An up day for American Indexes was not unexpected given the seasonality. What was unexpected was the VIX crush, falling 12.75% to sit at 2023 lows at a price of 15.85. The fall in the VIX is actually the lowest read since November 2021. Salesforce (CRM) reported higher first-quarter profit, surpassing Wall Street expectations, signalling that its cost-cutting efforts as part of its turnaround plan are yielding positive results. The company’s margins came in ahead of its own projections, indicating effective cost management. Salesforce also raised its earnings outlook and margin targets for the year while maintaining its revenue guidance. The House of Representatives has passed debt-limit legislation negotiated by President Joe Biden and Speaker Kevin McCarthy. The bill aims to place limits on government spending until the 2024 election and prevent a potential U.S. default, which could have severe economic consequences. The legislation received bipartisan support, with 314 votes in favour and 117 against. It will now move to the Senate for further consideration, as the deadline for potential default approaches. U.S. employers experienced an unexpected surge in job vacancies in April, reaching the highest level in three months, according to the Labour Department’s Job Openings and Labour Turnover Survey (JOLTS) Available job positions rose to 10.1 million, up from a revised 9.75 million in March. Despite the uptick, the larger trend continues to point towards an easing labour market, albeit at a slow pace. According to the Federal Reserve’s Beige Book survey of regional business contacts, the U.S. economy has displayed signs of cooling in recent weeks, with hiring and inflation experiencing slight easing. The report, published two weeks before each meeting of the policy-setting Federal Open Market Committee, stated that prices moderately rose during the reporting period, although the rate of increase slowed in many districts. This data falls mostly inline with recent metrics pointing towards an economy that is still growing, but at a declining rate. Federal Reserve officials hinted at their intention to maintain interest rates at their current level in June, while also keeping the option open for potential rate hikes in the future. Governor Philip Jefferson stated that forgoing a rate increase in June would allow policymakers to evaluate data while still leaving room for possible tightening measures later on. European Markets closed higher. Euro-Zone inflation dropped more than anticipated, reaching its lowest level since February 2022, due to declining energy prices and a drop in food inflation. Annual consumer prices rose by 6.1% in May, down from 7% in April, according to Eurostat. Despite easing inflation, the central bank emphasised the need for further interest rate hikes to address persistent price pressures. Klaas Knot, a member of the European Central Bank (ECB) Governing Council, suggested that investors may need to revise their expectations of future interest rate cuts in 2024. Knot highlighted that financial markets are already pricing in rate cuts for next year, but there is a possibility of adjustments to these expectations, which could lead to market corrections. Knot previously stated that once rates reach their peak, they are expected to remain at that level for a significant duration. In Asia, China’s factory activity shifted from a decline to growth in May, as reported by the Caixin/S&P Global manufacturing purchasing managers’ index (PMI). This growth was primarily driven by improvements in production and demand, providing relief to struggling firms that have faced plummeting profits. China’s recovery from the strict COVID-19 restrictions has been uneven with various economic indicators for April, such as imports, factory gate prices, and property investment, showing a decline. The swing to growth in factory activity indicates a positive development but underlines the challenges that persist in the country’s economic recovery process. Elsewhere, Oil surged 2.95% while a weaker Dollar saw Gold end Thursday with a gain of 0.60%.
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 287 points yesterday on the first trading session 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 0.99% higher at a price of 4221.
The Dow Jones Industrial Average closed 153 points higher for a 0.47% gain at a price of 33,061.
The NASDAQ 100 closed 1.31% higher at a price of 14.441.
The Stoxx Europe 600 Index closed 0.78% higher.
Yesterday, the MSCI Asia Pacific closed 0.80% higher.
Yesterday, the Nikkei closed 0.84% higher at a price of 31,148.
Currencies
The Bloomberg Dollar Spot Index closed 0.50% lower.
The Euro closed 0.6% higher at $1.0755.
The British Pound closed 0.7% higher at 1.2523.
The Japanese Yen rose 0.3% closing at $138.80.
Bonds
Germany’s 10-year yield closed 3 basis points lower at 2.25%.
Britain’s 10-year yield closed 7 basis points lower at 4.11%.
U.S.10 Year Treasury closed 5 basis points lower at 3.60%.
Commodities
West Texas Intermediate crude closed 2.95% higher at $70.10 a barrel.
Gold closed 0.60% higher at $1977.10 an ounce.
This morning on the Economic Front we have no data of note from either the U.K. or the Euro-Zone. At 1.30 pm we have U.S. Non-Farm Payrolls, including Average Earnings and the Unemployment Rate.
Cash S&P 500
The combination of debt ceiling relief, lower bond yields, lower Dollar and better earnings saw the S&P reverse off its 4170-afternoon low to rally 50 Handles into the close. Although the S&P is extremely complacent ahead of the liquidity drain I am happy to be a buyer of dips given the max oversold readings for both the $NYSI and $SPBPX. Frustratingly, the S&P missed yesterday’s 4167 buy level by just three Handles. At least we were not short. I will now raise my S&P buy level to 4180/4195 with a higher 4169 ‘’Closing Stop’’. The S&P has short-term resistance from 4253/4268 where I will be a small seller with a 4282 ‘’Closing Stop’’.
EUR/USD
The Euro had a nice rally. I used this rally to exit my 1.0735 average long position at my revised 1.0762 T/P level as emailed to my Platinum Members and I am now flat. Today, I will again be a buyer on any dip lower to 1.0650/1.0720 with a 1.0595 lower ‘’Closing Stop’’
June Dollar Index
My short 104.35 Dollar position worked well as the market traded lower to my 103.90 T/P level and I am now flat. The Dollar has strong resistance from 104.40/105.00 where I will again be a seller with a 105.65 ‘’Closing Stop’’.
Cash DAX
The DAX hit an afternoon low at 15695 before rallying over 200 points into the New York close, hitting my initial 15900 sell level. As I did not want to be short overnight, I covered this position at my revised 15885 T/P level and I am now flat. The DAX has further resistance from 16030/16130 where I will again be a seller with a higher 16205 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 15950.
Cash FTSE
No Change. I am still long at an average rate of 7490. I will now lower my T/P level to 7520 as we wait to see the latest Payroll data from the U.S. at 1.30 pm. Meanwhile, I will leave my 7395 ‘’Closing Stop’’ unchanged.
Dow Rolling Contract
My Dow plan worked well as the market traded lower to my 32720-buy level before rallying over 400 points. Unfortunately, I covered this position too early at 32873 and I am still flat. With the $NYSI still max oversold I am comfortable in being a buyer of dips. This buying of dips occurs even though the Dow is still below its 50-Day Moving Average at 33339. Today, my buy level will be from 32650/32900 with a higher 32495 ‘’Closing Stop’’.
Cash NASDAQ 100
The NDX did not say soft for long leading yesterday’s gain higher. This up move saw my 14420-sell level triggered. With the 14-Day RSI closing at a severely overbought reading of 74 I am comfortable in being short. I will add to this position at 14570 while leaving my 14705 ‘’Closing Stop’’ unchanged. I will now raise my T/P level on this position to 14320. If any of the above levels are hit I will be back with anew update for my Platinum Members.
June BUND
I am still flat the Bund as the market continues to build on earlier gains this week. Ahead of the Payroll data I will not chase the market higher leaving my 134.60/135.40 buy level unchanged with the same 133.85 ‘’Closing Stop’’.
Gold Rolling Contract
No Change. I am still a buyer on any dip lower to 1931/1946 with the same 1919 ‘’Closing Stop’’.
Silver Rolling Contract
My latest long 23.05 Silver position worked well as the market finally rose to my 23.70 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 22.70/23.50 with the same no stop.
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