Despite Nvidia (NVDA), a leading chipmaker, briefly surpassed the $1 trillion market valuation mark on Wednesday, the NDX led yesterday’s across the board declines, closing lower by 0.70%. Nvidia has emerged as a frontrunner in the AI industry, exemplifying Wall Street’s current preoccupation with AI. The company has become the largest producer of specialised chips necessary to power the next generation of AI products. Goldman Sachs (GS), a prominent investment bank, is reportedly considering implementing another round of job cuts due to a subdued dealmaking environment that has impacted revenues across Wall Street. According to individuals familiar with the matter, the bank is in the early stages of planning its third round of job cuts within a year. In September, the firm eliminated several hundred positions, followed by a significant round of retrenchments in January, resulting in approximately 3,200 job losses. U.S. Consumer Confidence dropped to a six-month low as sentiment regarding the current state of the labour market and business conditions deteriorated. The Conference Board’s index decreased to 102.3 in May, down from a revised 103.7 in the previous month. Notably, the proportion of consumers expressing that jobs were “plentiful” reached its lowest point in over two years. Federal Reserve Bank of Richmond President Thomas Barkin said that he would be further convinced that inflation is easing by more prevalent signals of weakening demand. During a virtual event organised by the National Association for Business Economics, Barkin acknowledged that although price growth has slowed to some extent, he remains of the opinion that inflation is still too high. A new analysis conducted by the Federal Reserve Bank of San Francisco suggests that rapid wage growth has not played a significant role in driving inflation. According to economist Adam Shapiro from the San Francisco Fed, the recent increase in the Employment Cost Index can only account for around 0.1 percentage point of the three percentage-point rise in consumer price inflation, excluding food and energy. Shapiro points out that wage increases may be a response to inflationary pressures rather than a primary driver of inflation itself. The analysis challenges the notion that rapid wage growth is a leading cause of inflation, suggesting a more complex relationship between wages and price increases. European Markets closed lower. In a recent report released by the European Commission, consumers’ price expectations have fallen to the lowest since 2020. The report also highlighted a decline in expectations for businesses’ pricing abilities over the next three months with various sectors including construction and retail showing sustained price drops. Overall, the report reflects a challenging economic situation in the Euro-Zone, with decreasing price expectations and a decline in overall confidence which should provide a more favourable environment for the central bank to end rate hikes. Francois Villeroy de Galhau, the Governor of the French central bank, has stated that the rate of consumer-price increases in France has likely surpassed its peak. He further stated that inflation is expected to decline in France from now until the end of the year, although the decrease might not be sufficient to alleviate all concerns. In Asia, Bank of America (BAC) predicts that Japanese stocks will reach their all-time high, similar to the levels seen during the Bubble Economy of 1989, potentially by the first half of 2025. This projection is based on the expectation of an inflationary regime and recent valuation reforms in the Tokyo Stock Exchange. Factors contributing to this optimism include strong interest from foreign investors, solid corporate earnings, and the support of a weak Yen. These factors collectively contribute to the positive trajectory of the Topix Index, the broad benchmark for Japanese stocks. Elsewhere, Oil closed 1.97% lower while Gold rose 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 348 points yesterday to close May 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 0.60% lower at a price of 4180.
The Dow Jones Industrial Average closed 134 points lower for a 0.41% loss at a price of 32,908.
The NASDAQ 100 closed 0.70% lower at a price of 14.254.
The Stoxx Europe 600 Index closed 1.07% lower.
Yesterday, the MSCI Asia Pacific closed 0.50% lower.
Yesterday, the Nikkei closed 1.41% lower at a price of 30,887.
Currencies
The Bloomberg Dollar Spot Index closed 0.20% higher.
The Euro closed 0.4% lower at $1.0685.
The British Pound closed 0.3% higher at 1.2443.
The Japanese Yen rose 0.4% closing at $139.29.
Bonds
Germany’s 10-year yield closed 5 basis points lower at 2.28%.
Britain’s 10-year yield closed 4 basis points lower at 4.18%.
U.S.10 Year Treasury closed 6 basis points lower at 3.65%.
Commodities
West Texas Intermediate crude closed 1.97% lower at $68.09 a barrel.
Gold closed 0.50% higher at $1963.10 an ounce.
This morning on the Economic Front we have German Retail Sales at 7.00 am. This is followed by German, Euro-Zone and U.K. Manufacturing PMI at 8.55 am, 9.00 am and 9.30 am respectively. At 10.00 am we have Euro-Zone Unemployment Rate and CPI, followed at 12.30 pm by the latest ECB Minutes. Next, we have U.S. ADP Employment Change at 1.15 pm and the Weekly Jobless Claims at 1.30 pm. At 2.45 pm we have Manufacturing PMI. Finally, we have ISM Manufacturing and Construction Output at 3.00 pm.
Cash S&P 500
Month end finished with a whimper despite Fed speakers coming out yesterday seemingly intent to take a rate-cut off the table. While it led to an afternoon rally the fact is the S&P closed below the February highs and also below the May 1 highs. As I have mentioned constantly over the past few weeks I have never seen such a diverse market. One technical indicator that has worked so well over the past few years is the $NYSI. When this indicator is max oversold it is a buy any and a sell when max overbought. For the past two weeks this signal has been maximum oversold yet the NDX is severely overbought making trading the S&P difficult as it is caught by the insane rally in the NDX and the underlying weakness of the Bank stocks and Dow. The $BPSPX is also max oversold meaning I cannot be a seller of the S&P yet with the 14-Day RSI for the NDX at 73 I cannot be a buyer of tech. Hopefully this diversion will sort it self out in June. My S&P plan worked well yesterday as the market traded lower to my 4175 buy level before rallying to my 4185.50 T/P level and I am now flat. Today, I will again be a buyer on any dip lower to 4152/4167 with a 4139 ‘’Closing Stop’’. I do not want to be short the S&P at this time.
EUR/USD
No Change. I am still long at an average rate of 1.0735 with the same 1.0785 T/P level. I will leave my 1. 1.0635 ‘’Closing Stop’’ unchanged. If any of the above levels are hit I will be back with a new update for my Platinum Members.
June Dollar Index
The Dollar rallied to my second sell level at 104.65 for a now 104.35 average short position. I will leave my 105.05 ‘’Closing Stop’’ unchanged while raising my T/P level to 103.90. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Cash DAX
The DAX got hit hard yesterday, trading 200 points lower from where I marked prices 24 hours ago. I will now lower my sell level to 15900/16000 with a lower 16165 ‘’Closing Stop’’. I still do not want to be long the DAX at this time.
Cash FTSE
The FTSE sold off to my second buy level at 7450 for a now 7490 average long position. I will leave my 7395 ‘’Closing Stop’’ unchanged. I will now lower my T/P level to 7530. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Dow Rolling Contract
My Dow plan worked well as the market traded lower to my 32850-buy level before rallying to my revised 32973 T/P level as emailed to my Platinum Members and I am now flat. Given how oversold the Dow is trading I will continue to be a buyer of dips. The Dow has short-term support from 32500/32750 where I will be an aggressive buyer with a 32395 ‘’Closing Stop’’.
Cash NASDAQ 100
The NDX finally sold off to my 14280 T/P level on my latest 14400 short position. The NDX made an afternoon low at 14218 before rallying 100 points, then falling 50 points into the Chicago close. The 14-Day RSI is still severely overbought closing at 73 last night. Today, I will again be a seller from 14400/14550 with the same 14705 ‘’Closing Stop’’. If I am taken short I will have a T/P level at 14310.
June BUND
Unfortunately, the Bund never came close to yesterday’s buy range before ending Tuesday with a further 80-point gain. I will now raise my buy level to 134.60/135.40 with a higher 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
No Change. I am still long at an average rate of 23.05 with no stop. I will leave my 23.70 T/P level unchanged for now. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
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