Monday’s session saw two-way price action, with the initial optimism in equities fading as the session progressed. Sentiment was initially supported by the US and Iran pausing strikes against each other over the weekend, which saw oil prices tumble. Crude hit its lows during the European morning as US equity futures traded around their peaks, although both moves began to retrace as US participants arrived. The downside in equities was concentrated in tech, with the NASDAQ 100 closing lower while the S&P 500 was broadly flat and the Russell 2000 and Dow gained. The equal-weight S&P 500 (RSP) also outperformed, highlighting positive underlying breadth. Nvidia (NVDA) was weighed on by reports that the company is in talks with OpenAI to guarantee USD 250 billion in financing for a data centre, while ASML (ASML) fell following reports that China has begun mass production of domestically developed DUV lithography equipment. The sharp decline in oil prices supported T-notes across the curve as some of the recent inflation concerns eased, although the Treasury move was considerably more contained than that seen in crude ahead of Wednesday’s FOMC decision. Treasury supply was mixed, with the 2-year auction stopping through the when-issued yield by 0.5bps, while the subsequent 5-year auction tailed by 0.9bps. In FX, the Dollar was little changed overall, with AUD outperforming while CAD and NZD lagged. AUD and CAD were influenced by the respective moves in their commodity exposures, while CHF was pressured by Bloomberg source reports suggesting the SNB is expected to keep rates unchanged through the end of 2027. Gold and silver prices were firmer as the sharp decline in crude eased inflation concerns and Treasury yields moved lower. Headline Durable Goods Orders rose 0.3% M/M in June, below the 1.6% forecast, while the prior was revised up to -4.0% from -4.5%. In nominal terms, orders increased by USD 1.1 billion to USD 334.8 billion. Ex-transport orders rose 0.6%, below the 0.9% forecast, although the prior was revised sharply higher to 1.8% from 1.3%. Ex-defence orders rose 0.3%, following an upwardly revised -4.3% (initially -4.5%). The closely watched non-defence capital goods orders ex-aircraft, a proxy for business investment, rose 0.9%, slowing from an upwardly revised 1.9% (initially 1.6%). Computers and electronic products, which have risen in nine of the last ten months, led the increase, rising USD 0.9 billion, or 3.1%, to USD 31.1 billion. Meanwhile, non-defence capital goods shipments ex-aircraft rose a strong 1.9%, accelerating from 0.2% previously. Pantheon Macroeconomics said the shipments data are consistent with an annualised increase in business equipment investment of around 8% in Q2. Overall, Pantheon described the release as another strong report despite the headline miss, which was partly driven by declines in autos and defence aircraft components. Underlying orders remained solid, particularly when accounting for the upward revisions to prior data. Pantheon also highlighted that AI-related demand continues to boost orders, although some of the recent strength may also reflect temporary stockpiling as firms seek to get ahead of potential supply-chain disruptions stemming from the energy shock. Elsewhere, Oil closed Monday with a whopping 8.25% fall while Gold closed higher by 0.7%.
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For anyone following my Platinum Service it made 550 points yesterday and is now ahead by 6586 points for July 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 0.02% higher at a price of 7413.
The Dow Jones Industrial Average closed 262 points higher for a 0.51% gain at a price of 52,210.
The NASDAQ 100 closed 0.32% lower at a price of 28,039.
The Stoxx Europe 600 Index closed 0.02% higher.
This Morning, the MSCI Asia Pacific closed 1.3% lower.
This Morning, the Nikkei closed 4.35% lower at 62,091.
Currencies
The Bloomberg Dollar Spot Index closed 0.07% lower.
The Euro closed 0.12% higher at $1.1382.
The British Pound closed 0.12% lower at $1.3307.
The Japanese Yen rose 0.13% closing at $163.61.
Bonds
U.K.’s 10-Year Gilt closed 3 basis points lower at 5.00%.
Germany’s 10-Year Bund Yield closed 5 basis points lower at 3.13%
U.S.10 Year Treasury closed 5 basis points lower at 4.63%.
Commodities
West Texas Intermediate crude closed 8.24% lower at $81.94 a barrel.
Gold closed 0.81% higher at $4081.10 an ounce.
Today on the Economic front we have no data of note due from either the U.K. or the Euro-Zone. At 1.30 pm we have the U.S. Trade Balance and Wholesale Inventories, followed by the House Price Index at 2.00 pm. Next, we have Consumer Confidence and the Richmond Fed Manufacturing Index at 3.00 pm. Finally, we have Seven-Year Treasury Auction at 6.00 pm.
Cash S&P 500
Now that we have a new Fed Chairman at the helm, it likely pays to examine the historical record. Which is this: for whatever reason, and perhaps this merely goes under the realm of markets testing a new Fed Chairman (or Fed Chairperson), every single “newbie” has confronted a crisis of sorts shortly after taking over the helm. A pattern not to be ignored. The data goes all the way back to Eccles in the 1930s. Perhaps it is because the new Fed leader traditionally likes to flex his or her anti-inflation credentials right off the bat, or perhaps it was the market testing the Chairperson at the get-go… because the futures strip has already exceeded what the Fed recently indicated it intends to do in the most recent median “dot plot.” Even super-dove Janet Yellen made her first move a rate hike in late 2015 — with the pledge of additional policy tightening quickly aborted. Every single new Fed Chair made a rate increase the first move, all the way back to maligned William Miller back in the late 1970s. Wednesday’s post FOMC Statement Warsh press conference will be interesting to say the least, in my opinion. Monday was a mixed day of trading, even though the S&P 500 finished essentially flat. Semiconductor stocks were hit hard, with the SMH falling nearly 3% at one point. The SMH appears to be at risk as it tests support around $550, which looks to be the neckline of a potential head-and-shoulders pattern. The options market ‘’Put Wall’’ for SMH sits near $520, while the next major technical support level is around $510. That makes the $510-$520 area the most likely downside target if the current pullback continues. Nvidia’s announcement overnight that it is guaranteeing up to $250 billion for OpenAI’s data centre expansion did not appear to be well received by the credit market. The company’s 5-year CDS spread widened again, reaching 79.5 basis points. The stock also came under pressure, suggesting that, at least today, the widening in credit spreads is beginning to be reflected in the share price. The same technical pattern seen in the SMH is also present in Micron, with a similar neckline around $870. However, Micron’s options ‘’Put Wall’’ sits much lower, around $800, roughly 10% below the current share price. That suggests Micron has significantly more downside potential if the neckline support fails. The rest of this week is packed with potential market-moving events, including earnings from Microsoft, Amazon, Meta, and Apple, as well as the FOMC and Bank of Japan meetings and the release of the PCE inflation report. On top of that, Treasury Tuesday brings $70.5 billion in T-bill settlements, followed by another $38.5 billion on Thursday. That combination of heavy Treasury settlements, major earnings, central bank meetings, and key economic data is likely to make for a challenging week for risk assets. With another wave of important economic data due in the first week of August and additional liquidity set to leave the financial system, next week may not prove much easier. Yesterday, after the S&P traded the whole of my buy range for a 7410 average long position the market rebounded to my revised 7426 T/P level and I am now flat. The S&P has strong support at the Mid-June low of 7350. Therefore, I will be an aggressive buyer on any further move lower to 7333/7358 with a 7309 ‘Closing Stop’. If I am taken long, I will have a T/P level at 7392. If this view changes, I will be back with a new update for my Platinum Members.
EUR/USD
I am still long the Euro from last week at a price of 1.1410. I will add to this position at 1.1340 while leaving my 1.1275 ‘Closing Stop’ unchanged. I will now lower my T/P level to 1.1445. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
The Dollar never came close to Monday’s buy range and I am still flat. Today, I will raise my buy level to 100.10/100.90 with the same 99.35 ‘Closing Stop’. If I am taken long, I will have a T/P level at 101.40.
Russell 2000
The Russell finally sold off to my 2950 T/P level on my latest 2990 short position and I am now flat. Today, I will again be a seller from 2990/3050 with the same 3195 ‘Closing Stop’. If I am taken short, I will have a T/P level at 2945. I still do not want to be long the Russell at this time.
FTSE 100
Shortly after I posted yesterday morning the FTSE rallied to my sell range for a now 10820 short position. I will add to this position at 10900 with a now higher 10975 ‘Closing Stop’. I will now raise my T/P level to 10740. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
My Dow plan worked well as the market traded higher to my 52600-sell level before trading lower to my 52340 T/P level and I am now flat. Today, I will again be a seller from 52500/52800 with a lower 53005 ‘Closing Stop’. If I am taken short, I will have a T/P level at 52240. I still do not want to be long the Dow at this time.
Cash NASDAQ 100
Over the past six trading days we have seen NASDAQ stocks falling to new 52-week lows outnumbering those reaching new 52-week highs. This shows that beneath the surface there is some real damage being done to Tech Stocks, which goes unnoticed to most investors just looking at the daily performance of the major Indexes. Yesterday’s gap higher saw the NDX hit a morning high at 28600 before falling 800 points. These are huge moves and have to be respected. Over the last six weeks I have mentioned the importance of the Korean stock market (KOSPI) which includes two of the most prominent chipmakers: Samsung and SK Hynix. Recently in Korea, there were more than 1.2 million accounts that got margin calls with 320,000-360,000 of those closing down (liquidated) because their margin calls could not be met. Korean regulators will be increasing cash requirements for trading ETFs by August 5, raising it 200% from 10M Won to 30M Won. Is this all a prelude for the U.S. Market as I have been warning. TBD. My NDX plan worked well yesterday as the market sold off to my 27860-buy level before rallying to my revised 27990 T/P level and I am now flat. Today, I will again be a strong buyer from 27430/27630 with a lower 27255 ‘Closing Stop’. If I am taken long, I will have a T/P level at 27870.
December BUND
The Bund followed Treasury Prices higher as the market never came close to my buy range. Today, I will raise my buy level slightly to 123.60/124.30 with a higher 122.85 ‘Closing Stop’. If I am taken long, I will have a T/P level at 124.95.
Gold Rolling Contract
I am still flat. Gold has support below from 3890/3980 where I will continue to be a buyer with the same 3795 ‘Closing Stop’. If I am taken long, I will have a T/P level at 4050.
Silver Rolling Contract
Silver fell 3% overnight. This move lower saw Silver hit Monday’s buy range for a now 57.00 long position. I will add to this trade at 54.50 while leaving my 52.95 ‘Closing Stop’ unchanged. I will now lower my T/P level to 58.60. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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