U.S. Equity Markets fell sharply as bond yields rose, before recovering some of these losses into the close. The NASDAQ led the decline, closing lower by 1.88%. Inflation fears and rising yields spooked markets. Remember, these factors disproportionately hurt technology companies since higher yields mean it costs more for them to raise debt to fuel growth. And since tech names now make up a huge part of the overall market, this weighed on overall markets. Treasury Secretary Janet Yellen did little to ease these concerns. She said that Interest Rates may have to rise in order to stop the U.S. economy from overheating. This comment sparked fears of the Federal Reserve having to step in and raise rates to help the economy cool off. Dallas Federal Reserve President Robert Kaplan fuelled these concerns by saying recently that the Fed should start to discuss tapering its asset purchases. The “reopening trade” also weighed on tech, and therefore markets. New York, New Jersey, and Connecticut all announced plans to roll back COVID-19 restrictions. This dragged tech lower as investors rotated into reopening plays like the Dow Jones. European Markets got hit hard, led by the DAX which closed lower by 2.5%. European Commission President Ursula von der Leyen and Indian Prime Minister Narendra Modi discussed reengaging in comprehensive trade talks to counter China’s rise. Germany’s Chamber of Industry and Commerce raised its export growth outlook from 6% to 8% on strength in the U.S. and Chinese demand. And there were reports that the country was considering easing restrictions for vaccinated individuals. European Central Bank Governing Council member François Villeroy de Galhau said risks of a bankruptcy wave are overexaggerated. He added that an increase in bankruptcies would be part of a return to normal conditions. In Asia, Stock markets in China and Japan remained closed for holidays. The White House was said to consider changing rules put in place by the previous administration barring securities transactions in Chinese government-affiliated companies. South Korea’s Consumer Price Index data for April were stronger than expected, rising versus March, indicating economic activity continues to heat up. Australia’s export data for March were weaker than expected, falling versus February, as overseas demand for natural gas hit a nine-month high and iron-ore shipments set a new record. Elsewhere, Oil rose 1.85% as OPEC kept crude production stable in April, before the planned increases in the coming months, while Bitcoin fell 6%.
To mark my 2300th 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 firstname.lastname@example.org for details
For anyone following my Platinum Service it made 131 points yesterday and is now ahead by 194 points for May having closed April with a gain of 1244 points, having ended March with an impressive gain of 3769 points, having made 3286 points in February, 2077 points in January, 2273 points in December, 2025 points in November, 2779 points in October, 3042 points in September and 2383 points in August. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 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 0.67% lower at a price of 4164.
The Dow Jones Industrial Average closed 19 points higher for a 0.13% gain at a price of 34,133.
The NASDAQ 100 closed 1.85% lower at a price of 13,545.
The Stoxx Europe 600 Index closed 1.1% lower.
Yesterday, the MSCI Asia Pacific Index rose 0.1%.
Yesterday, the Nikkei was closed having finished Friday at a price of 29,053.
The Bloomberg Dollar Spot Index closed 0.4% higher
The Euro closed 0.4% lower at $1.2019.
The British Pound closed 0.2% lower at $1.3883.
The Japanese Yen closed 0.3% lower at 109.33 per dollar.
Germany’s 10-year yield closed four basis points lower at -0.24%.
Britain’s 10-year yield closed four basis points lower at 0.80%.
US 10 Year Treasury closed one basis points lower at 1.59%.
West Texas Intermediate crude closed 1.85% higher at $66.73 a barrel.
Gold closed 0.82% lower at $1,776.10 an ounce.
This morning on the Economic Front we have German, Euro-Zone and UK Markit Services PMI at 8.55 am, 9.00 am and 9.30 am respectively. Also, at 9.00 am we have Euro-Zone PPI. This is followed at 12.00 pm by U.S MBA Mortgage Applications, ADP Employment Change at 1.15 pm and at 2.45 pm by Markit Services PMI. Finally, we have ISM Services PMI at 3.00 pm and a speech from Fed Member Rosengren at 4.00 pm.
June S&P 500
Thankfully I had a ‘’Closing Stop’’ on yesterday’s S&P call as after the market traded the whole of my buy range for a 4153 average long position we rallied into the close to my 4160 revised T/P level – 40 Handles above the afternoon low and I am still flat. Given the trust of the rally I am guessing that we saw some intervention yesterday as the Fed cannot afford for the market to fail given that fact that they are still pumping $120 bn into the market every month. The S&P has strong support at yesterday’s low and I will now be an aggressive buyer from 4128/4143 with a 4017 ‘’Closing Stop’’. I will now lower my sell level to 4188/4203 with a lower 4215 ‘’Closing Stop’’.
The Euro traded lower to my 1.2020 buy level. I will add to this trade at 1.1970 while leaving my 1.1935 stop unchanged. I will now lower my T/P level to 1.2040 and if any of the above levels are hit I will be back with a new update for my Platinum Members.
June Dollar Index
I am still flat and I will now raise my buy level to 90.95/90.95 with a higher 90.51 stop.
My DAX plan did not work well as after the market traded the whole of my buy range for a 15020 average long position I was stopped out of this trade at 14925 and I am still flat. The break and close below 14900 is bearish. I will now be a small seller from 15030/15100 with a 15155 tight stop.
The FTSE finally traded lower to my 6885 buy level before a late rally saw my revised 6910 T/P level triggered and I am still flat. The FTSE has support from 6800/6850 where I will again be a buyer with a 6765 tight stop. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
Until the Dow breaks and closes below 33700 then all dips are to be bought. Yesterday I bought the Dow at 33840 before the market rallied to my 33971 revised T/P level and I am now flat. Today I will again be a buyer on any dip lower to 33770/33940 with a wider 33595 ‘’Closing Stop’’. I still do not want to be short the Dow at this time.
The NASDAQ got hit hard yesterday, falling over 3% before a late rally cut its loss on the day to a still hefty 1.85%. This move lower has me long at an average rate of 13640. The market closed above my 13525 ‘’Closing Stop’’ and I will leave this stop unchanged today. Interestingly, the NASDAQ has now bounced almost 200 points off its 50 Day Moving Average (13350) as I go to press. I will now lower my T/P level to 13650 and if any of the above levels are hit I will come back with a new update for my Platinum Members.
I am still flat as the Bund rallied following the equity market sell-off. I will now raise my buy level to 169.55/170.05 with a higher 169.18 stop.
Gold Rolling Contract
Gold just missed my buy level before rallying into the New York close and I am still flat. I will now lower my buy level to 1737/1752 with a lower 1729 tight stop.
Silver Rolling Contract
No Change. I am still a buyer from 25.20/25.80 with the same 24.85 stop. If I am taken long I will have a T/P level at 26.10.