U.S. stocks fell Wednesday as trade tensions simmered, with the White House said to be preparing to blacklist more Chinese technology companies. The US Dollar and Treasuries held their ground after the release of meeting minutes from the Federal Reserve, which stressed a patient approach to interest-rate changes. The S&P 500 Index fell for the third session in four, with tech shares under pressure amid the latest developments in the trade war with China. Markets continue to run hot and cold as investors react to the near-daily salvos in the conflict, trying to size up how much damage they will bring to growth and supply chains. The Fed minutes put a damper on prospects for lower rates this year, weighing slightly on equity markets as Fed Funds Futures showed a slight drop in the odds for a rate cut. Just before the close it was announced that a Federal Judge in New York rejected President Donald Trump’s request to keep his banks from producing financial records to lawmakers. U.S. District Judge Edgardo Ramos, ruling from the bench yesterday, said that while the president, his family and his business would suffer irreparable harm from disclosure of the records, they were “unlikely to succeed on the merits” with their argument that the congressional subpoenas are improper. Ramos, reading his 25-page opinion in a New York courtroom, said he wouldn’t grant Trump’s request for a preliminary injunction.
To mark my 1825th 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@tradernoblecom for details
For anyone following my Platinum Service it was flat yesterday and is still ahead by 1566 points for May, having made 955 points in April, 1027 points in March, 1013 points in February, 1671 points in January, 2803 points in December, 1541 points in November and 2094 points in October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points
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The S&P 500 Index closed 0.3% lower yesterday with the Futures Market down a further 0.5% this morning after news overnight from a Chinese Official who said the Trade war could last until at least 2035. The Stoxx Europe 600 Index dipped 0.1% and is opening a further 0.5% lower this morning. Given the wild fluctuations in the Pound yesterday the U.K.’s FTSE 100 Index rose 0.1%, while the MSCI Emerging Market Index fell 0.1%.
Theresa May is under pressure to ditch her Brexit deal and quit as Prime Minister. One Minister has resigned, and others are plotting. But May continues to fight on, saying it’s her duty to put her Brexit deal to another vote. Pro-Brexit ministers have been meeting in private to plot their response to May’s plan. Three ministers have asked to meet May to discuss their concerns; at least one minister hasn’t been granted a hearing. As a result the Pound fell for a record 13th day as investors brace for a hardliner to succeed May, closing 0.3% lower at $1.2660. Meanwhile the sideways price action continued in the Euro which closed unchanged at $1.1153.
Federal Reserve officials judged at their latest meeting that their patient approach to interest-rate change would be appropriate “for some time,” and many sided with Chairman Jerome Powell’s view that the recent dip in inflation was probably temporary. “Members observed that a patient approach to determining future adjustments to the target range for the Federal Funds Rate would likely remain appropriate for some time,” according to minutes of the Federal Open Market Committee’s April 30-May 1 meeting released Wednesday in Washington. Treasuries held gains, as the minutes reinforced the message from Powell’s post-meeting press conference, at which he said the level of interest rates was appropriate for now and there wasn’t a strong case to move in either direction. As a result the yield on 10-year Treasuries fell four basis points to 2.39%. In Europe Germany’s 10-year yield declined two basis points to -0.09%. Meanwhile the UK Gilt sank seven basis points to 1.015%, the biggest drop in two months.
The oil market got hit hard yesterday with West Texas Intermediate crude closing 2.9% lower at $61.28 a barrel. Despite the stronger US Dollar Gold gained 0.1% to $1,273.88 an ounce.
This morning on the Economic Front we already had the release of German Final GDP which came in as expected with a 0.4% rise. At 8.30 am we have German Manufacturing/Services PMI and this is followed at 9.00 am by the German IFO Survey. The Euro-Zone will release its latest Manufacturing/Services PMI at 9.00 am. Next we have US Weekly Jobless Claims at 1.30 pm and Manufacturing PMI at 2.45 pm. Finally at 3.00 pm we have New Home Sales.
This afternoon we have a clatter of Fed Members speaking with Kaplan, Daly and Bostic speaking at an Economic Conference starting at 5.00 pm.
June S&P 500
Yesterday the S&P traded to a low of 2848.25 just missing my initial 2848 buy level before rallying 15 Handles. Overnight the late sell-off we saw in the S&P continued and this morning I have bought a small piece at the bottom of yesterday’s buy range here at 2838. I will add to this position on any further move lower to 2826 with a tight 2819 stop. I will have a T/P level on this position at 2845 and if any of the above levels are hit I will be back with a new update for my Platinum Members,
I am still flat the Euro and today I will now lower my sell level slightly to 1.1185/1.1225 with a lower 1.1155 stop. My only interest in buying the Euro is still on a further dip lower to 1.1050/1.1090 with a lower 1.1015 stop.
June Dollar Index
No Change as I am still a seller on any rally higher to 98.25/98.65 with a 98.90 stop.
The DAX is opening lower this morning and I am still flat. I will now lower my buy level to 11920/11980 with a 11865 tight stop. Despite the weak price action I still do not want to be short the market at this time, especially with the European Elections on tomorrow.
Frustratingly the FTSE just missed my 7380 sell level before selling off overnight and I am still flat. Today I will lower my sell level to 7325/7365 with a 7402 stop. With Sterling closing lower for a record 13 consecutive trading sessions the market is due a bounce and any strong rally in the Pound will lead to a further fall in the FTSE. As a result I still do not want to be long the FTSE at this time.
Dow Rolling Contract
I am still flat the Dow which is selling off as I go to press. As I am now long the S&P I will lower my Dow buy level to 25370/25520 with a 25260 wider stop. If I am taken long and subsequently stopped out of this position I will be an aggressive buyer in front of 25150 with a 25040 stop.
I am still flat the NASDAQ and today I will lower my buy level to 7250/7310 with a 7205 stop. With the US Markets closed on Monday I do not want to be short the NASDAQ at this time.
I am still flat the Bund and given the weakness in the equity markets I will now raise my sell level to 167.30/167.70 with a 168.05 stop.
Gold Rolling Contract
No Change as my only interest in buying Gold is still on a dip lower to 1248/1258 with a 1241 stop.
Silver Rolling Contract
Silver remains heavy with prices tracing out a succession of lower lows and lower highs since February. With sentiment getting more pessimistic we are getting close to a meaningful trading low. However the Daily Sentiment Index reading closed at 23% bulls last night and I would still prefer to see the DSI with a print below 10 to set up a longer term long position. I am still long at 14.80 with the same 14.60 exit level and 14.25 stop. If any of the above levels are hit I will be back with a new update for my Platinum Members.