below resistance near 4.4%. I think a breakout in the 2-year could set it on a path toward around 4.75%. Semiconductor implied volatility continued to get smashed and probably has further to fall after Broadcom reports results. We have been watching the correlation between semiconductor ETF implied volatility and the VIX move higher in recent days. This has served as a proxy and leading indicator for the implied correlation index, working fairly well. It would seem to suggest that implied correlations have further to climb. Ultimately, with this week being data-heavy, there is downside risk in the S&P 500, given that the put wall resides around 7,500, implied volatility is likely to rise heading into the jobs report, Treasury yields are rising, and the semiconductor sector continues to look weak. It certainly would not be a big deal if the Index fell to 7,500; it would just push us back to where the Index stood on July 31. Now that today is the start of September hopefully we will see some two-way price action as this has practically been non-existent for the month of August. Today, I will continue to be a seller of any further rally to 7740/7765 with a lower 7786 ‘Closing Stop’. Meanwhile, I will continue to be a strong buyer from 7605/7630 with the same 7578 ‘Closing Stop’. If I am taken short, I will have a T/P level at 7715. If I am taken long, I will have a T/P level at 7663. If any of these views change, I will be back with a new update for my Platinum Members.
EUR/USD
With London closed for its latest Bank Holiday trading especially in Europe was lackluster to say the lease. I am still flat the Euro as the market again traded in a narrow range. The Euro has short-term support from 1.1410/1.1490 where I will continue to be a small buyer with the same 1.1345 ‘Closing Stop’. I will now lower my sell level to 1.1660/1.1740 with a lower 1.1815 ‘Closing Stop’. If I am taken long, I will have a T/P level at 1.1560. If I am taken short, I will have a T/P level at 1.1600.
Dollar Index
I am still long from last Friday at a price of 99.40. I will add to this position at 98.70 while leaving my 96.95 ‘Closing Stop’ unchanged. I will now lower my T/P level to 99.90. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
The Russell closed 0.6% lower on Monday and I am still flat as the market never came close to my sell range. I will now lower my sell level to 3020/3090 with a lower 3155 ‘Closing Stop’. If I am taken short, I will have a T/P level at 2970.
FTSE 100
With U.K. Markets closed there was little or no price action in the Futures Market. The FTSE has short-term support from 10630/10710 where I will continue to be a buyer with the same 10555 ‘Closing Stop’. If I am taken long, I will have a T/P level at 10790.
Dow Rolling Contract
I am still flat. The Dow continues to trade in narrow ranges with little or no price action seen for the whole month of August. Today, I will lower my sell level to 53750/54050 with a lower 54305 ‘Closing Stop’. If I am taken short, I will have a T/P level at 53480. I still do not 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
I am still flat. Today, I will raise my buy level to 29020/29220 with a higher 28895 ‘Closing Stop’. If I am taken long, I will have a T/P level at 29380. I still do not want to be short the NDX at this time.
December BUND
Higher bond yields saw the Bund hit my second buy level at 123.30 for a now 123.65 average long position. I will leave my 122.65 ‘Closing Stop’ unchanged while lowering my T/P level to 124.10. 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. Today, I will continue to be a small buyer on any further retracement to 4300/4380 with the same 4225 ‘Closing Stop’. If I am taken long, I will have a T/P level at 4470. If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
I am still flat. Silver has further support below from 60.30/63.30 where I will be a buyer with the same 57.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 65.15.
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