U.S. Indices closed on Tuesday amid a deluge of earnings, which saw Industrials reside as the sectoral laggard and hit by Boeing (BA) (-4%) and UPS (UPS) (-10.5%) post-results, with the latter weighed on as it did not provide revenue or operating profit guidance amid the current macro uncertainty. Real Estate, Utilities, and Energy sit atop the pile, and the latter is buoyed by gains in excess of 3.5% in the energy space amid comments from President Trump and Treasury Secretary Bessent. 1) Trump on changing the Russia deadline, reiterated what he said on Monday and that it is 10 days from today [to get a deal with Ukraine on ending the war], and referred to threatened secondary sanctions on Russian oil; 2) Bessent told Chinese officials that given US secondary tariff legislation on sanctioned Russian oil, China could face high tariffs if it continues to purchase it. On trade, the US and China had trade talks yesterday, with the overwhelming readout being positive, although Bessent said he will be meeting Trump in the Oval Office this afternoon to discuss the China deal, and the decision will be up to him. Although Bessent did say China jumped the gun a little on the 90-day pause, likely referring to China Vice Commerce Minister Li stating the US and China have agreed to extend the trade truce and both sides will continue to push forward the extension of the pause of reciprocal tariffs. The Dollar extended on Monday’s gains, with the EUR lagging again, as the fallout from the US/EU trade deal for the Euro continues to be felt. Treasuries were firmer across the curve in the wake of cooling house price data, soft JOLTS, and a stellar 7 Year Treasury Auction, which sparked a notable bid in T-Notes. On the data, US consumer confidence rose more than expected, while JOLTS ticked lower, but the report painted a familiar picture of the labour market, as hiring remains fairly low, but so do layoffs. While Tuesday has largely been the “calm before the storm”, Wednesday serves up plenty of scheduled risk events with the Bank of Canada, FOMC, Microsoft/Meta earnings, ADP, GDP, QRA, BoJ after-hours, and also the aforementioned Bessent briefing to Trump on China trade talks. The number of job openings slightly fell to 7.437 million in June from 7.712 million in May, and marginally shy of the expected 7.5 million. The vacancy rate ticked lower to 4.4% from 4.6%, while the quits rate was unchanged and remains low at 2.0%, given the prior months were revised down to 2.0% from 2.1% and continues to underscore that workers with jobs are staying put and continues to signal that wage growth will not be a source of inflationary pressure. Overall, the report painted a familiar picture of the labour market, as hiring remains fairly low, but as do layoffs, which Oxford Economics notes it will allow the Federal Reserve to keep policy steady as it waits for a clearer indication of how tariffs will impact inflation and growth. US Consumer Confidence increased more than expected in July, rising to 97.2 (exp. 95), albeit from an upwardly revised 95.2 (prev. 93). The Present Situation Index fell 1.5 points to 131.5 as the cooling in consumers’ view of the labour market offset the slight improvement in consumers’ assessments of current business conditions. The Expectations Index rose 4.5 points to 74.4, helped by consumers’ outlook on the labour market and business conditions being less negative/pessimistic, as well as being more positive on income prospects. Stephanie Guichard, a Senior Economist at The Conference Board, says, “Consumers’ write-in responses showed that tariffs remained top of mind and were mostly associated with concerns that they would lead to higher prices. In addition, references to high prices and inflation rose in July, even though consumers’ average 12-month inflation expectations eased slightly to 5.8%, down from 5.9% in June and a peak of 7% in April”. Meanwhile, consumers’ assessments of their family’s current financial situation ticked lower but remained solid in July; while the future component remained relatively strong; Consumers’ perceived likelihood of a US recession over the next 12 months declined. The FOMC is widely expected to leave rates on hold, but there may be some dissent from either Governor Waller or Governor Bowman, or both, given their recent commentary; other Fed policymakers have largely toed a patient, wait-and-see approach due to the uncertainties of the tariff impact and delayed imposition of tariffs, with new tariff rates not set to come into force until August 1st. Tariffs on China are set to come into effect on August 12th, but talks early this week are looking to extend that deadline to avoid tariffs of 145% on the US side and 125% on the Chinese side. Attention at the press conference will be on Chair Powell, to see if he offers any guidance for rates ahead, or if it may soon be time to lower rates, depending on the data, albeit the Fed has been reluctant to commit to future moves in the past, given the ongoing uncertainties around trade policies. During the Press Conference, Powell will also likely be quizzed about his future given President Trumpʼs continuing criticisms of the Fed Chair. Powell tends to avoid these sorts of questions, usually stating that he is focused on the Fed’s mandate. Note, the press conference may also see Powell quizzed on the accuracy of recent data, with an increasing number of economists worried about the accuracy and whether it could distort Fed policy. Elsewhere, Oil surged, closing higher by almost 4% while Gold ended Tuesday’s session with a 0.4% gain.
To mark my 3225th 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 20 points yesterday and is now ahead by 3663 points for July 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 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 0.30% lower at a price of 6370.
The Dow Jones Industrial Average closed 204 points lower for a 0.46% loss at a price of 44,632.
The NASDAQ 100 closed 0.21% lower at a price of 23,308.
The Stoxx Europe 600 Index closed 0.33% higher.
This Morning, the MSCI Asia Pacific closed 0.3% higher.
This Morning, the Nikkei closed 0.12% lower at a price of 40,625.
Currencies
The Bloomberg Dollar Spot Index closed 0.29% higher.
The Euro closed 0.36% lower at $1.1548.
The British Pound closed 0.01% lower at $1.3350.
The Japanese Yen rose 0.02% closing at $148.49.
Bonds
U.K.’s 10-Year Gilt closed 2 basis points lower at 4.64%.
Germany’s 10-Year Bund Yield closed 1 basis points higher at 2.70%
U.S.10 Year Treasury closed 7 basis points lower at 4.35%.
Commodities
West Texas Intermediate crude closed 3.87% higher at $69.36 a barrel.
Gold closed 0.39% higher at $3328.10 an ounce.
This morning on the Economic Front we already had the release of German Retail Sales which rose 1% versus +0.5% expected. Next, we have Euro-Zone Consumer Confidence at 10.00 am and U.S. MBA Mortgage Applications at 12.00 pm. This is followed by the ADP Employment Change at 1.15 pm and GDP at 1.30 pm. Next, we have the Bank of Canada Rate Announcement at 2.45 pm and U.S. Pending Home Sales at 3.00 pm. Finally, we have the FOMC Statement at 7.00 pm and Fed Chair Powell’s Press Conference at 7.30 pm.
Cash S&P 500
The JOLTS data, combined with a strong 7-year Treasury auction, pushed rates lower across the curve, sending the 10-year yield down nearly 8 bps. However, the 10-year remains just above critical support at 4.33%, a level that has held firm for several weeks. It did not stop the Dollar Index from rising for a fourth consecutive day. The index faces considerable resistance around 99, suggesting we might see a day or two of consolidation ahead. However, the RSI indicates that the DXY likely has further room to climb. Meanwhile, the divergence between the US 5-year and Japan 5-year rate spread versus USDJPY continues to widen. The rate spread is currently testing key support, raising questions about how much longer USDJPY can sustain its opposing move. The last notable divergence of this magnitude occurred in August of last year. Another notable divergence is occurring between the 10-year Treasury rate and the 1-year CPI inflation swap—a scenario that is relatively uncommon historically. Also notable is the divergence between the S&P 500 and high-yield credit spreads. Interestingly, the HY CDX Index has not confirmed the recent highs in the S&P 500 and has, in fact, been moving in the opposite direction lately. There are numerous mixed signals in the market right now, with various indicators hovering at critical inflection points. As it stands, nothing appears to be breaking decisively or giving a clear signal—leaving us stuck in a holding pattern. By most accounts, rates should be higher, spreads wider, and stocks lower—yet here we are, with no meaningful moves. Despite the S&P closing lower yesterday the 14-Day RSI closed at an overbought 72. All eyes will be on the FOMC Statement and Powell Press Conference. I am not expecting any change in rates per my commentary above. I am still short the S&P at an average rate of 6334. I will continue to look to add to this position at 6425 with a lower 6447 ‘Closing Stop’. If my 6425 sell level is triggered, I will raise my T/P level to 6365. If my next sell level is not triggered and the S&P has a small sell-off I will exit my 6334 existing short position at 6348 and reassess. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
EUR/USD
The Euro closed lower for the fourth consecutive trading session and I am still flat. I will now lower my sell level to 1.1630/1.1710 with a lower 1.1805 ‘Closing Stop’. If I am taken short, I will have a T/P level at 1.1560.
Dollar Index
The Dollar never came close to Tuesday’s buy range and I am still flat. Today, I will raise my buy level to 97.60/98.40 with a higher 96.95 ‘Closing Stop’. If I am taken long, I will have a T/P level at 99.10. I still do not want to be short the Dollar at this time.
Russell 2000
I am still flat the Russell as the market never came close to Tuesday’s sell range. I will now lower my sell level to 2275/2345 with a lower 2405 ‘Closing Stop’ unchanged. If triggered, I will have a T/P level at 2230.
FTSE 100
The FTSE soared again yesterday. This move higher saw my 9140-sell level triggered. I am still short with a now higher 9080 T/P level. I will add to this position at 9210 while leaving my 9275 ‘Closing Stop’ unchanged. If any of the above levels are hit, I will be back with a now update for my Platinum Members.
Dow Rolling Contract
No Change: Today, I will continue to be a seller on any further rally to 45200/45450 with the same 45605 tight ‘Closing Stop’. If I am taken short, I will have a T/P level at 44910.
Cash NASDAQ 100
The NDX sold off to my 23300 T/P level on my latest 23320 average short position and I am now flat. The NDX has resistance from 23450/23610 where I will again be a seller with a higher 23805 ‘Closing Stop’. If I am taken short, I will have a T/P level at 23310. I still do not want to be long the NDX at this time.
December BUND
I am still flat as the Bund never came close to Tuesday’s buy range. Ahead of the FOMC this evening I will continue to be a buyer of the Bund on any dip lower to 128.40/129.20 with the same 127.75 ‘Closing Stop’. If I am taken long, I will have a T/P level at 129.70. I still do not want to be short the Bund at this time.
Gold Rolling Contract
I am still flat. As I am still long Silver, I will leave my Gold buy level unchanged at 3255/3275 with the same 3239 ‘Closing Stop’. If I am taken long, I will have a T/P level at 3298.
Silver Rolling Contract
No Change: I am still long Silver from Monday morning at a price of 38.00. I will add to this trade at 37.20 while leaving the same 35.95 ‘Closing Stop’. I will now lower my T/P level to 38.40. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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