Better earnings from GE and General Motors saw the U.S. Equity Markets close higher on Tuesday. After the close both Google and Microsoft reported better than expected earnings. The Fed is set to announce a 25-basis point rate hike this evening, bringing rates to a 22-year high. They are expected to announce a ‘’pause’’ in their statement to allow for the 12 rate hikes made already in the past 15 months to take hold. General Electric (GE) raised its full-year adjusted profit forecast, citing steady demand for aircraft engine spare parts and services. The company now expects its 2023 adjusted profit per share to be between $2.10 and $2.30, up from the previous forecast of $1.70 to $2.00. GE Aerospace is experiencing rapid growth, meeting customer demands and strengthening its services, while GE Vernova is progressing towards its spin-off as Renewable Energy improves and Power continues to deliver, according to CEO Larry Culp. The recovery in aviation from the pandemic has been faster than expected, leading to increased demand for aftermarket services due to shortages of commercial planes. General Motors (GM) increased its full-year profit guidance, citing plans to reduce investment in new products and cut operating costs by an additional $1 billion through the end of next year. The company reported a 52% rise in net income for the second quarter, reaching $2.6 billion, with a 25% increase in revenue compared to the previous year’s period. GM now expects full-year net income of $9.3 billion to $10.7 billion, up from the previous forecast of $8.4 billion to $9.9 billion. The improved outlook reflects stronger demand and higher pricing in the automotive market. The latest survey data from S&P Global shows that U.S. business activity slowed to a five-month low in July. The flash U.S. Composite PMI index, which tracks manufacturing and service sectors, fell to a reading of 52 in July from 53.2 in June. While this indicates the sixth straight month of growth, the service sector showed softening conditions, dragging down overall expansion. The data suggests that the U.S. economy is still growing as the third quarter begins, but at a slower rate compared to the previous quarter. The survey indicates a GDP expansion rate of approximately 1.5% at the start of the third quarter, down from the 2% pace in the second quarter. The Federal Deposit Insurance Corp. (FDIC) has revealed that several U.S. banks have incorrectly reported the amount of their uninsured deposits. In response to increased scrutiny, 55 banks have restated their deposit data in regulatory filings. The FDIC found that some banks were excluding certain uninsured deposits that were collateralised by pledged assets, as well as those held by bank subsidiaries. The FDIC clarified that the existence of collateral does not affect the portion of a deposit covered by federal deposit insurance. European Markets closed higher. The recent decline in Germany’s business sentiment, as reflected in the IFO Business Climate Index, suggests that the country’s economy may still be in recession. IFO President Clemens Fuest expressed concerns about the German economy’s struggle to recover, stating that the data indicates a continued recessionary phase. The expectations gauge also dropped in July, indicating a lack of optimism among businesses. In Asia, Investors are starting to see promise in Xi Jinping’s efforts to revive economic growth in China. Despite scepticism about the lack of specific details in the latest promises from the ruling Politburo, traders are optimistic and have driven gains in stocks, corporate debt, and the Yuan. The belief is that a more forceful pro-growth approach from the top leadership will lead to a rally in the market and address various challenges, such as local government debt and a sluggish housing market. The South Korean economy experienced an uptick in growth during the second quarter, primarily driven by a positive contribution from net exports, according to official advance estimates released by the Bank of Korea. Gross domestic product (“GDP”) grew by a seasonally adjusted 0.6% in April-June, surpassing market expectations and exceeding the 0.3% growth recorded in the previous quarter. This growth rate exceeded the median forecast of a 0.5% rise in a Reuters survey of economists and marked the highest quarterly growth since the second quarter of 2022. Elsewhere, Oil rose a further 0.70% while Gold closed 0.5% higher despite a stronger Dollar.
To mark my 2800th 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 made 62 points yesterday and is now down by 60 points for 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 0.28% higher at a price of 4567.
The Dow Jones Industrial Average closed 27 points higher for a 0.0.08% gain at a price of 35,438.
The NASDAQ 100 closed 0.73% higher at a price of 15,561.
The Stoxx Europe 600 Index closed 0.47% higher.
This morning, the MSCI Asia Pacific closed 0.3% lower.
This morning, the Nikkei closed 0.043% lower at a price of 32,668.
Currencies
The Bloomberg Dollar Spot Index closed 0.4% higher.
The Euro closed 0.6% lower at $1.1064.
The British Pound closed 0.2% lower at 1.2837.
The Japanese Yen fell 0.1% closing at $141.48.
Bonds
Germany’s 10-year yield closed 1 basis points lower at 2.40%.
Britain’s 10-year yield closed 2 basis points higher at 4.27%.
U.S.10 Year Treasury closed 5 basis points higher at 3.89%
Commodities
West Texas Intermediate crude closed 0.7% higher at $79.35 a barrel.
Gold closed 0.5% higher at $1965.10 an ounce.
This morning on the Economic Front we have the German IFO Survey and ECB Bank Lending Survey at 9.00 am. Next, we have U.S. Housing Price Index and Consumer Confidence at 3.00 pm. Finally, we have a 5-year Treasury Auction at 6.00 pm.
Cash S&P 500
Yesterday was another quiet session for the S&P. With the Dow closing higher for 12 consecutive trading sessions which is a rare event, history tells us that these winning streaks are followed by a major correction. The problem is the timing. As I have said multiple times tops are a process leading to many frustrating days of trading. The risk/reward in being a buyer at these levels is lousy. The S&P squeaked a new high yesterday afternoon, hitting my second sell level at 4580 for a now 4542 average short position. For now, the S&P remains immune to filling any of its nine ‘’Open Gaps’’ from March. Ahead of the Fed this evening there is zero fear or interest in any downside protection which is just nuts given the 350 Handle rally since the Fed injected liquidity to protect the banking system. I will now raise my T/P level on my short S&P position to 4530 with no stop for now. If this view changes I will be back with a new update for my Platinum Members.
EUR/USD
I am still long the Euro from early yesterday morning at 1.1060. I will continue to look to add to this position on any further move lower to 1.1000 with the same 1.0935 ‘’Closing Stop’’. Meanwhile I will leave my 1.1095 T/P level unchanged. If any of the above levels are hit, UI will be back with a new update for my Platinum Members.
June Dollar Index
No Change. The Dollar traded in a narrow range as investors wait for this evening’s FOMC Statement and Powell press conference. I am still a buyer on any dip lower to 100.10/100.70 with the same 99.55 ‘’Closing Stop’’.
Cash DAX
The DAX just missed yesterday’s sell range and I am still flat. As I am now short all three American Indexes, I will now raise my DAX sell level to 16310/16400 with a higher 16505 ‘’Closing Stop’’.
Cash FTSE
No Change. The FTSE has resistance from 7790/7860 where I will be a seller with a 7915 tight ‘’Closing Stop’’. Meanwhile, I will continue to be a buyer on any dip lower to 7530/7610 with the same 7475 ‘‘’Closing Stop’’.
Dow Rolling Contract
The Dow closed higher for the 12h consecutive trading session. As far as I know the record for consecutive Dow gains is 13. The 14-Day RSI again closed at an even more overbought 75 while the ‘’Fear & Greed Index fell slightly closing at 82 last night. This move higher saw my second sell level at 34500 triggered for a now 34368 average short position. I will now raise my T/P level to 34180 while leaving my 34705 ‘’Closing Stop’’ unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
The NDX led yesterday’s gains aided by results from NXPI, while Futures reacted after-hours tom the better-than-expected earnings from Google, Microsoft, Snap and Texas Instruments. Yesterday’s rally saw my sell range hit and I am now short at 15580. I will add to this position at 15730 while leaving my 15805 ‘’Closing Stop’’ unchanged. I will have a T/P level on this position at 15470. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
September BUND
I am still flat. The Bund has support from 131.40/.132.20 where I will be a small buyer with a 130.85 ‘’Closing Stop’’. Meanwhile, my only interest in selling the Bund is still on a rally higher to 134.30/135.10 with the same 136.05 ‘’Closing Stop’’.
Gold Rolling Contract
I am still flat with no change despite Gold having a small rally yesterday. I will continue to be a buyer on any dip lower to 1927/1942 with the same 1915 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 1953.
Silver Rolling Contract
I am still long from Monday at a price of 24.50. I will continue to look to add to this position on any further move lower to 23.80 with the same no stop. I will leave my 25.20 T/P level unchanged. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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