Marc Nemenoff gives his readers an insight into the decision making process of a professional trader and analyst with 35+ years of market experience. He covers the markets with which he has had the best success throughout his career with. Contact Mr. Nemenoff at (312) 264-4310
Financials: Sept. Bonds are currently 1 tick lower at 145’08, 10 Yr. Notes 0.5 higher at 120’13 and 5 Yr. Notes unchanged at 113’24.2. These markets have rallied since last week as traders turned from “risk on” to “risk off” mode in the face of rising international tensions and uncertainty related to the possibility of a trade war. The rhetoric has amped up regarding tariffs from the U.S., China and Europe. Initial response over the last week has been a selloff in Equities with Chinese market indices entering BEAR territory breaking back to 2016 lows. Another result of the proposed tariff implementations has been a flattening of the yield curve with the spread between the 10 and 30 Yr. narrowing to 12.5 basis points. You might ask, what about the Fed raising rates? Indeed the Fed did raise rates 25 basis points and this has shown up in the rates of Fed Funds, overnight funds and t-bills and Eurodollars, all short-term rates. The longer the maturity the less effect FOMC actions have on rates. Market perception on risk is more of a motivating force. That being said I feel that over the long-term rates are going higher, therefore I remain long out of the money puts in the 10 Yr. I am also willing to return to the futures market and will be a seller of either the Bonds, 10 Yr. or 5 Yr. Notes should the Bonds rally to the 147’00 level.
Grains: Sept. Corn is currently 1’0 lower at 360’6, Beans 0’6 lower at 872’2 and Wheat unchanged at 488’4, moderately lower since last week. I am currently on the sidelines awaiting Friday’s Crop and Stocks Report.
Cattle:Both Live and Feeder Cattle are 4.00+ lower over the past week. Cash mkts. Are lower as Beef demand has been brisk for the upcoming July 4th holiday. Expectations are that demand will fall off as Live Cattle marketing’s start to increase. I remain negative and expect Aug. LC futures to dip below 100.00. I am currently on the sidelines as the market did not rally to my recommended sell level of 108.00 basis Aug. I am a seller on rallies.
Silver: Sept. Silver is currently 11 cents lower at 16.115. I remain long a small position.
S&P’s: Sept. S&P’s are currently 8.00 lower at 2697.00 trending lower since last week as the market reacts to the possibility of a trade war (see Financials comment). I will be willing to try the long side of the market should the 200 day moving be tested (currently at 2651.00. Resistance is currently 2737.00.
Currencies: As of this writing the Sept. Euro is 33 higher at 1.16610, the Yen 8.5 higher at 0.91335, the Pound 58 lower at 1.3117 and the Dollar Index 14.4 lower at 94.825. Being conflicted about direction as near term technicals are friendly to the Dollar and long-term technicals still negative the Dollar I choose the sidelines.