Stocks rose in Europe on Monday after markets traded mixed in Asia as investors mulled three weeks of global declines amid escalating U.S.-China trade tensions. Core Sovereign Bonds in the European Union advanced after mainstream parties held their ground against populists in elections. The Euro Stoxx index climbed, helped by Fiat Chrysler’s proposed merger with France’s Renault, which drove up both carmakers’ shares. U.S. Stock Futures also rose. Italian bond yields jumped as the country was said to face a $4 billion fine over failure to rein in debt. The yuan steadied after a senior Chinese economic official said speculators “shorting the yuan will inevitably suffer from a huge loss.” The Japanese Yen fell as the U.S. and Japan discussed a trade deal. The Euro held most of its gains from Friday, while the US Dollar rose against a basket of major currencies. With holidays in the U.K. and America on Monday, trading volumes were much lighter than usual.
To mark my 1850th 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 was flat yesterday and is still ahead by 1766 points for May, having made 955 points in April, 1027 points in March, 1013 points in February, 1671 points in January, 2803 points in December, 1541 points in November and 2094 points in October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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Equities
Investors are looking for signs of stabilization after trade frictions and mixed economic data put global stocks on course for their first monthly decline of 2019. On a visit to Tokyo, President Donald Trump said the U.S. is making “great progress” in trade negotiations with Japan even though a deal could come only after the country’s elections in July. At the same time, he said America is not ready to make a trade deal with China. The Euro Stoxx Index closed 0.2% higher yesterday and is opening firmer this morning as we wait to see what the US Markets do when they re-open this afternoon. Futures on the S&P 500 Index are 0.4% higher since last Friday’s close. Yesterday the Shanghai Composite Index increased 1.4%, the largest climb in more than a week, while the MSCI Emerging Market Index climbed 0.2%.
Currencies
The Bloomberg Dollar Spot Index gained 0.2% to 1,204.60. The Euro declined 0.1% to $1.1189, the largest fall in more than a week. It is opening unchanged in London this morning. With the Brexit Party gaining 29 European Seats the British Pound fell 0.3% to $1.2673.
Bonds
Sovereign Bonds soared to multi-year highs yesterday with Germany’s 10-year yield falling three basis points to -0.14%, the lowest in almost three years. France’s 10-year yield declined two basis points to 0.26%, the lowest in more than two years. As mentioned in the Economic Commentary above Italy’s 10-year yield climbed six basis points to 2.614%, the biggest increase in more than two weeks, on the back of the prospect of a large fine as Italy is so far unable to rein in its debt levels.
Commodities
Following the aggressive sell-off in oil on Thursday and Friday, Brent crude increased 0.5% yesterday to close at $69.01 a barrel. Iron ore continued its rally in Singapore, on concerns there is a global shortage in the seaborne market. And Bitcoin climbed to the highest level in a year, after surging almost 70% this month.
This morning on the Economic Front we already had the release of German GFK Consumer Confidence which came in lower at 10.1 versus 10.4 expected. At 9.00 am we have Euro-Zone Money Supply and this is followed at 9.30 am by UK BBA Mortgage Approvals. Next we have Euro-Zone Consumer and Economic Confidence at 10.00 am. This is followed at 3.00 pm by US Consumer Confidence. Finally we have the Dallas Fed Manufacturing Index at 3.30 pm.
June S&P 500
Unfortunately the S&P just missed my 2819 buy level with a 2821 low print before rallying to an overnight high at 2840. I am still flat and today I will now raise my buy level slightly to 2812/2824 with a 2803 stop. One concern is that fact that we that the market generated a fifth Hindenburg Omen last Friday. This is an important development because once we get five or more observations, the odds for a subsequent stock market crash rise significantly. My own view is that the stock market will rally over the summer before getting hit hard like last year in Q4. Despite the confirmed HO I still do not want to be short the S&P at this time especially as I have a sell level above the market on both the Dow and NASDAQ.
EUR/USD
I am still flat the Euro which is trading unchanged today despite the massive increase in the ‘’Green’’ vote in last weekend’s European Elections. Today I will leave my 1.1110/1.1150 buy level unchanged with the same 1.1070 stop.
June Dollar Index
The Dollar has traded sideways since I posted on Friday and I am still flat. Today I will leave my 98.00/98.40 sell level unchanged with the same 98.65 tight stop.
June DAX
So far the DAX is holding its recent low at 11920, helped by new three-year lows in the German Bund. Today I will raise my buy level to 11920/11990 with a 11855 stop. I still do not want to be short the DAX at this time.
June FTSE
Despite the Brexit Party gaining 29 seats in the European Elections the fall-out so far has been minimal. The FTSE is trading unchanged from where I marked prices last Friday and today I will look to buy the market on any further dip lower to 7200/7250 with a 7165 stop. The FTSE has resistance from 7330/7370 and I will be a seller on any rally to this area with a 7405 stop.
Dow Rolling Contract
I am still flat the Dow and today I will raise my sell level slightly to 25835/25985 with a 26080 stop. Despite the Dow trading at 25650 this morning I am reluctant to chase the market higher and I will only raise my buy level to 25270/25430 with a 25180 stop.
June NASDAQ
I am still flat the NASDAQ. The market has strong resistance from 7410/7460 and I will be a seller on any rally to this area with a 7505 stop. Meanwhile I will leave my 7210/7270 buy level unchanged with the same 7175 tight stop.
June BUND
The BUND made a new three high yesterday and this move higher saw me go short the market at a price of 167.75. I am still short and I will now lower my stop on this position to 168.10. Even though the yield on the Bund is aggressively negative I will raise my T/P level on this position to 167.40 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
Gold Rolling Contract
No Change as my only interest in buying Gold is on a move lower to 1260/1269 with the same 1252 stop.
Silver Rolling Contract
No Change as I am still a buyer on any dip lower to 13.95/14.35 with the same 13.55 stop. If I am taken long I will have a T/P level at 14.59.
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