U.S. stocks fell from record highs amid a torrent of corporate results, while the Euro swung between gains and losses and European Bond Yields climbed from all-time lows after Mario Draghi did not give markets more of a dovish signal. All 11 industry sectors in the S&P 500 closed lower a day after the benchmark index closed at an all-time high. The Dow Jones Industrial Average slumped to the lowest two weeks as investors digested a flood of earnings. 3M initially advanced after beating estimates before turning lower, while Tesla plunged on weak results. A Federal Trade Commission probe weighed on Facebook, overshadowing impressive results. After the close or regular trading, Amazon fell after posting lower-than-forecast earnings and Alphabet exceeded revenue estimates. Stocks’ weakness, despite yesterday’s ECB dovishness, calls into question how much upside equities have left even if the Fed cuts Interest Rates as expected next week. With global leading economic indicators still weak, investors seem increasingly unwilling to keep buying without greater signs of improving fundamentals.
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For anyone following my Platinum Service it made 240 points yesterday and is now ahead by 1032 points for July, having made 1346 points in June,1722 points in May, 955 points in April, 1027 points in March, 1013 points in February and 1671 points in January. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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Earnings have been broadly positive for stocks, but worries still linger over trade and a slowing global economy. Oil was little changed as declining U.S. crude stockpiles and threats to Persian Gulf exports mingled with concerns that slower economic growth will stifle demand. For the markets, it continues to be this tug-of-war between continued policy stimulus and whether that is going to be enough to head off the slowing trend in global growth. Not helping markets yesterday was the comment from ECB President Dragi during his press conference when he said there was no discussion about cutting Interest Rates, and that any cut would come with mitigating measures. As a result the DAX fell 300 points in straight line. The S&P 500 Index decreased 0.5% to close at 3,003. The Dow Jones Industrial Average sank 0.5% to 27,141, the lowest in two weeks on the biggest dip in a month while the Nasdaq Composite Index decreased 1% to 8,238.54, the largest decrease in a month. Meanwhile in Europe, the Stoxx Europe 600 Index decreased 0.6% to 389.52, the first retreat in a week and the biggest dip in almost three weeks and the U.K.’s FTSE 100 Index dipped 0.2% to 7,489.05, the lowest in almost four weeks.
Here is a summary of the main changes in F.X. Markets:
The Bloomberg Dollar Spot Index rose 0.2% to 1,200.75, the highest in more than five weeks.
The Euro initially plunged versus the dollar after ECB President Draghi left rates unchanged but said a “significant degree” of monetary stimulus is needed and the outlook is “getting worse and worse.” It then spiked before trading little changed at $1.1144.
The Japanese Yen decreased 0.5% to 108.71 per dollar, the weakest in more than two weeks on the largest dip in almost three weeks.
The British Pound decreased 0.3% to $1.2451.
Turkey’s lira fluctuated after the Central Bank cut its key rate by the most on record. Australia’s Dollar hit its low of the session and benchmark bond yields touched a record low after Reserve Bank Governor Philip Lowe said he was prepared to cut Interest Rates again if needed
The yield on 10-year Treasuries gained three basis points to 2.07%.
The yield on two-year Treasuries climbed three basis points to 1.85%, the highest in two weeks.
Germany’s 10-year yield rose two basis points to -0.36%, the first advance in more than a week and the largest rise in two weeks.
Britain’s 10-year yield gained three basis points to 0.71%, the first advance in a week and the biggest rise in two weeks.
Gold declined 0.8% to $1,414.24 an ounce, the weakest in more than a week.
West Texas Intermediate crude was little changed at $55.89 a barrel.
This morning on the Economic Front we have German Import Prices at 7.00 am. This is followed at 1.30 pm by U.S GDP and Personal Consumption/Expenditure. Finally, at 6.00 pm we have the Baker Hughes Oil Rig Count.
September S&P 500
After a quiet week, my S&P plan worked well yesterday with the market trading lower to my 3005 buy level before rallying to my revised 3010 T/P level. Subsequently I emailed my Platinum Members to buy the S&P again at a price of 3000 with a 3007 T/P level and both of these prices were filled to give us a decent day to rescue a difficult week and I am now flat. Today I will again look to buy the S&P on any dip lower to 2986/2996 with a 2979 stop. Ahead of the weekend I do not want to be short the market.
The Euro just fell short of my 1.1090 buy level with a 1.1100 low print and I am still flat. Today I will raise my buy level to 1.1065/1.1105 with a 1.1015 stop. I will leave my 1.1220/1.1260 sell level unchanged with the same 1.1305 stop.
September Dollar Index
I am still flat the Dollar and today I will also leave my 97.80/98.20 sell level unchanged with a 98.55 stop.
When we have an important speech like we had yesterday from Dragi I waited to see what he had to say before trading. After his comment about ‘’no discussion on rates’’ the DAX fell three hundred points in a few minutes falling straight through my buy level and stop. As the move was so ‘’fast’’ I did not take a position and I am still flat. As mentioned numerous times the DAX must hold the 12180/12240 area or else we will see the market accelerate to the downside. Today I will be a small buyer on any dip to this area with a 12135 tight stop.
I am still flat the FTSE and today I will again lower my buy level slightly to 7330/7370 with a 7295 stop.
Dow Rolling Contract
My Dow plan worked well with the market trading lower to my 27100 buy level before rallying to my revised 27135 T/P level and I am now flat. The Dow has strong support from 26840/26980 and today I will be a buyer on any dip to this area with a 26770 tight stop.
My 8030 short position from late Wednesday worked well with the market trading lower to my 7990 T/P level on Dragi and I am still flat. Today I will again look to sell the market from 8040/8080 with a 8125 stop.
After a difficult time trying to call a top in the Bund all week the market obliged some what by trading higher to my 174.90 sell level before selling off to my 174.45 T/P level with a 173.50 low print and I am still flat. The Bund recovered 70 points of these large losses into the close and today I will again look to go short from 174.75/175.25 with a 175.60 stop.
Gold Rolling Contract
No Change as I am still a buyer on any dip lower to 1397/1405 with a 1391 stop.
Silver Rolling Contract
I am still flat the market and today I will lower my buy level slightly to 15.80/16.20 with the same 15.55 tight stop. If I am taken long I will have a T/P level at 16.35.