Intraday Market Thoughts Archives

We often talk about commodity currencies and low-yielding currencies but the technology currency is rarely touted. In mid US session, AUD and CHF are the only gaining currencies vs USD, while JPY and EUR are the weakest. US new home sales shot up 14% in Sep, while DAX and Nasdaq lead indices. The 2nd Premium DAX long hit its final target for a total of +500 pts from the earlier trade. 

The handful of megacap technology equities are in a class of their own. The 12% rise in Tesla on Monday was one of the single largest market cap gains in any stock, ever. It's now larger than all other car companies combined. Apple, Facebook, Microsoft, Google and Amazon are in a similar class.

What they all have in common is that they're American and act like magnets for capital, particularly when they began to run. We've talked about it before but an underrated factor driving US dollar gains is financial flows into equities and derivatives. The stock market casino operates primarily in US dollars.

The Nasdaq is now less than 2% away from breaking the August record highs and we're nearing the positive Nov-Dec seasonal period. It's tough for the dollar to make gains against commodity currencies and EM in a growth-positive environment but it can continues to make gains against the euro and yen.

The rally in tech also points to the steadily improving mood. That's something that both reflects and will feedback into the real economy. Look for improving US consumer confidence on Tuesday.

أهم الحقائق المتعلقة بتقليص مشتريات السندات -- ندوة الكترونيّة مجانيّة سيقدمها لنا أشرف العايدي 

غدآ الثلاثاء يوم 26 أكتوبر، الساعة 9 مساءً بتوقيت مكة المكرمة. سجلوا حضوركم الآن ولا تفوّتوا فرصة التعلّم من الخبراء  

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أهم الحقائق المتعلقة بتقليص مشتريات السندات -- ندوة الكترونيّة مجانيّة سيقدمها لنا أشرف العايدي 

غدآ الثلاثاء يوم 26 أكتوبر، الساعة 9 مساءً بتوقيت مكة المكرمة. سجلوا حضوركم الآن ولا تفوّتوا فرصة التعلّم من الخبراء

Chinese health officials delivered some bad news on the weekend, nothing that more than 100 covid cases have been confirmed in the past week across 11 provinces. The market took the news in stride early, but it's worth watching if cases begin to spread. On Friday, Powell reaffirmed the need to taper this year, prompting gold to lose half of the $30 rally generated earlier that daym before stabilizing above $1800. USD is up against most currencies as of Sunday's open, with the exception of against AUD and CAD. Minutes ago, US crude oil just hit $85 for the 1st time in 7 years, which is another reason why Ashraf reaffirms the point made in 7:20 mins of this video.  Ashraf added a stock in the chart below, with a high positive correlation with Bitcoin. Care to guess/add it to your holdings?

As bad as supply chain bottlenecks are, they could be much worse if covid had hit China as hard as the rest of the world. Or maybe it's only a matter of time because while China is making vaccine progress, it's jab is less effective than MRNA technology so they may eventually need to let it run.

While we're optimistic on covid receding further, the recent lockdown in Russia and rising cases in the UK, along with this news bear watching.

Otherwise, markets are consumed with rates and inflation talk. Powell on Friday struck a different tone in nothing the high prices will likely last well into next year. He also emphasized that they need to consider a full range of plausible outcomes.

While he still argued for patience, the confident 'transitory' talk from Jackson Hole is long gone. The Fed doves are seeing the pressure on jobs and supply chains and increasingly worrisome that higher prices will become embedded. Interestingly though, as the dollar rallied on this and short-dated rates pushed up, long dated rates pulled in, suggesting the risk of tightening prematurely and tee-ing up another decade of sub-2% inflation.

Economic data will be more lively in the week ahead with the US week starting with the Chicago Fed index, Richmond Fed and new home sales.