A combination of Fitch threatening to downgrade U.S. Banks and much softer than expected Chinese data saw Equity Markets get hit hard across the board yesterday. This move lower saw the VIX surge 11%. Treasury Yields continue to rise as Investors pulled more than $1.8 billion from the iShares 20+ Year Treasury Bond Fund (TLT) last week. This mass withdrawal ranks as the largest migration from the fund since March 2020. Investors’ sentiment has shifted away from long-term Treasurys as they expect the Fed to hold rates higher for longer. Yields on long-term U.S. debt have risen significantly as a result, impacting demand for the recent 30-year Treasury auction and prompting investors to reevaluate their positions in TLT. Shareholders of Johnson & Johnson (JNJ) face a big decision this week, as the pharmaceutical company looks to unload a sizable portion of its $40 billion stake in Kenvue (KVUE). Johnson & Johnson will offer shareholders a “swap” – they can exchange JNJ shares for KVUE shares at a 7% discount. Investors are allowed to swap all, some, or none of their stake in the company, though decisions are due Friday. Participation in the swap will determine the ratio of KVUE shares issued per JNJ stock. The ratio is to be ironed out later today. Home Depot’s (HD) earnings and revenue figures exceeded market expectations, yet the company remains cautious in its outlook. Despite beating estimates, the home-improvement giant forecast a sales decline of 2-5% this fiscal year, reflecting a persistent uncertainty in consumer spending patterns, particularly concerning high-value purchases. CFO Richard McPhail highlighted that many consumers continue to shy away from significant outlays. However, in a move that may boost investor confidence, Home Depot announced a new $15 billion share buyback programme, effective immediately. The latest consumer expectations survey from the New York Federal Reserve showed that inflation expectations decreased for the fourth consecutive month. This marks the lowest level since April 2021. The median one-year expectation fell to 3.5% from June’s 3.8%, while the three- and five-year expectations decreased to 2.9%. According to the report, households feel more optimistic about their finances and expect smaller price increases for essential things such as food and housing. European Markets closed lower. Germany, the economic powerhouse of Europe, continues to deal with a sluggish recovery from its recession this year. Investor confidence showed a marginal improvement in August, but the Index reflecting the current economic conditions registered a further decline. Economic analysts predict that, given Germany’s heavy reliance on exports, the nation might encounter difficulties boosting economic output levels by the year-end – making the path to recovery more daunting and prolonged. In Asia, in a surprise move yesterday, China cut Interest Rates to pre-emptively distract from the awful economic data all data had dramatic misses yesterday morning. Elsewhere, Oil fell 1.91% while Gold closed lower by 0.2% following a quiet session.
To mark my 2850th 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 lost 195 points yesterday and is now ahead by 1535 points for August 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 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 1.16% lower at a price of 4438.
The Dow Jones Industrial Average closed 361 points lower for a 1.02% loss at a price of 34946.
The NASDAQ 100 closed 1.10% lower at a price of 15,038.
The Stoxx Europe 600 Index closed 0.95% lower.
Yesterday, the MSCI Asia Pacific closed 1.5% lower.
Yesterday, the Nikkei closed 0.56% higher at a price of 32,238.
Currencies
The Bloomberg Dollar Spot Index closed 0.4% higher.
The Euro closed 0.1% lower at $1.0903.
The British Pound closed 0.2% higher at 127.02.
The Japanese Yen fell 0.1% closing at $145.61.
Bonds
Germany’s 10-year yield closed 4 basis points higher at 2.69%.
Britain’s 10-year yield closed 2 basis points higher at 4.59%.
U.S.10 Year Treasury closed 2 basis points lower at 4.22%
Commodities
West Texas Intermediate crude closed 1.91% lower at $80.59 a barrel.
Gold closed 0.2% lower at $1902.10 an ounce.
This morning on the Economic Front we have the release of U.K. CPI, PPI and the Retail Price Index at 7.00 am. This is followed by Euro-Zone GDP, Industrial Production and Employment Change at 10.00 am. At 1.30 pm we have U.S. Housing Starts and Building Permits. Next, we have Capacity Utilisation and Industrial Production at 2.15 pm. Finally, we have the FOMC Minutes from last month’s meeting at 7.00 pm.
Cash S&P 500
Wrong! The combination of awful Chinese Economic data which was reported shortly after I posted earlier yesterday morning, and Fitch threatening to downgrade several banks sure took the sails out of bulls yesterday. The S&P gapped lower traded sideways for a number of hours before falling 25 Handles into the close. Internals were the worst since the March lows with a close over -2200 issues down. History tells us that when this occurs, we see bounces or new lows before we get a solid bottom. Yesterday’s move lower saw the S&P close below its 50-Day Moving Average (4447). This may be a false break as we have seen plenty of times this year. However, the seasonal chart is still looking for lower prices before the big rally into Labour Day. Making shorting the S&P difficult despite the break of the 50 Day MA is the fact that the $BPSPX RSI closed at 26 and the $NYMO dropping to -72. The McClellan Oscillator got hit hard yesterday closing with a -212 print. One more down day will see the MO give a buy signal. We still do not have a positive divergence on $NYMO suggesting new lows before a solid rally. Yesterday’s aggressive sell-off saw me long at an average rate of 4463 before getting stopped on the close at 4439 and I am now flat. The S&P has short-term resistance from 4455/4470 where I will be a small seller with a 4483 ‘’Closing Stop’’. If the S&P hits my sell range it will give some protection against my long Dow and NDX positions. The S&P has support from 4390/4410 where I will be a strong buyer with a tight 4379 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 4439. If I am taken long, I will have a T/P level at 4426.
EUR/USD
No Change. Despite the aggressive sell-off in U.S. Equity Markets yesterday, the Euro traded in a narrow range over the past 24 hours. I am still long at 1.0970 with the same 1.0875 ‘’Closing Stop’’. I will now lower my T/P level to 1.1000. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
June Dollar Index
My latest 103.30 short Dollar position worked well as the market traded lower to my 102.85 T/P level and I am now flat. The Dollar has further resistance from 103.50/104.10 where I will again be a seller with a higher 104.65 ‘’Closing Stop’’.
Cash DAX
Frustratingly, the DAX missed my initial 15700 buy level before having a nice 80-point rally and I am still flat. As I am long the Dow, NDX and FTSE I will now lower my DAX buy level to 15450/15550 with a lower 15355 ‘’Closing Stop’’. I will be an aggressive buyer on any dip to this area. If I am taken long I will have a T/P level at 15680.
Cash FTSE
The FTSE got hit hard yesterday following higher wage data reported in yesterday’s Employment Report. This move lower saw the whole of my buy range triggered for a now 7440 average long position. I will leave my 7355 ‘’Closing Stop’’ unchanged while lowering my exit level to a small loss at 7425. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
The Bank Index got hit hard yesterday, closing lower by almost 3%. This move lower was responsible for the Dow sell-off. I am now long at 35050. I will add to this position at 34800 with a now lower 34695 ‘’Closing Stop’’. I will lower my T/P level to 35140. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
So much for the NDX building value above its 50 Day MA on Monday as the market reversed those gains and some yesterday. With Tesla down 22% and Apple lower by 11% over the past few weeks I have no interest in being short the NDX. History tells us when we get these aggressive sell-offs it is met by some liquidity injection from the Fed. Frustratingly, the NDX made a high early yesterday at 15270 missing my 115280 T/P level by 10 points. As I mentioned yesterday with both $BPNDX and Apple extremely oversold I have no interest in being short as I continue to hold my 15225 long position. I will continue to add to this trade at 14950 with no stop for now. I will leave my T/P level unchanged at 15280. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
September BUND
Higher Treasury Yields saw the Bund hit my second buy level at 130.75 for a now 131.10 average long position. I will leave my 130.15 ‘’Closing Stop’’ unchanged, with a now lower 131.50 T/P level. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
Gold just missed my initial 1895 buy level before having a small $7 rally into the New York close. Today, I will again lower my aggressive buyer level to 1875/1890 with a lower 1863 tight ‘’Closing Stop’’.
Silver Rolling Contract
No Change. Silver had a bad week, falling over 3% since I last marked prices on August 4th. I am still long at an average rate of 24.20 with the same 24.70 T/P level. Even though Silver is trading lower at 22.51 this morning I will continue to have no stop on this position. If this view changes I will email my Platinum Members.
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