U.S. Equity Markets closed lower across-the board, reversing earlier gains. The NASDAQ 100 again led the declines as profit-taking continues in this severely overvalued market. The first half of 2023 is ending with mixed market outcomes – otherwise known as a ‘sideways market’. Early optimism surrounding China’s recovery and global economic resilience has been severely dampened over the last few months. Since the start of the year, we have seen a U.S. banking crisis, Credit Suisse’s collapse, and ongoing struggles to control inflation in the U.S. and Europe, leading to higher interest rate forecasts for year-end. And ‘Big Tech’ has seen standout performers, with ‘The Magnificent Seven’ far outpacing the rest of the market. As investors trudge into the second half of the year, cautious optimism should remain as uncertainty surrounding central bank rate-hikes and the economic outlook will dissipate. Investors are looking ahead to Friday’s release of the May data on the personal consumption expenditures (“PCE”) price index, which is considered the Federal Reserve’s preferred measure of inflation. The inflation figures will play a crucial role in shaping investor expectations regarding the central bank’s upcoming rate decision in July. While the Fed paused rate hikes at its June meeting, it signalled its intention to implement further hikes in the future. Additionally, this afternoon will see the release of the latest consumer confidence report, following a dip to a six-month low in May. Analysts anticipate a modest increase in the Index for June. Another notable release on Tuesday is the Case-Shiller national home price index. These data releases will be closely monitored by investors as they assess the trajectory of interest rates, consumer sentiment, and the housing sector, all of which have implications for the broader economic outlook. European Markets closed lower. On Friday, the Euro-Zone is scheduled to release preliminary inflation data for June. While the headline inflation rate is expected to show a moderation, underlying inflation is projected to increase slightly. Following the recent rate hike from the European Central Bank (“ECB”), ECB President Christine Lagarde surprised markets with a more hawkish stance, emphasising the need for further interest rate hikes to bring inflation closer to the ECB’s target of 2%. Investors will have an opportunity to gain insights from Lagarde, along with other global central bank leaders including Federal Reserve Chair Jerome Powell, during a panel discussion at the ECB’s annual forum in Sintra, Portugal this week. In Asia, on Friday, China is set to release the purchasing manager indexes (PMIs) for June, which is anticipated to reinforce the narrative that the recovery in the country’s economy is losing momentum. In an attempt to boost growth, Chinese authorities recently lowered their key lending benchmarks, although the easing measures were not as significant as expected due to concerns about the property market. Investors are growing more impatient by the day as they wait for authorities to provide more support to the economy. Several global investment banks have already reduced their 2023 gross domestic product (GDP) growth forecasts for China following disappointing economic data in May. The market will closely monitor the upcoming PMI figures to gauge the state of China’s economic recovery and assess the potential implications for future policy measures. Elsewhere, Oil closed 0.30% higher while after a quiet session, Gold finished with a 0.1% gain.
To mark my 2800th 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 246 points yesterday and is now ahead by 2694 points for June. 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 0.45% lower at a price of 4328.
The Dow Jones Industrial Average closed 12 points lower for a 0.04% loss at a price of 33,714.
The NASDAQ 100 closed 1.36% lower at a price of 14,689.
The Stoxx Europe 600 Index closed 0.08% lower.
This morning, the MSCI Asia Pacific closed 0.3% higher.
This morning, the Nikkei closed 0.49% lower at a price of 32,538.
Currencies
The Bloomberg Dollar Spot Index closed 0.47% higher.
The Euro closed 0.2% higher at $1.0914.
The British Pound closed 0.1% higher at 1.2732.
The Japanese Yen rose 0.2% closing at $143.30.
Bonds
Germany’s 10-year yield closed 5 basis points lower at 2.31%.
Britain’s 10-year yield closed 2 basis points lower at 4.30%.
U.S.10 Year Treasury closed 2 basis points lower at 3.72%.
Commodities
West Texas Intermediate crude closed 0.30% higher at $69.37 a barrel.
Gold closed 0.1% higher at $1922.10 an ounce.
This morning on the Economic Front we have speeches from ECB President Lagarde at 9.00 am, followed by Panetta, Elderson and Schnabel at 9.30 am, 10.30 am and 1.00 pm respectively. Next, we have U.S. Durable Goods Orders at 1.30 pm. Finally, at 3.00 pm we have Consumer Confidence, New Home Sales and the Richmond Fed Manufacturing Index.
Cash S&P 500
The S&P traded in a narrow range before following the NDX lower into the close. My 4331-buy level was hit. This call worked well as the market rallied overnight to a high so far at 4345, enabling me to cover this position at my revised 4339 T/P level and I am now flat. Last night’s close at 4328 was the August highs and may act as short-term support. The S&P has now fallen 120 Handles off its post June Expiration high in what appears to be one of the calmest sell-offs in years. The S&P has three ‘’Open Gaps’’ above which is a concern for sellers as we know that all ‘’Gaps’’ eventually get filled. The S&P is still overbought, trading well above its 50-Day Moving Average which comes in at a price of 4205 this morning. Today, I will be a small buyer from 4312/4328 with a 4299 tight ‘’Closing Stop’’. Ahead of the bullishly strong July, I do not want to be short the S&P at this time.
EUR/USD
The Euro had a small rally yesterday. As I wanted to bank some points for the session I emailed my Platinum Members to exit any long position at 1.0914 and I am now flat. Today, I will again be a buyer from 1.0790/1.0860 with a 1.0735 ‘’Closing Stop’’. I said that the Euro dynamics have changed and for this reason I have no interest in any short position at this time.
June Dollar Index
The Dollar traded in a narrow 25-point range yesterday and I am still flat. Ahead of today’s economic data I will now lower my buy level to 101.40/102.00 with a lower 100.85 ‘’Closing Stop’’. If triggered, I will have a T/P level at 102.45.
Cash DAX
Frustratingly, the DAX missed my initial 15700 buy level by 11 points before having a nice 120-point rally into the European Close. I am reluctant to chase the DAX higher, only raising my buy level to 15660/15740 with a higher 15585 ‘’Closing Stop’’. I still do not want to be short the DAX at this time.
Cash FTSE
The FTSE hit my second buy level at 7435 for a now 7465 average long position. Overnight the FTSE rallied to my revised 7495 T/P level as emailed to my Platinum Members and I am now flat. Today, I will again be a buyer on any dip lower to 7370/7440 with a lower 7325 ‘’Closing Stop’’. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
Last week saw a slight pullback of less than 2% in the Dow, there is no fear as the decline has been very orderly. Bulls are in full control as nothing major has broken and unless something breaks this week the bullish seasonal chart will come into play next week. The $NYSI is still maximum overbought so there is firepower for a quick move lower. Downside possibilities remain with Quarter end rebalancing of funds who are in imbalance with their mandated stock versus Bond allocations. JP Morgan has this pegged at around $150B in potential stock selling. What actually materialises remains to be seen. Given seasonality, liquidity drainage and Quarter-End rebalancing this week, it is probably the best chance for bears to inflict some sizeable downside ahead of early July positive seasonality into the July 4th Holiday weekend. My Dow plan worked well. The Dow hit my 33620-buy level before rallying over 150 points. This move higher enabled me to cover this position at my revised 33685 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 33300/33550 with a lower 33195 ‘’Closing Stop’’. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
The NASDAQ reversed early afternoon gains, closing lower by 1.36%. This move lower saw my 14700-buy level triggered at the close. As I was also long the S&P and FTSE I did not want to hold three positions overnight, emailing my Platinum Members to exit any long NDX position at 14722 and I am still flat. Today, I will be a small buyer on any further dip lower to 14460/14610 with a lower 14295 ‘’Closing Stop’’. Despite the overbought Market I do not want to be short the NDX ta this time.
September BUND
The Bund continues to build value off last Thursday’s lows helped by the awful recent economic data. I am still flat. I will now raise my Bund buy level to 133.30/134.00 with a higher 132.75 ‘’Closing Stop’’.
Gold Rolling Contract
Gold traded in a narrow range yesterday and I am still flat. As long as Gold stays below 1960 there is every chance we can test the 1850 major support level. I have no interest in being short preferring to be a buyer of dips which has pretty much worked for the past 18 months. I will not chase Gold higher leaving my 1895/1910 buy level unchanged with the same 1883 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. I am still long at an average rate of 23.63 with the same 24.40 T/P level. I will continue to have no stop on this position. If this changes I will be back with anew update for my Platinum Members.
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