U.S. Indexes saw strength on Tuesday, as the tech-heavy NASDAQ 100 outperformed, seeing the Tech sector sit atop of the breakdown, buoyed by numerous bullish stories, ahead of GOOGL and TSLA earnings on Wednesday; 1) Taiwan export orders in June +59.4% Y/Y (exp. 49.5%); 2) TSMC set to raise prices for both advanced and mature chip production services by up to 10% in 2027; 3) NVDA disclosed a 9.3% passive stake in NBIS; 4) HUT and IREN on gains after recent order news; 5) NVDA said chips are on schedule for use in AI data centers. Once again, US/Iran headlines dominated the tape, as US/Iran tensions continue to escalate with no signs of abating, which saw energy benchmarks see strength of USD 2/bbl; some of the more notable reports were that President Trump said they will hit Pickaxe Mountain very soon, and hard, while the Yemeni Houthis have warned shipping firms to avoid loading or discharging at Saudi ports. Sectors close predominantly in the green, with only Consumer Staples and Communications in the red, with Energy the next best performing sector and supported by the aforementioned stories. The Dollar is broadly gaining versus G10 FX peers, with safe-havens lagging and USD/JPY hitting a fresh YTD high: the Australian Dollar the only one eking out marginal gains. The Pound was pressured as Prime Minster Burnham announced his first measures, essentially an unfunded removal of VAT on electricity bills. Treasuries bear flattened as rising oil prices reinforced expectations for further Fed tightening, in a week that lacks key US data or speakers, aside from earnings. Precious metals sit in the green. On the data front, the only notable US release was the ADP Employment Change, which showed 16.5k jobs were added in July, easing from the prior 19.3k and pointing to a fourth consecutive slowdown in hiring. Elsewhere, the Philadelphia Fed Non-Manufacturing Business Outlook Survey improved on the month, although neither release had a meaningful impact on Treasury trading. Instead, markets continued to look through the second-tier data, with price action driven primarily by developments in the Middle East and their implications for energy prices and inflation expectations. Attention now turns to next week’s July FOMC decision and the June PCE inflation report, while this week’s USD 13 billion 20-year bond auction will provide an important test of investor demand as geopolitical uncertainty remains elevated. Higher oil prices continued to lift Fed rate expectations, with money markets now pricing around 30bps of tightening by year-end. A 25 basis point hike is now fully priced by October, while September carries an implied probability of around 78%. Those repricing dynamics kept the front end under the greatest pressure, resulting in a bear flattening of the Treasury curve. Elsewhere, Oil closed higher by 2% and Gold by 1.5%.
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For anyone following my Platinum Service it made 290 points yesterday and is now ahead by 5546 points for July after ending June with a new record of 10527 points 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 previous 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 0.89% higher at a price of 7509.
The Dow Jones Industrial Average closed 385 points higher for a 0.74% gain at a price of 52,224.
The NASDAQ 100 closed 1.93% higher at a price of 29,155.
The Stoxx Europe 600 Index closed 0.52% higher.
This Morning, the MSCI Asia Pacific closed 0.5% lower.
This Morning, the Nikkei closed 0.3% higher at 66,229.
Currencies
The Bloomberg Dollar Spot Index closed 0.25% higher.
The Euro closed 0.13% lower at $1.1396.
The British Pound closed 0.35% lower at $1.3375.
The Japanese Yen fell 0.32% closing at $163.16.
Bonds
U.K.’s 10-Year Gilt closed 1 basis points lower at 5.04%.
Germany’s 10-Year Bund Yield closed 1 basis points higher at 3.17%
U.S.10 Year Treasury closed 2 basis points higher at 4.62%.
Commodities
West Texas Intermediate crude closed 2.26% higher at $84.84 a barrel.
Gold closed 1.4% higher at $4077.10 an ounce.
Today on the Economic front we already had the release of U.K. June CPI which rose 2.6% Y/Y versus +2.7% expected. Next, we have U.S. MBA Mortgage Application Rate at 12.00 pm. Finally, we have a 20-Year Treasury Auction at 6.00 pm.
Cash S&P 500
The S&P 500 closed higher by 0.9% on Tuesday, making it an outlier relative to our normal Treasury settlement data. In fact, yesterday’s gain of 89 basis points was nearly double the average gain on an up T-bill settlement day, which is just 49 basis points. So, we know it does not work every time, and clearly a stock like Micron rising 12% is going to skew the results. The data is the data, and whether it works consistently does not change the historical record. That said, the sample size is relatively small. I have been posting and writing about this regularly, and I am comfortable saying that today was an outlier. It was not a great day for the RSP, which rose by just 16 basis points. The divergence between the equal-weight S&P 500 and the market-cap-weighted S&P 500 highlights the impact that Micron and the semiconductor sector had on the broader index yesterday. The RSP’s performance was more in line with what one would have expected based on the historical Treasury settlement data. Technically, the Index just managed to close the gap from Friday’s decline. Now, however, it has created a similar gap up ahead of Tuesday’s rally, suggesting the potential for a pullback and retracement toward Monday’s close at 7,443. The 7,515 region has also served as an important support and resistance level since mid-May. The index will likely need to gap higher tomorrow and break above that resistance level to sustain the rally and have a chance of returning to its recent highs. However, given the historical statistics and the significant amount of liquidity leaving the market, Tuesday’s move appears more likely to have been a bounce following Friday’s and Monday’s weak performances than the start of a sustained advance. The spread between U.S. Treasuries and Japanese government bonds (JGBs) is widening again, with the five-year spread trending higher since mid-April. That widening rate differential has been one of the key factors putting downward pressure on the Japanese Yen. USD/JPY broke out, finally pushing above the upper boundary of the triangle and rising to 163.18. Based on a measured move from the height of the triangle, a move toward 165 appears to be a reasonable technical target. Yesterday’s move higher saw the S&P hit my sell range for a 7507 short position. As I want to bank some points for yesterday, I have now exited this position here at 7494 and I am now flat. The S&P has further resistance from 7515/7540 where I will again be a seller with a higher 7561 ‘Closing Stop’. The S&P will have support at Monday’s 7443 Chicago close. I will now raise my buy level to 7425/7450 with a higher 7409 tight ‘Closing Stop’. If I am taken short, I will have a T/P level at 7497. If I am taken long, I will have a T/P level at 7474.
EUR/USD
I am still long the Euro from Monday at a price of 1.1410. I will add to this position at 1.1340 while leaving my 1.1275 ‘Closing Stop’ unchanged. I will now lower my T/P level to 1.1455. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dollar Index
The Dollar traded in a narrow 25-point range on Tuesday and I am still flat. I will not chase the Dollar higher as I continue to be a buyer on any dip lower to 99.70/100.40 with the same 98.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 100.90.
Russell 2000
Just before Tuesday’s close the Russell rallied to my sell range for a now 2990 short position. I will now add to this position at 3060 while leaving my 3105 ‘Closing Stop’ unchanged. I will now raise my T/P level to 2950. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
FTSE 100
No Change: I am still flat. I will not chase the FTSE Market higher preferring to wait for a sell-off before initiating a new long position. Today, I will continue to be a buyer from 10300/10380 with the same 10215 ‘Closing Stop’. If I am taken long, I will have a T/P level at 10460. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
I am still flat. Today, I will continue to be a seller on any further rally to 52500/52800 with the same 53005 ‘Closing Stop’. If I am taken short, I will have a T/P level at 52230. I still do not want to be long the Dow at this time.
Cash NASDAQ 100
The NDX surged yesterday on the back of Micron rising over 12%. This move higher saw my 29100-sell level triggered. I have now exited this position here this morning at 28940 and I am now flat. Today, I will again be a seller from 29150/29350 with a higher 29505 ‘Closing Stop’. If I am taken short, I will have a T/P level at 28980. I still do not want to be buyer of the NDX at this time. If this view changes, I will be back with a new update for my Platinum Members.
December BUND
I am still flat as the Bund just fell shy of Tuesday’s buy range. The Bund has short-term support from 123.50/124.20 where I will continue to be an aggressive buyer with the same 122.85 ‘Closing Stop’. If I am taken long, I will have a T/P level at 124.90.
Gold Rolling Contract
I am still flat. Gold has support below from 3890/3980 where I will again be a buyer with a lower 3795 ‘Closing Stop’. If I am taken long, I will have a T/P level at 4050.
Silver Rolling Contract
I am still flat. Today, I will again be a buyer of Silver on any dip lower to 54.40/57.40 with the same 52.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 59.20.
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