Technology Shares surged yesterday following the release of earnings from NVIDIA. The NASDAQ ended Thursday with a gain of 2.5%. This move higher saw the VIX close lower by 4.50% at a price of 19.14. Nvidia (NVDA) has issued a strong projection for its second-quarter revenue, surpassing expectations on Wall Street by more than 50%. The company also revealed its plans to increase its supply in order to meet the rising demand for its artificial intelligence (AI) chips, which are utilised in powering ChatGPT and similar services. Following this news, Nvidia’s stock witnessed a significant surge of up to 28% in yesterday’s session. During his virtual appearance at the Wall Street Journal ‘s CEO Council Summit event, Elon Musk discussed the creation of an artificial intelligence (“AI”) business that can compete with the likes of Google (GOOGL)and Microsoft (MSFT). He also hinted at the possibility of involving Twitter and other various parts of his corporate empire in this venture. Musk even predicted that Twitter could soon end its financial losses. Given Tesla’s use of AI in enhancing its autopilot and self-driving technologies, Musk suggested that Twitter and Tesla could potentially collaborate as partners in an AI company, drawing a parallel to the relationship between Microsoft and OpenAI. According to JPMorgan Chase (JPM), the U.S. has a 25% chance of running out of cash before a deal to raise the debt limit is reached. Still, the government will likely raise the debt ceiling in time, according to the company’s chief U.S. economist Michael Feroli. He also remarked that the chances of passing that deadline without an increase are increasing. Fitch Ratings has issued a warning that it may downgrade the credit ratings of the United States due to the increasing political division that is impeding a resolution to the nation’s debt ceiling crisis. The ratings agency expressed concern over the lack of progress in raising or suspending the debt limit despite the approaching deadline. In response to this news, the value of the safe-haven Japanese Yen briefly rose before retracing some of its gains, while there was a modest decline in Treasury futures. Opposing viewpoints on the need for more interest-rate hikes dominated the Federal Reserve’s May meeting. Some participants said that further policy tightening might not be required if the economy improved as forecast, while others expressed concerns about the slow progress in achieving the 2% inflation target. European Markets closed lower. During a session with lawmakers in Brussels, European Central Bank (ECB) Vice President Luis de Guindos highlighted the potential risks and factors influencing inflation. He mentioned that upward risks to inflation originate from increasing wages and expanding profit margins. On the other hand, potential downside risks include a potential decline in lending if the banking sector faces renewed pressure. A research paper from the London School of Economics reported that the U.K.’s departure from the European Union has added nearly £7 billion (roughly $9 billion) – or £250 per household – in extra food costs between the end of 2019 and March 2023. Had the U.K. remained in the EU, it would have shaved 8% off the 25% food inflation over that time frame. In Asia, South Korea’s Producer Prices rose at the slowest rate in 27 months in April, as agricultural and utility prices declined, according to data released by the central bank. The Producer Price Index (PPI) increased by 1.6% in April compared to the same month the previous year, which is a slower growth compared to the 3.3% rise recorded in March. This marks the slowest growth rate since January 2021. Elsewhere, Oil fell 3.38% while a stronger Dollar saw Gold close lower by 1.1%.
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For anyone following my Platinum Service it lost 75 points yesterday and is now ahead by 2422 points for May. 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
The S&P 500 closed 0.88% higher at a price of 4151.
The Dow Jones Industrial Average closed 35 points lower for a 0.11% loss at a price of 32,764.
The NASDAQ 100 closed 2.46% higher at a price of 13,938.
The Stoxx Europe 600 Index closed 0.24% lower.
Yesterday, the MSCI Asia Pacific closed 0.60% higher.
Yesterday, the Nikkei closed 0.39% higher at a price of 30,801.
The Bloomberg Dollar Spot Index closed 0.50% higher.
The Euro closed 0.2% lower at $1.0723.
The British Pound closed 0.3% lower at 1.2320.
The Japanese Yen fell 0.5% closing at $140.11.
Germany’s 10-year yield closed 6 basis points higher at 2.54%.
Britain’s 10-year yield closed 16 basis points higher at 4.37%.
U.S.10 Year Treasury closed 7 basis points higher at 3.82%.
West Texas Intermediate crude closed 3.38% lower at $71.83 a barrel.
Gold closed 1.1% lower at $1941.10 an ounce.
This morning on the Economic Front we have U.K. Retail Sales at 7.00 am. This is followed by U.S. Personal Income/Spending, PCE, Durable Goods Orders and the Trade Balance at 1.30 pm. Finally, we have the University of Michigan Consumer Sentiment Index at 3.00 pm.
Cash S&P 500
I am still flat the S&P as the market never came close to yesterday’s buy range. The 2.5% rally in the NDX helped the S&P to close higher by 0.88% after a quiet session that saw very little two-way price action after the ‘’Opening Gap’’. Ahead of the long-weekend I will be a small seller on any further rally to 4185/4200 with a 4211 tight ‘’Closing Stop’’. I will now raise my buy level to 4112/4127 with a higher 4099 ‘’Closing Stop’’.
No Change. I am still long from Tuesday at 1.0770 with the same 1.0820 T/P level. I will add to this position at 1.0700 while leaving my 1.0635 ‘’Closing Stop’’ unchanged.
June Dollar Index
The Dollar rallied 0.5% yesterday, hitting my 104.05 sell level. I am still short and I will add to this position at 104.65 while leaving my 105.05 ‘’Closing Stop’’ unchanged. I will now raise my T/P level to 103.60. I still do not want to be long the Dollar at this time.
No Change. I am still a seller on any further rally to 15980/16080 with the same t 16205 ‘’Closing Stop’’.
Gilt Yields rising to a three-month high at 4.37% saw the FTSE stop me out of my 7660 long position at my 7585 tight stop and I am now flat. With London closed on Monday I am going to stay flat the FTSE until the markets re-open on Tuesday morning.
Dow Rolling Contract
No Change. I am still long from Wednesday at an average price of 32955. With the $NYSI and $SPBPX maximum oversold I am comfortable with my long Dow position. It is a long time when I have seen such diverse markets. Higher Bond Yields have not affected the A.I. driven tech stocks to severely overbought readings. I will leave my 32695 ‘’Closing Stop’’ unchanged while lowering my T/P level to 33030. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash NASDAQ 100
Incredible! The 28% rise in NVIDIA shares saw the NDX end yesterday with a 340-point gain (2.50%). Thankfully, we exited last week’s short position on Wednesday at 13625 as the NDX traded the whole of yesterday’s sell range for a now 13905 average short position. I will leave my 14105 ‘’Closing Stop’’ unchanged while raising my T/P level on this position to 13820. Given how overbought the NDX is trading I still do not want to be long the market at this time.
The Bund continues to trade heavy. Yesterday’s move lower has me long at 133.10. I will add to this position at 132.30 with a now lower 131.75 ‘’Closing Stop’’ unchanged. I will now lower my T/P level to 133.75.
Gold Rolling Contract
Gold got hit hard again yesterday. This move lower has me long at 1944. I will add to this position at 1929 while leaving my 1919 ‘’Closing Stop’’ unchanged. I will also lower my T/P level to 1955. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
Just before the New York close, Silver hit my second buy level at 22.70 for a now 23.05 average long position. I still have no stop on this position while lowering my T/P level to 23.80. If any of the above levels are hit, I will be back with a new update for my Platinum Members.