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June 22, 2019 | Trading Desk Notes June 21, 2019

The irresistible force that moved all markets the past couple of months has been the increasingly aggressive repricing of future interest rate expectations. With the market now pricing a 90% chance of 75 bps of cuts from the Fed over the next 6 months…with a good chance of 50bps in July alone…I believe the exponential […]

June 15, 2019 | Trading Desk Notes June 15, 2019

The US Dollar surged higher this week…after “backing off” the last 3 weeks. All of the major Eurozone currencies plus CAD, AUD and NZD tumbled with AUD and NZD now near multi-year lows. The GBP was especially hard hit as it looks like Boris (hard exit) Johnson will become the new PM. It was interesting […]

June 8, 2019 | Trading Desk Notes – June 8th

US interest rates have dropped like a stone since last November…with the rate of decline dramatically accelerating the last 4 weeks. The bond market has rallied hard as investors have done a HUGE “180” in terms of their interest rate expectations…have increasingly anticipated an economic slowdown…rate cuts from the Fed…and as capital has sought “safety” […]

June 1, 2019 | Trading Desk Notes – June 1st

Stocks, crude and bond yields fell in May…the USD inched higher. The S+P 500 hit a 2 ½ month low this week…down ~7% from All Time Highs reached May 1st…giving back ~1/3rd of the rally from the December lows…but still up ~10% YTD.  Bullish sentiment was near 90% (greed) at the May highs and is […]

May 25, 2019 | Trading Desk Notes – May 25th

Global financial markets were driven more by fear than by greed this week…but there was no real panic…well maybe a little in the energy markets…with WTI tumbling ~13% in 3 days…but the S+P 500 Index is only down ~5% from its May 1st ATH and is still up ~20% from its December lows. Equity trading volumes […]

May 18, 2019 | Trading Desk Notes – May 18th

The US Dollar Index closed higher every day this week…the Chinese RMB and the Korean Won continued to tumble…the British Pound closed lower for 10 consecutive days…falling ~4% on endless Brexit uncertainty.   The DJIA futures contract tumbled to a 3 month low on Monday…trade wars and Iranian tensions…but bounced back the rest of the […]

May 11, 2019 | Trading Desk Notes – May 11th

The S+P 500 stock index fell hard this week…after closing at all-time highs last week…as sentiment about progress on the China/USA trade talks swung from coming-along-ok to total-breakdown. The market was ripe for a hit given bullish sentiment on the major stock indices had at been at extreme levels the past couple of weeks…and immediately […]

April 27, 2019 | Trading Desk Notes – April 27th

The US Dollar surged higher against virtually all other currencies this week with the US Dollar Index (USDX) hitting its best level since May 2017. Last week I wrote that the USDX was setting up to surge through the upper boundary (around 98) of a bullish rising wedge pattern and could make a run at the […]

April 21, 2019 | Trading Desk Notes – April 20th

The US Dollar may be setting up to surge sharply higher.  The US Dollar Index (USDX) has been trending higher for the past year…a breakout above the recent highs around the 98 level could set up a challenge of the 14 year highs around 103 made over 2 years ago. The Swiss Franc closed at a […]

April 14, 2019 | Trading Desk Notes – April 13th

Is it the middle of April or the middle of August? The weekly trading volume of shares on the US indices and the number of futures contracts that traded this week was the lowest since last summer and among the lowest weekly levels of the past several years. This low volume has reduced price volatility with […]

April 6, 2019 | Trading Desk Notes – April 6th

“Politics” is increasingly on a collision course with Central Banks…and  that may be become the “new” most important driver of world markets. On July 7/18 I wrote:  Politics has replaced Central Banks as the most important driver of world markets according to Christopher Wood, financial analyst with CLSA, and I agree. It seems that for […]

March 30, 2019 | Trading Desk Notes – March 30th

The 4 month trend to lower interest rates accelerated last week and again this week…super-charged by a more-dovish-than-expected Fed with markets now pricing in a good chance that the Fed will CUT interest rates this year. There is now ~US$ 11 Trillion worth of Sovereign debt around the world trading at a negative yield.   The […]

March 23, 2019 | Trading Desk Notes – March 23rd

As Good As It Gets? The Fed was even-more-dovish-than-expected Wednesday…signaling that they would not raise interest rates again this year and that they would slow their balance sheet runoff in May…then stop it in September. Stocks, bonds and gold jumped on the news while the US Dollar tumbled. But then things began to change and volatility ramped […]

March 16, 2019 | Trading Desk Notes – March 16th

The key global bellwether for market risk sentiment the past few months has been the S+P 500 stock index and it has rallied ~20% from its December 2018 lows as Central Banks around the world signal a dramatic policy shift in response to the global economic slowdown. The S+P 500 is on track for its best Q1 performance […]

March 8, 2019 | Trading Desk Notes – March 8th

The DJIA fell ~1,000 points from last week’s high to this week’s low as sentiment turned “risk off” after a 10 week rally took the DJIA up ~4,500 points from its Christmas lows. My thinking has been that the slowing global economy would sooner or later cause the stock market rally to falter…even though the rally […]

February 23, 2019 | Trading Desk Notes – February 23rd

David Rosenberg said it all in one sentence this morning: “The (economic) data flow globally continues to weaken but the markets don’t really seem to care much, knowing that central banks have their backs.” I’ve been thinking that markets would start to care…that the increasing tide of weak economic data points would slow down / reverse […]

February 9, 2019 | Trading Desk Notes – Feb 9th

Slowing Global Growth concerns have been hitting some markets more than others…German bond yields, for instance, have been falling steadily since early October…they are now nearing their historic lows made in the Brexit summer of 2016…while US equity markets, crude oil, copper and the commodity currencies have rallied from their oversold Christmas lows on the “Fed […]

January 26, 2019 | Trading Desk Notes – January 26th

The major global stock indices closed on their highs last week…but sentiment soured over the long weekend on a deluge of “economic-growth-is-slowing-everywhere” stories that took the markets down Tuesday and Wednesday with the defining moment the mid-week WSJ headline, “China Risks A Very Hard Landing.”  Markets steadied Thursday (indications of more stimulus in China and maybe even […]

January 19, 2019 | Trading Desk Notes – January 19th

The major American stock market indices have been the best bellwether for “risk on” market sentiment…since the extreme Christmas lows the DJIA has closed higher 15 of 17 trading days…closed higher for 4 consecutive weeks…rallied >3,000 points…and has recovered ~60% of the plunge from the October All Time Highs to the Christmas lows.   The […]

January 5, 2019 | Trading Desk Notes – January 5th

The leading US stock indices fell ~20% from early October All Time Highs to the Christmas lows (Dow down ~5,000 pts) but have bounced back about 8% (Dow up ~1,750 pts) as of yesterday’s close. Daily price action has been wild and choppy with 500+ point swings in the Dow seemingly routine. Implied vol levels on […]

December 29, 2018 | Trading Desk Notes – Dec 29th

The Big Story for 2018 was the “topping out” of the global Central Bank accommodation that had buoyed asset markets around the world for nearly a decade. The Fed took the lead in the swing from easier to tighter monetary policy by raising interest rates and starting to run down their balance sheet. Asset markets took […]

December 15, 2018 | Trading Desk Notes – December 15th

There have been 3 major market events since the beginning of October: 1) stock markets virtually everywhere have been hammered, 2) the US Dollar has been rising against nearly every other currency and, 3) crude oil has tumbled more than 30%. During that pivotal 1st week of October Fed Chair Powell essentially told the market that […]

December 8, 2018 | Trading Desk Notes – December 8th

The major US stock indices opened sharply higher this week (after closing higher every day last week) but within hours of the opening the indices turned tail and fell like a stone…taking out last week’s low by Thursday morning. That high speed tumble (Dow futures down >1,800 points in 4 days) was followed by a scorching […]

December 1, 2018 | Trading Desk Notes – December 1st

Markets are bracing for a possible huge “gap” opening…up or down…Monday morning following the Trump/Xi dinner at the G20 meeting in Buenos Aires Saturday evening. I expect to see a tsunami of political/market analysis Sunday. The major US stock indices have closed higher every day this week…perhaps hoping that Trump and Xi will  “tone down” […]

November 24, 2018 | Trading Desk Notes – November 24th

WTI crude oil tumbled to it’s lowest price in over a year…closing lower for 7 consecutive weeks. On October 3rd WTI hit a 4 year high ~$77 as the market feared a supply shortage especially given the American sanctions on Iran. This week WTI traded below $51…a 33% tumble from the October highs as the market feared a supply […]

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