U.S. Equity Markets reversed all of Monday’s losses, closing higher across the board as the Month and Quarter End Mark-up gathered pace. The NASDAQ 100 led Tuesday’s gains, closing higher by 1.75%. The VIX closed lower by 3.58% at a price of 13.74. Treasury Secretary Janet Yellen is scheduled to visit Beijing in early July for the first major economic discussions with her newly appointed Chinese counterpart. Following recent strained relations between the United States and China, Yellen’s visit to Beijing would mark the second trip by a U.S. cabinet official to engage with Chinese counterparts. Secretary of State Antony Blinken had recently completed his visit to China, during which he held meetings with his counterpart and had a brief audience with Chinese President Xi Jinping. This ongoing high-level engagement signifies an attempt to address and navigate the challenges faced by the two largest economies in the world. HSBC Asset Management, in its mid-year outlook, predicts that the U.S. will experience an economic downturn in the fourth quarter, followed by a year of contraction and a European recession in 2024. The asset manager emphasises that recession warnings are flashing red for many economies, and the policies implemented by governments and central banks are not aligned with the performance of stock and bond markets. Joseph Little, Global Chief Strategist at HSBC, notes that while certain sectors of the economy have shown resilience thus far, the overall balance of risks indicates a high risk of recession. Walgreens (WBA), the retail pharmacy chain, has revised its full-year earnings guidance downwards after missing Wall Street expectations. The company attributed the disappointing results to reduced consumer spending and a decline in demand for COVID-19 vaccines and testing. As a result, Walgreens has lowered its earnings guidance for the full year to a range of $4.00 to $4.05 per share, down from the previous forecast of $4.45 to $4.65 per share. In response, CEO Rosalind Brewer announced an increased cost-cutting initiative of $4.1 billion and immediate actions to enhance profitability in the company’s U.S. health-care segment. Brewer expressed confidence in the turnaround strategy, aiming to drive sustainable core growth and generate long-term value for shareholders. European Markets finally closed higher after a six-day losing streak. European Central Bank (“ECB”) President Christine Lagarde indicated that the ECB is unlikely to declare an end to its cycle of interest-rate increases in the near future. While the ECB may temporarily pause its hiking campaign, Lagarde emphasised that there is still a bias towards monetary tightening. She reiterated that the ECB plans to raise borrowing costs for the ninth consecutive time in July to combat inflation and that unless there is a significant change in the economic outlook, the ECB will continue with its planned rate increases. Swati Dhingra, a rate-setter at the Bank of England, anticipates a reduction in pressure on U.K. households due to significant declines in cost inflation for producers. She suggests that these decreases in producer price inflation will likely be reflected in consumer prices in the near future, offering promising signs for easing consumer price inflation. Dhingra highlighted that changes in consumer price inflation tend to follow trends in producer price inflation, making it a valuable leading indicator for the long-term price evolution in the country. In Asia, Premier Li Qiang of China has cautioned against governments politicising their economies, highlighting the potential consequences of such actions. Speaking at the World Economic Forum’s Annual Meeting of the New Champions in Tianjin, Premier Li expressed concern over the growing trend of invisible barriers, which he believes is leading to the fragmentation and even confrontation of the world. His remarks came as the United States and Europe seek to minimise their reliance on China by diversifying their supply chains, a move commonly referred to as “de-risking.” Elsewhere, Oil fell 2.41% while despite a weaker Dollar, Gold closed lower by 0.50%.
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 49 points yesterday and is now ahead by 2743 points for June. 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 1.15% higher at a price of 4378.
The Dow Jones Industrial Average closed 212 points higher for a 0.63% gain at a price of 33,926.
The NASDAQ 100 closed 1.75% higher at a price of 14,975.
The Stoxx Europe 600 Index closed 0.09% higher.
This morning, the MSCI Asia Pacific closed 0.6% higher.
This morning, the Nikkei closed 2.02% higher at a price of 33,194.
Currencies
The Bloomberg Dollar Spot Index closed 0.29% lower.
The Euro closed 0.3% higher at $1.0960.
The British Pound closed 0.1% higher at 1.2743.
The Japanese Yen fell 0.5% closing at $143.93.
Bonds
Germany’s 10-year yield closed 5 basis points higher at 2.36%.
Britain’s 10-year yield closed 5 basis points higher at 4.35%.
U.S.10 Year Treasury closed 3 basis points higher at 3.75%.
Commodities
West Texas Intermediate crude closed 2.41% lower at $67.70 a barrel.
Gold closed 0.5% lower at $1914.10 an ounce.
This morning on the Economic Front we already had the release of German GFK Consumer Confidence which came in at -25.4 versus -23.0 expected. At 9.00 am we have Euro-Zone Money Supply and a speech from ECB Member De Guindos, followed by a speech from ECB Member Lane. At the same time the UK’s Pill will also be speaking. Next, we have U.S. MBA Mortgage Applications at 12.00 pm and the Bank of England Quarterly Bulletin. At 1.30 pm we have Wholesale Inventories. Finally at 2.30 pm we have a panel discussion in Portugal where Fed Chair Powell, ECB President Lagarde and the Bank of England Governor Bailey are participating.
Cash S&P 500
After a week of nice downward price action with plenty of two-way price action yesterday saw a vertical move higher in both the S&P and NDX. Frustratingly, the S&P missed my 4328-buy level by four Handles before rallying 50 Handles into the close. Nothing matters whether it is higher rates, aggressive talk from the Fed or the report from HSBC that I reported on above. There is every chance that given the seasonality we could hit new all-time highs over the coming months. However, with the $NYSI max overbought with plenty of room to move lower I cannot be an aggressive buyer at these levels. This is not a good risk/reward in my opinion. The S&P has resistance from 4400/4415 where I will be a small seller with a 4431 tight ‘’Closing Stop’’. I will now move my buy level higher to 4332/4347 where I will be a small buyer with a 4319 ‘’Closing Stop’’.
EUR/USD
I have said a number of times that the Euro dynamic has changed. The Economic news has been dreadful out of Europe yet the Euro will not fall. Remember a market that cannot fall on bad news has to be respected. I am looking for the Euro to trade higher to 1.12 over the coming weeks. Today, I will raise my buy level to 1.0840/1.0910 with a higher 1.0785 ‘’Closing Stop’’.
June Dollar Index
The Dollar traded in a narrow 25-point range yesterday and I am still flat. Ahead of today’s economic data I will now lower my buy level to 101.40/102.00 with a lower 100.85 ‘’Closing Stop’’. If triggered, I will have a T/P level at 102.45.
Cash DAX
Frustratingly, the DAX missed my initial 15740 buy level by 16 points before having a nice 150-point rally into the European Close. Despite yesterday’s impressive rally I am reluctant to chase the DAX higher, only raising my buy level to 15750/15830 with a higher 15685 ‘’Closing Stop’’. I still do not want to be short the DAX at this time.
Cash FTSE
My FTSE plan worked well as the market traded lower to my 7440-buy level before rallying to my revised 7471 T/P level and I am now flat. Despite yesterday’s gain the price action in the FTSE has been non-existent with small trading ranges each day. The FTSE has support from 7390/7450 where I will again be a buyer with a 7335 ‘’Closing Stop’’.
Dow Rolling Contract
I am still flat the Dow as the market never came close to yesterday’s buy range. The sell-off over the past two trading sessions saw the 50-Day Moving Average successfully defended (33613) as we are now trading 300 points above this key support level. I will now raise my buy level to 33520/33770 with a higher 33395 ‘’Closing Stop’’. I still do not want to be short the Dow at this time.
Cash NASDAQ 100
The NDX never came close to yesterday’s buy range before spending the rest of the session reversing Monday’s sell-off. Yesterday’s rally puts to bed any real chance of a sell-off ahead of the 4th of July weekend. I will now raise my buy level to 14650/14800 with a higher 14535 ‘’Closing Stop’’. I still do not want to be short the NDX at this time.
September BUND
This morning the Bund hit my 134.00 buy level. As I want to continue to bank points when available I emailed my Platinum Members to exit any long position at 134.18 and I am now flat. The Bund has support from 132.80/133.60 where I will be an aggressive buyer with a lower 132.15 ‘’Closing Stop’’.
Gold Rolling Contract
I am still flat as Gold fell shy of yesterday’s buy range. The price action in Gold is heavy with every rally met by aggressive selling. My strategy of buying dips has worked really well over the past 18 months. Even though every letter writer continues to talk up the price of Gold we are seeing savvy investors selling the rallies which is a big change. I said yesterday that as long as Gold stays below 1960 there is every chance we can test the 1850 major support level. However, even though I do not like the Gold price action I am afraid to be short. Today, I will again lower my buy level to 1885/1900 with a wider 1869 ‘’Closing Stop’’.
Silver Rolling Contract
No Change. I am still long at an average rate of 23.63 with the same 24.40 T/P level. I will continue to have no stop on this position. If this changes I will be back with anew update for my Platinum Members.
Recent Comments