U.S. Equity Markets closed higher yesterday, although the upside was predominantly led by large caps with Tech and Consumer Discretionary stocks outperforming while the majority of sectors were red with the most downside observed in Materials, Industrials, and Real Estate. The Russell2000 also saw notable downside as it failed to benefit from the large-cap rally while the equal-weight S&P also took a hit. NVDA managed to pare early losses but AAPL, MSFT, and AMZN saw gains of over 2%, while Tesla (TSLA) surged 6% ahead of delivery numbers due today. T-notes bear steepened with pressure seen throughout the day led by the large move lower in the German Bund, while the sell-off extended after SCOTUS gave Trump a partial win. In FX, the Dollar Index clawed back early losses as the Euro pared from best levels in the wake of the French election, which saw the National Rally make significant gains, while the odds of another hung parliament have likely increased, which is seen as the market-friendly option. Crude prices meanwhile surged throughout the session with an early start to the hurricane season supporting the move with Hurricane Beryl seen as a strong Cat 4 as it heads towards the mouth of the Gulf of Mexico. The Japanese Yen continues to see pressure with the surge in US yields today hitting rate-sensitive currencies, including the Swiss Franc. The data highlight saw US Manufacturing ISM PMI disappoint expectations, with downside in both employment and price components with attention turning to Fed Chair Powell at SINTRA on Tuesday, as well as JOLTS data. The ISM Manufacturing PMI data in June saw the headline post a surprise decline to 48.5 from 48.7, beneath the 49.1 forecast. The report highlights that 62% of manufacturing GDP contracted in June, up from 55% in May. It adds however that what is more concerning is the share of sector GDP registering a composite PMI calculation at or below 45 percent — a good barometer of overall manufacturing weakness — was 14% in June, up from the 4% in May. The subcomponents of the report saw prices paid ease to 52.1 from 57.0, taking it to the lowest level in 2024 so far, while employment fell into contractionary territory at 49.3 from 51.1. New Orders rose to 49.3 from 45.4, indicating a further slowdown, albeit at a slower rate than in May. Oxford Economics summarise the data by noting the manufacturing sector continues to struggle in a high interest rate environment, with tepid demand from new inventory and capital goods from businesses. The desk adds that “Boosts from the IRA and CHIPS Act related investments should support production in the near-term, but a sustained improvement in the sector is likely to wait until the Fed begins cutting rates in September.” Elsewhere, Oil started July with a strong 2.26% gain while Gold again closed flat.
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For anyone following my Platinum Service it made 155 points on the first trading session of July after closing June 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 to 4 updated emails throughout the trading day to demonstrate this value, a points, 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 0.427% higher at a price of 5475.
The Dow Jones Industrial Average closed 50 points higher for a 0.13% gain at a price of 39,169.
The NASDAQ 100 closed 0.66% higher at a price of 19,812.
The Stoxx Europe 600 Index closed 0.32% higher.
Yesterday, the MSCI Asia Pacific closed 0.2% higher.
Yesterday, the Nikkei closed 0.12% higher at a price of 39,631.
Currencies
The Bloomberg Dollar Spot Index closed 0.05% lower.
The Euro closed 0.2% higher at $1.0737.
The British Pound closed 0.1% higher at 1.2649.
The Japanese Yen fell 0.3% closing at $161.45.
Bonds
Germany’s 10-year yield closed 10 basis points higher 2.60%.
Britain’s 10-year yield closed 10 basis points higher at 4.28%.
U.S.10 Year Treasury closed 8 basis points higher at 4.47%.
Commodities
West Texas Intermediate crude closed 2.26% higher at $83.38 a barrel.
Gold closed 0.1% higher at $2329 an ounce.
This morning on the Economic Front we have the Euro-Zone CPI and the Unemployment Rate at 10.00 am. Next, we have a speech from ECB Member Schnabel at 11.30 am. This is followed by speeches from Fed Chair Powell and ECB President, both at 2.30 pm. Finally, we have U.S. JOLTS Job Openings at 3.00 pm.
Cash S&P 500
The S&P opened strong yesterday and then declined until late afternoon. A rally started just before 4.00 pm and carried until the close. Breadth was negative during the entire advance, however, as was NYSE up/down volume. The S&P 500 closed the day up 14 Handles but just 24.3% of the stocks comprising the index closed the day higher, a very narrow display. In terms of volume, NYSE down volume was 64.9% versus up volume of 35.1%. Weak breadth measures are plaguing the S&P as shown by the McClellan Oscillator which closed with a -41-print last night. As I have said over the past few weeks this should not be happening with Indexes close to all-time highs. I find it very hard to buy the market given how stretched both the NDX and S&P are at this time. Yet a large number of technical signals that I follow are severely oversold, thus making it extremely difficult to be short. Unfortunately, the S&P missed yesterday’s 5442 initial buy level with a 5446 print before rallying over 30 Handles and I am still flat. Today, I will raise my buy level slightly to 5430/5446 with a higher 5419 ‘’Closing Stop’’. Despite the positive seasonality, I will be a small seller on any further rally to 5495/5512 with a 5527 ‘’Closing Stop’’ If I am taken long, I will have a T/P level at 5459. If I am taken short, I will have a T/P level at 5483.
EUR/USD
I am still flat as the Euro never came close to yesterday’s buy range. Ahead of this morning’s key Euro-Zoen CPI, I will not chase the Euro higher, preferring to only be a buyer on any dip lower to 1.0620/1.0690 with the same 1.0555 ‘’Closing Stop’’. I still do not want to be short the Euro at this time.
Dollar Index
My latest 106.05 short Dollar position worked well as the market sold off to my 105.60 T/P level and I am now flat. Today, I will again be a seller on any further rally to 106.20/106.80 with a higher 107.45 ‘’Closing Stop’’.
Cash DAX
Despite the French Elections, there was little or no impact on European Indexes. The DAX traded in a narrow range unconcerned about the 10-basis-point rally in German Bund Yields. I will now raise my buy level slightly to 18060/18140 with a higher 17975 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 18210.
Cash FTSE
No Change: In contrast to European Markets the FTSE continues to trade heavy. The FTSE has strong support from 8060/8130 where I will continue to be an aggressive buyer with a wider 7995 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 8185.
Dow Rolling Contract
I am still flat the Dow as the market recovered from earlier losses to close basically flat. Despite the late rally, I will not chase the market higher, leaving my 38700/38950 buy level unchanged with the same 38495 wider ‘’Closing Stop’’. Despite Friday’s reversal I still do not want to be short the Dow especially given the positive seasonal bias for the first two weeks of July.
Cash NASDAQ 100
My NDX plan worked well as the market sold off to my 19590-buy level before rallying to my 19730 T/P level and I am now flat. Given the strong seasonality in the first two weeks in July there is no point in trying to short the market despite how overbought the Index is at this time. Today, I will again be a buyer on any dip lower to 19530/19680 with a higher 19395 ‘’Closing Stop’’.
September BUND
Wrong! The Bund opened lower and continued to sell-off for the rest of the session as Yields rose a hefty 10 basis points since Friday’s close. This move lower saw my second buy level at 131.10 triggered for a 131.55 average long position. I was stopped out of this trade at 130.75 and I am still flat. The Bund is now oversold. We have further short-term support from 129.20/130.00 where I will again be a buyer with a lower 128.55 ‘’Closing Stop’’. If triggered, I will have a T/P level at 130.60.
Gold Rolling Contract
No Change: I do not have a strong edge in Gold at this time preferring to only be a buyer on any dip lower to 2269/2285 with the same 2255 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2302.
Silver Rolling Contract
To get July off to a positive start I exited my latest 29.10 long Silver position at my revised 29.35 T/PM level and I am now flat. Today, I will again be a buyer of Silver on any dip lower to 28.10/28.90 with the same 27.55 ‘’Closing Stop’’.
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