U.S. Indexes closed mixed on Tuesday, with the NASDAQ the clear laggard as the recent weakness in Technology continued. The Tech sector fell around 2%, weighing on both the Nasdaq and S&P 500, while the Dow Jones was the only major index to finish in positive territory. The Russell 2000 also saw notable selling pressure. Sector performance was broadly positive outside of Technology, with Financials and Industrials leading gains and helping support the Dow. The pressure in Technology comes after several sessions of profit-taking in AI-related names. The weakness in mega-cap and semiconductor names outweighed the broader improvement in risk sentiment stemming from developments in the Middle East. Energy prices continued to slump in the wake of the US-Iran agreement. Further downside was seen after reports that QatarEnergy expects to restore half of its LNG output within a month of the Strait of Hormuz reopening, with production expected to reach 80% of capacity within two months. The Wall Street Journal also reported that the US will allow Iran to immediately resume oil and fuel exports under the agreement, adding further pressure to the crude complex. While some details of the deal remain disputed by Iranian media, the broad direction of travel points towards increased energy supply and a gradual normalisation of flows through Hormuz. The full agreement is expected to be released when formally signed on Friday. In FX, the Dollar softened modestly alongside lower Treasury yields as declining energy prices helped ease inflation concerns. Both the Japanese Yen and Australian Dollar were little changed following their respective central bank decisions (BoJ 25bps hike, RBA hold), which matched expectations, while US data had a limited impact despite a sharp decline in housing starts and firmer-than-expected import and export prices. Treasuries broadly tracked the collapse in oil prices, with yields moving lower across the curve as investors pared inflation risk premia. Market focus is now firmly on Wednesday’s FOMC decision and Chair Warsh’s first press conference. The USD 13 billion 20-year bond auction was notably strong, although it generated little reaction in Treasury futures while, SpaceX (SPCX) continued its recent rally and overtook Amazon (AMZN) in market capitalisation. Housing starts for May tumbled 15.4% M/M to 1.177 million from 1.392 million, way beneath the expected 1.430 million. Single-family starts fell 1.9% and multi-family plunged 40.2%. Building permits fell 0.7% to 1.413 million from 1.423 million, but also shy of the forecasted 1.420 million. Single-family permits rose 0.6% with multi-family down 2.8%. Oxford Economics writes that just as the pace of housing starts in March and April overstated the strength in housing activity, the plunge in May overstates any weakness, as the decline in starts was mostly due to a 40% dive fall in the multifamily sector, where, based on permits, some rebound is likely in June. Ahead, OxEco expects starts to move sideways until later in the year when they expect lower mortgage rates in response to easing inflation and Fed rate cuts to spur both home sales and starts. Elsewhere, Oil closed lower by 5% while Gold was basically flat.
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For anyone following my Platinum Service it made 275 points yesterday and is now ahead by 5382 points for June 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 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
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