U.S. Equity Markets trimmed some gains seen on Monday, finishing the session marginally lower, in a day that saw few macro updates and tier 1 releases. Nonetheless, Fed’s Bowman (Voter) reiterated her past comments, as she repeated rate cuts are appropriate if inflation keeps slowing, alongside comments that she still sees upside risks to inflation and needs more inflation data for it to become appropriate to gradually lower rates. Sectors’ performance was mixed, with Consumer Staples, and Health outperforming and in the green, with the latter heavily supported by Eli Lilly’s (LLY, +3%) Tirezapatide reducing the risk of developing Type 2 diabetes by 94%. Meanwhile, Financials, Materials, and Energy all lag in the red, particularly Energy slumping (-2.4%) amid lower crude prices due to continued China demand woes with the ongoing geopolitical updates taking a backseat, for now. In FX, the Dollar Index saw downside throughout the session, to the benefit of its G10 peers, most notably in Havens and the New Zealand Dollar. Treasuries were firmer and bull steepened ahead of the US USD 16 billion 20-yr Bond Auction (Wed), FOMC Minutes (Wed), and Jackson Hole (Fri). Lastly, spot gold was firmer, however, now sits of highs as it printed yet another all-time-high. Fed Member Bowman largely reiterated her prior views on the monetary policy path, as she repeated rate cuts are appropriate if inflation keeps slowing. Further on inflation, she said they have seen some recent further progress on lowering inflation, but it is still uncomfortably above the committee’s 2% goal, and still sees upside risks. Bowman also repeated the Fed’s data dependant approach, noting they need to be patient and avoid undermining continued progress on lowering inflation by overreacting to any single data point, and they must view ‘totality’ of data as risks to employment, and price-stability mandates move into better balance. Looking ahead, Bowman will remain cautious in her approach to any change in policy stance. This evening, we have the Fed Minutes. The minutes will reveal the extent to which a rate reduction was considered at the July meeting, as well as officials’ views on the labour market and the subsequent impact on monetary policy. However, as always, the minutes are stale by a couple of weeks. Additionally, Chair Powell is due to speak at the Jackson Hole Economic Symposium (on Friday at 10:00EDT/15:00BST), which will likely overshadow the minutes, with traders likely to put greater weight on his remarks to gauge how the Fed may respond in September. Elsewhere, Oil closed lower by 0.74% while Gold again closed flat despite a much weaker Dollar.
To mark my 3050th issue of TraderNoble Daily Commentary I am offering a special 2-Year rate of Euro 2750 for my Platinum Service which includes 1 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 made 250 points yesterday and is now down by 1823 points for August after closing July with a gain of 1918 points while June closed with a gain of 2074 points, having made 1843 points in May. The Platinum Service made 4010 points in April after ending March with a gain of 2113 points. February closed with a gain of 1606 points, after closing January with a gain of 3675 points. December saw a gain of 1890 points after finishing November with a gain of 1734 points. October ended with a gain of 3184 after closing September with a small gain of 228 points, after finishing August with a gain of 1485 points, 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 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 0.20% lower at a price of 5597.
The Dow Jones Industrial Average closed 61 points lower for a 0.15% loss at a price of 40,834.
The NASDAQ 100 closed 0.24% higher at a price of 19,719.
The Stoxx Europe 600 Index closed 0.45% lower.
Yesterday, the MSCI Asia Pacific closed 0.4% lower.
Yesterday, the Nikkei closed 1.80% higher at a price of 38,062.
Currencies
The Bloomberg Dollar Spot Index closed 0.44% lower.
The Euro closed 0.3% higher at $1.1123.
The British Pound closed 0.2% higher at 1.3030.
The Japanese Yen rose 0.6% closing at $145.41.
Bonds
Germany’s 10-year yield closed 3 basis points lower 2.22%.
Britain’s 10-year yield closed 1 basis points lower at 3.91%.
U.S.10 Year Treasury closed 5 basis points lower at 3.82%.
Commodities
West Texas Intermediate crude closed 0.74% lower at $73.82 a barrel.
Gold closed 0.3%higher at $2512 an ounce.
This morning on the Economic Front we have U.K. Public Sector Borrowing Requirement at 7.00 am. This is followed by U.S. MBA Mortgage Applications at 12.00 pm. At 6.00 pm we have a 20-year Treasury Auction. Finally, at 7.00 pm we have the FOMC Minutes.
Cash S&P 500
For a change my S&P plan worked well as the market rallied to my 5618-sell level before selling off to my revised 5593 T/P level and I am now flat. The last time we saw nine consecutive positive closes for the S&P was back in 1992. That record still holds as the S&P closed lower Tuesday by a small 0.20%. The S&P has resistance from 5620/5640 where I will again be a seller with a 5659 ‘’Closing Stop’’. If triggered, I will have a T/P level at 5597. I still do not want to be long the S&P at this time.
EUR/USD
I am still short the Euro at a price of 1.1080. I will continue to look to add to this position on any further move higher to 1.1150 while leaving my 1.1205 tight ‘’Closing Stop’’ unchanged. Meanwhile, I will leave my 1.1030 T/P level also unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
The continued rally in the Dollar over the past two weeks has been supportive of Equity Markets. However, for the last two trading sessions the Dollar has closed below the Weekly Bollinger Band. The Weekly RSI is also one of the lowest that we have seen in recent memory. If we see signs of the Dollar reversing, then equity markets could finally come under pressure. What could trigger a Dollar rally? Plenty of possibilities. Stronger than expected economic data. Powell not openly embracing a 50bp rate cut in his speech on Friday. Finally, a geopolitical event. While this has been quiet on the latter it cannot be totally excluded as a possibility either. Adding to the mix is the Daily Sentiment Indicator which closed below 20 last night. This is the lowest reading in a couple of years. With the Dollar trading at 101.44 as I go to press, I will be a strong buyer from 100.70/101.30 with a wider 99.95 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 101.95.
Cash DAX
No Change: I am going to stay flat the DAX as I have no edge in this market at the moment. August has been the toughest month for my Platinum Service since I started writing my Daily Commentary over 11 years ago in February 2013. I will stay flat the DAX until I feel my edge has returned. If this view changes, I will be back with a new update for my Platinum Members.
Cash FTSE
No Change: The FTSE continues to consolidate the gains from the end of last week and I am still flat. This morning the FTSE is trading lower at 8260. I will not chase the FTSE higher as I continue to look to buy the market on any dip lower to 8130/8210 with the same 8065 tight ‘Closing Stop’’. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
I am still flat the Dow with the market trading less than 1% from all-time highs. This is hard to fathom given the price action over the past six weeks, but these are the markets we have. Today, I will continue to be a seller on any further rally to 41050/41300 with the same 41505 wider ‘’Closing Stop’’. If triggered, I will have a T/P level at 40780. Given how extended the Dow is trading I no longer want to be a buyer of the Dow at this time. If this view changes, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
No Change. I am still short the NDX from Monday at a price of 19660. I will continue to look to add to this position at 19840 while leaving my 2005 ‘’Closing Stop’’ unchanged. I will now have a T/P level on this position at 19520. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
September BUND
No Change: I am still flat the Bund as the market again traded in a narrow range yesterday. The Bund has support below from 133.00/133.70 where I will continue to be a buyer with the same 132.35 ‘’Closing Stop’’. The Bund has resistance from 135.50/136.20 where I will still be a seller with the same 136.85 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 134.30. If I am taken short, I will have a T/P level at 134.95.
Gold Rolling Contract
Gold continues to hold the 2500 support level. Seasonally September can be a difficult month for both Gold and Silver, hence my reluctance to chase the Gold market higher. Today I will continue to be a buyer on any dip lower to 2450/2465 with the same 2437 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2484.
Silver Rolling Contract
I am still flat Silver as I look for the market to play catchup with Gold’s aggressive move higher over the past two months. I will now raise my Silver buy level to 28.00/28.90 while leaving my 26.29 wider ‘’Closing Stop’’ unchanged. If I am taken long, I will have a T/P level at 29.70.
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