Tuesday was another session dominated by geopolitics, with tensions rising over fears the US is getting ready to join Israel in striking Iranian nuclear facilities. Reports via CNN said that US President Trump’s desire to handle the conflict diplomatically is waning and that Trump is growing increasingly warm to using US military assets to strike Iranian nuclear facilities. Trump has had a meeting with his National Security Council, presumably on the next course of action, with a press briefing expected on the matter. The rising Middle East tensions, and feared US inclusion, saw equities slide while T-notes and the Dollar caught a bid, as Crude rallied. Aside from geopolitics, US data saw a mixed Retail Sales report, which missed on the headline, but the Control measure beat. Import prices were unchanged in May, above the expected -0.2%, but Export Prices tumbled. Both Industrial Production and Manufacturing Output were disappointed, and the NAHB Housing Market index slipped. There was a brief reaction to the Retail Sales headline miss, but it swiftly pared with the focus staying put on geopolitics. Elsewhere in FX, the Dollar and Havens outperformed while the Bank of Japan took focus overnight. The BoJ left rates on hold as expected at 0.5%, while the BoJ announced it will reduce the amount of monthly JGB purchases by JPY 200 billion per quarter from April next year. Attention on Wednesday turns to the FOMC and updated SEPs, but the focus largely remains on geopolitics, particularly on whether the US gets involved. U.S. Retail Sales declined by 0.9%, a steeper drop than analysts forecast of -0.7% for May (prev. 0.1%, rev. -0.1%). The biggest decline was seen in sales of motor vehicle & parts dealers (-3.5%), followed by building material & garden equipment suppliers (-2.7%), and then gasoline stations (-2%). On the flip side, miscellaneous (+2.9%) and non-store retail (+0.9%) grew in May. Ex-autos unexpectedly dropped by 0.3% (exp. +0.1%, prev. +0.1%) with ex-gas/autos declining by 0.1% (prev. 0.2, rev. 0.1%). Retail Control, which excludes building materials, food services, gas & autos, topped expectations, rising 0.4% (exp. 0.3%, prev. -0.2%, rev. -0.1%). Following the report, Oxford Economics calculated that real consumer spending contracted in May, but “strength in previous months means spending is still on track to rise by 2% annualised in Q2”. Additionally, the firm notes their nowcast for consumption data, which incorporates retail sales and other data for Q2 GDP, suggests personal spending was unchanged in May. The NAHB Housing Market Index fell to 32.0 in June from 34.0, and below the expected 36.0. Current single-family home sales fell to 35 from 37, while indices of home sales over the next six months and prospective buyers dipped to 40 (prev. 42) and 21 (prev. 23), respectively. NAHB noted that 90% of the builder responses to the May survey were received prior to the US-China truce, which rolled back tariffs on Chinese imports to 30% for 90 days. However, Oxford Economics notes for homebuilders, the subsequent doubling of steel and aluminium tariffs to 50% at the start of June may have more than outweighed the benefit of lower tariffs on Chinese imports. US Industrial Production in May declined by 0.2%, below the expected +0.1% print and down from the prior revised +0.1%. Manufacturing output rose by 0.1%, beneath the 0.2% forecast, with the prior revised down by 1 tenth to -0.5%. Manufacturing output was driven by a gain of 4.9% in the index for motor vehicles and parts; the index for manufacturing excluding motor vehicles and parts fell 0.3%. The index for mining increased 0.1%, and the index for utilities decreased 2.9%. Capacity Utilisation fell to 77.4% despite expectations for it to remain at 77.7%. Pantheon Macroeconomics writes, “The pick-up in manufacturing output in the first quarter has run out of steam more recently, but demand from businesses is still holding up well. Nonetheless, most business surveys suggest that the slightly declining trend in manufacturing output seen in 2023 and 2024 will re-emerge soon.” Elsewhere, Oil closed 2% higher while Gold was flat.
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For anyone following my Platinum Service it made 164 points yesterday and is now ahead by 3125 points for June, 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
Equities
The S&P 500 closed 0.84% lower at a price of 5982.
The Dow Jones Industrial Average closed 299 points lower for a 0.70% loss at a price of 42,215.
The NASDAQ 100 closed 1.01% lower at a price of 21,719.
The Stoxx Europe 600 Index closed 0.85% lower.
This Morning, the MSCI Asia Pacific closed 0.5% higher.
This Morning, the Nikkei closed 0.82% higher at a price of 38,851.
Currencies
The Bloomberg Dollar Spot Index closed 0.61% higher.
The Euro closed 0.71% lower at $1.1487.
The British Pound closed 1.1% lower at $1.3439.
The Japanese Yen fell 0.3% closing at $145.10.
Bonds
U.K.’s 10-Year Gilt closed 3 basis points higher at 4.56%.
Germany’s 10-Year Bund Yield closed 1 basis points lower at 2.54%
U.S.10 Year Treasury closed 3 basis points lower at 4.40%.
Commodities
West Texas Intermediate crude closed 2.01% higher at $73.61 a barrel.
Gold closed 0.01% lower at $3384.10 an ounce.
This morning on the Economic Front we already had the release of U.K. CPI which rose 3.4% Y/Y as expected. Next, we have Euro-Zone CPI at 10.00 am, followed by U.S. Building Permits and Weekly Jobless Claims at 1.30 pm. Finally, we have the FOMC Statement at 7.00 pm followed by the Fed Chair Powell Press Conference at 7.30 pm.
Cash S&P 500
The S&P 500 fell by more than 0.8% on Tuesday, driven by weak economic data and growing geopolitical uncertainty. The rising wedge continues to unfold as expected, and just as Tuesday needed to be a down day, ideally today should be as well, marked by a clear break of support at 5965. Momentum is showing signs of rolling over, with the index closing below the 10-day exponential moving average for the second time in three days—an early indication that the sell-off might be gaining traction, along with the RSI rolling over. The HGX housing index had a rough day, falling nearly 2.5%, and now appears to be forming a potential double-top pattern. A clean break below the neckline at $610 would suggest the index could drop toward the April lows near $560. The RSI is confirming the bearish momentum as well. Yesterday, we saw the Treasury General Account (TGA) rise significantly due to tax receipts, increasing by $158 billion—from $288 billion on Friday to $446 billion. Finally, the Fed meeting should be mostly uneventful, with the updated dot plot in the Summary of Economic Projections (SEP) providing insights into the direction of future policy. The real fireworks will likely come afterward, once the Fed announces it will hold rates steady, as President Trump is sure to quickly voice his view that Powell should have cut. At some point, Trump may name a new Fed chair—likely well before Powell’s term officially ends. It is unclear how exactly that scenario would unfold, but it would certainly be intriguing: imagine the Fed holding rates steady in September, followed immediately by a tweet from the “shadow” Chairman stating they would have cut by 25 bps. The market reaction to such a scenario would undoubtedly be fascinating. I amFinally, the Fed meeting should be mostly uneventful, with the updated dot plot in the Summary of Economic Projections (SEP) providing insights into the direction of future policy. The real fireworks will likely come afterward, once the Fed announces it will hold rates steady, as President Trump is sure to quickly voice his view that Powell should have cut. At some point, Trump may name a new Fed chair—likely well before Powell’s term officially ends. It’s unclear how exactly that scenario would unfold, but it would certainly be intriguing: imagine the Fed holding rates steady in September, followed immediately by a tweet from the “shadow” Chairman stating they would have cut by 25 bps. The market reaction to such a scenario would undoubtedly be fascinating. I am still flat the S&P as the market never came close to Tuesday’s ranges. Ahead of this evening’s expected two-way price action I am going to leave Tuesday’s ranges unchanged: Today, I will again be a seller from 6035/6055 with the same 6071 ‘Closing Stop’. Meanwhile, I will continue to be a buyer on any further dip lower to 5915/5935 with a higher 5899 ‘Closing Stop’. If these views change, I will be back with a new update for my Platinum Members.
EUR/USD
As expected, the Euro closed below 1.1500 last night given how severely overbought the market is at this time. I am still short the Euro at an average rate of 1.1530 with the same 1.1635 ‘Closing Stop’. I will leave my T/P level on this position unchanged at 1.1450. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
My long 97.70 Dollar position worked well as the market rose to my 98.50 T/P level and I am now flat. There is every chance that Monday’s low will hold for the coming weeks. If this is the case, then we need to see the Dollar test and break 100 over the coming days. Today, I will again be a buyer from 97.60/98.40 with a higher 96.85 ‘Closing Stop’. If I am taken long, I will have a T/P level at 99.20.
Russell 2000
No Change”. The Russell has short-term support from 2010/2080 where I will be a buyer with the same 1965 ‘Closing Stop’. I no longer want to be short the market at this time. If I am taken long, I will have a T/P level at 2130.
FTSE 100
The FTSE continues to trade sideways close to all-time highs and I am still flat. Today, I will lower my sell level to 8890/8970 with the same 9055 wider ‘Closing Stop’. If I am taken short, I will have a T/P level at 8815.
Dow Rolling Contract
My Dow plan worked well as shortly after I posted yesterday morning the Dow sold off to my 42190-buy level. Subsequently, the Dow made an afternoon high above 42500 before selling off 300 points into the close. This initial move higher saw my revised 42274 T/P level triggered and I am now flat. The Dow has short-term support below from 41700/41950 where I will be a strong buyer with a lower 41495 ‘Closing Stop’. If I am taken long, I will have a T/P level at 42190. I still do not want to be a seller of the Dow at this time.
Cash NASDAQ 100
I am still flat as we wait for this evening’s key FOMC Statement. This morning, the NDX is trading at a price of 21780 having hit an overnight low at 21630. The NDX has support from 21420/21570 where I will continue to be a buyer with the same 21255 ‘Closing Stop’. Today, I will again be a seller from 21990/22190 with the same 22355 ‘Closing Stop’. If I am taken long, I will have a T/P level at 21720. If I am taken short, I will have a T/P level at 21840.
December BUND
The boring sideways price action for the Bund continues and I am still flat. Today, I will continue to be a buyer on any dip lower to 129.10/129.90 with the same 128.35 ‘Closing Stop’. If I am taken long, I will have a T/P level at 130.55. I still do not want to be short the Bund at this time. If this view changes, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
No Change: There is no doubt that Gold is expensive. Any geopolitical situation sees investors pile into Gold. I have no interest in buying the Gold market at these levels and will use any rallies from here to go short. Gold has short-term resistance from 3470/3490. I will lower my sell level to this area with a lower 3511 ‘Closing Stop’. If triggered, I will have a T/P level at 3448.
Silver Rolling Contract
Silver rallied a further 3% yesterday, closing at a new 13-year high. I am still flat. Today, I will now raise my buy level to 35.40/36.40 with a higher 33.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 37.30.
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