MARKET REPORT

La Bolsa SE Madrid

Day in Review:

Today:
US Services Sector Unexpectedly Contracts: ISM (Important)
– The ISM Services PMI in the US tumbled to 48.8 in June 2024, the sharpest contraction since April 2020. Markets were expecting 52.5 after 53.8 in May
US Private Employment Disappoints (Important)
– Private businesses added 150K workers to their payrolls in June, the least in five months, and below forecasts of 160K and a downwardly revised 157K in May.

US Initial Jobless Claims Rise More than Expected (Somewhat important)
– Unemployment benefits rose by 4,000 to 238,000 in the last week of June, above market expectations of 235,000, remaining relatively close to the 10-month high of 243,000 from earlier in the month.

US Exports Fall 0.7% MoM in May (Not Important)
– Exports of goods and services fell by $1.8 billion, or 0.7%, from previous month to $261.7B in May 2024, partly reflecting a strong dollar.
US Imports Down 0.3% MoM in May (Not Important)
– Imports fell by $1.2 billion, or 0.3%, from previous month to $336.7B in May 2024.

– US Trade Gap Largest Since October 2022 (Not Important)
                – The trade deficit widened to $75.1B in May, the largest since October 2022 from a revised $74.5B in April and below forecasts of a $76.2B gap.
US Composite PMI Revised Higher (Not Important)
– The S&P Global US Composite PMI for June 2024 was revised upwards to 54.8, showing a positive trend from the initial estimate of 54.6 and an improvement from May’s 54.5. This marks the fastest growth in business activity since April 2022.
US Services Activity Rises to 2-Year High: S&P (Not Important)
The S&P Global US Services PMI rose to 55.3 in June, PRE 54.8, revised higher from the preliminary estimate of 55.1 , firmly above the earlier market expectations of 53.7 to reflect the sharpest expansion in services sector activity since April of 2022

– OVERALL SOFT US DATA (Challenger-Grey job cuts soared, ADP payrolls miss, continuing jobless claims surged, factory orders plunged, ISM Services puked)

– Rate Cut Odds Surge

FOMC:
Officials did not expect it would appropriate to lower borrowing costs until “additional information had emerged to give them greater confidence” that inflation was moving toward their 2% goal
– “vast majority”
of Fed officials assessed that economic growth “appeared to be gradually cooling……and most participants remarked that they viewed the current policy stance as restrictive”
Participants highlighted a variety of factors that were likely to help contribute to continued disinflation in the period ahead. The factors included continued easing of demand–supply pressures in product and labor markets, lagged effects on wages and prices of past monetary policy tightening, the delayed response of measured shelter prices to rental market developments, or the prospect of additional supply-side improvements.
Some officials emphasized the need for patience in allowing high rates to continue to restrain demand……while others noted that if inflation were to remain elevated or increase further, rates “might need to be raised”
A “number” of officials said the Fed needs to stand ready to respond to unexpected weakness, and several flagged that a further drop in demand may push up unemployment rather than just reduce job openings


– DXY hits 3-week LOW, AUD hits 24 week HIGH

– Stocks in Canada hit 4-week HIGHS on strong commodity prices

– Tesla Extends Rally 6.54%
– Paramount +6.9% on Skydance merger
– Meta’s Threads hits over 175m monthly active users, Zuckerberg
– GM to pay $150m in fines due over emissions

– DOLLAR DOWN, GOLD UP, BROAD EQUITIES UNCH, TECH UP, CRYPTO DOWN, CRUDE STEADY, TREASURIES UP (YIELDS DOWN)

PRICES as at 1.30PM US ET
DOLLAR DX down: 104.96            -0.42% (105.22 – 104.72) Off LOWS
– AUD UP: 67.09                                 +0.69% (66.66 – 67.32) Off HIGHS
– EUR down: 92.69                          -0.37% (93.12 – 92.43) Off LOWS
– GBP up: 1.27.40                            +0.45% (126.79 – 127.77) Off HIGHS
– JPY UNCH: 161.53                         UNCH (161.95 – 160.87) MID

GOLD UP: $2366                                              +1.43% (23.. – 2374) HIGHS
DOW/ES/ND down/up/UP:                          39638 -0.13%, 5591 +0.4%, 20419 +0.81%
CRYPTO: BTC/ETH down:                              60346 -2.48%, 3307 -3.08%
CRUDE up: $83.11                                           +0.36% (83.45 – 82.48) Off Highs

Upcoming:

– AUD Bal Trade, Exports/Imports
THURS AUD: Retail Sales MoM Final
FRI EZ Retail Sales, CAD unemployment, US NON FARM PAYROLLS!

Speakers:
EARNINGS:

MAJORS:

DX:
Dollar was Dumped on the Dovish bad news

DOLLAR DX down: 104.96            -0.42% (105.22 – 104.72) Off LOWS

EUR:

EUR down: 92.69                             -0.37% (93.12 – 92.43) Off LOWS

GBP
UK ELECTION THURSDAY

GBP up: 1.27.40                +0.45% (126.79 – 127.77) Off HIGHS

AUD:

AUD UP: 67.09                                  +0.69% (66.66 – 67.32) Off HIGHS

YEN:

JPY UNCH: 161.53                           UNCH (161.95 – 160.87) MID

US TREASURIES
The yield on the US 10-year Treasury note fell to 4.4% on Wednesday, easing from a three-week high of 4.46% touched two sessions prior as new economic data underscored the impact of a moderating economy on the US labor market. The ADP report showed that fewer private sector jobs than expected were added to the economy in June, while continuing unemployment claims rose for a ninth straight week to their highest since 2021. The data added to the view that the labor market was due to giving in to higher interest rates following a prolonged period of resilience, even though the JOLTS job openings and Challenger job cuts were better than expected. The market continued to show a loose consensus that the Fed will deliver its first of two 25bps rate cuts this week in September. Still, Treasuries with longer durations remained under some pressure by the skew toward Donald Trump’s favor in the incoming Presidential election following last week’s debate due to his expansionary fiscal pledges.

GOLD/SILVER
Gold surged to strong RES

GOLD UP: $2366                                              +1.43% (23.. – 2374) HIGHS

EQUITIES:
NVIDIA (+4.57%) Short squeeze

Tesla (6.54%) Extends Rally
Paramount (+6.9%) on Skydance merger
Meta’s (+0.09%) Threads hits over 175m monthly active users, Zuckerberg
GM (-0.51%) to pay $150m in fines due over emissions

OIL:
Oil prices spiked on the big crude draw (just like last night’s API) but reversed fast to end modestly lower

CRUDE up: $83.11                                           +0.36% (83.45 – 82.48) Off Highs

BOND YIELDS:

US 1-MO 5.354 -0.014
US 6-MO 5.302 -0.008
US 1-YR 5.048 -0.038
US 5-YR 4.324 -0.07
US 10-YR 4.36 -0.075
US 30-YR 4.529 -0.079

2YR/10YR -0.35

CRYPTO
Crypto on the sidelines treading water around the $60k mark lacking firm direction either way with Gold, the Dollar and Treasuries the focus of todays action

CRYPTO: BTC/ETH down:                              60346 -2.48%, 3307 -3.08%

KEEP DOING WHATS WORKING
STOP WHAT ISNT.

Best of luck out there. Let the market come to you

Joke of the Day:

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