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October 21, 2023 | Trading Desk Notes For October 21, 2023
Weekly change: Gold up, bond yields up, crude oil up, stocks down, USD down Gold Gold rallied ~$185 from 8-month lows on October 6 to this Friday’s highs, with the front-month contract closing this week above $1980 for the first time since the mid-July Key Turn Date. Following the Russian invasion of Ukraine on February 24, 2022, […]
October 15, 2023 | Trading Desk Notes For October 15, 2023
“This may be the most dangerous time the world has seen in decades.” Jamie Dimon, CEO of JPMorgan Chase, in a statement accompanying the bank’s quarterly earnings news release. This edition of the TD Notes will be brief. After three days in Calgary attending Josef Schachter’s “Catch the Energy” conference, I returned to my desk Sunday […]
October 7, 2023 | Trading Desk Notes For October 7, 2023
Was Friday a turning point? Bond prices collapsed to fresh 16-year lows immediately following Friday morning’s “stronger than expected” NFP report. The US Dollar Index surged higher, while S&P futures tumbled and appeared ready to make new 4-month lows. But ~30 minutes after the NFP report, markets reversed course, and by the end of the day, S&P futures […]
September 30, 2023 | Trading Desk Notes For September 30, 2023
August/September: Bond yields, USD and Crude oil sharply higher, stocks and gold down The yield on the long bond soared from ~3.9% on the mid-July Key Turn Date to ~4.8% (a 16-year high) on Thursday. Bond prices fell as yields rose. The US Dollar Index rallied ~7% from the mid-July KTD, rising for 11 consecutive weeks. This […]
September 23, 2023 | Trading Desk Notes For September 23, 2023
KING Dollar higher for ten consecutive weeks The US Dollar Index registered its highest weekly close in ten months, up ~6% from the mid-July Key Turn Date. The Euro (the Anti-Dollar) has closed lower for ten consecutive weeks, falling ~6% from its mid-July highs. The Yen has dropped ~7% from its mid-July highs and closed this week at 10-month lows […]
September 16, 2023 | Trading Desk Notes For September 15, 2023
KING Dollar rises for NINE consecutive weeks The USDX hit a 15-month low in mid-July but has rallied >5% since then. (I’ve called mid-July a Key Turn Date as several macro markets reversed course then.) The USD looks attractive as the Eurozone and China/Asia are slowing. American “exceptionalism” draws capital. The Euro traded at a 17-month high in mid-July but […]
September 9, 2023 | Trading Desk Notes For September 9, 2023
King Dollar: higher for eight consecutive weeks The US Dollar Index touched a 15-month low in mid-July (a Key Turn Date across several markets) and has rallied for eight consecutive weeks. The Euro reached a 17-month high in mid-July, then fell for eight consecutive weeks. The Yen had a counter-trend rally into mid-July but then made lower lows […]
September 2, 2023 | Trading Desk Notes For September 2, 2023
The Fed is likely done raising rates in 2023 Markets were focused on US employment data during the last week of summer, and after the JOLTS, ADP and BLS reports, the chances of another rate increase from the Fed this year fell to ~30%. Since April, short-term and long-term interest rates have been trending higher in Canada […]
August 26, 2023 | Trading Desk Notes For August 26, 2023
Short-term interest rates surged higher this week Two-year Treasury futures traded to a 23-year low, the 5-year hit a 16-year low, and the 10-year closed the week at a 16-year low, but the long and ultra-long bond futures closed a little higher on the week after hitting multi-year lows on Monday. June 2024 SOFR futures […]
August 19, 2023 | Trading Desk Notes For August 19, 2023
A quick report this week – my Golf Club Championship demands my participation! Interest rates keep rising The 10-year US Treasury yield hit a 16-year high of>4.3% this week. Short rates are at 20+year highs, 10-year reals touched 14-year highs, UK Gilts touched 25-year highs, and Canadian 10-year government bonds hit 13-year highs. A stronger-than-expected US economy, […]
August 12, 2023 | Trading Desk Notes For August 12, 2023
Interest rates keep rising. The 1-year T-Bill yield is at 22-year highs Treasury yields are rising as governments issue more debt to “fund” the difference between income and expenses. People will buy US government debt, but at what price? Governments have discovered that voters like fiscal stimulus (expect it to continue) and don’t care about rising deficits […]
August 5, 2023 | Trading Desk Notes For August 5, 2023
Stock market sentiment took another step away from “irrational exuberance” this week I wrote in the July 22 TDNotes: I’ve been skeptical of the “Magnificient Seven” rally for a few months, thinking that sentiment bordered on “irrational exuberance.” However, I respected the power of the rally and patiently waited for an opportunity to fade it. I thought the “$100 Billion in […]
July 29, 2023 | Trading Desk Notes For July 29, 2023
It was Central Bank Week The FOMC met on Wednesday and raised 25 bps as expected, with markets now pricing a ~30% chance of another 25 bps at their September 19/20 meeting. Financial markets were essentially unchanged on the news. The ECB met on Thursday and raised 25 bps as expected but surprised markets by NOT forecasting […]
July 22, 2023 | Trading Desk Notes For July 22, 2023
A turning point in sizzling tech stocks? On Tuesday, MSFT announced plans to invoice corporations for employees using Microsoft AI. Within an hour; the share price rose >$20 to new All-Time Highs, adding ~$100 Billion (~4%) in market cap. By Friday’s close, those gains had evaporated, leaving the weekly chart with an ominous shooting star candlestick pattern. […]
July 15, 2023 | Trading Desk Notes For July 15, 2023
Weaker-than-expected CPI ignited a risk-on surge across currency, credit and equity markets “A man hears what he wants to hear and disregards the rest.” Paul Simon, The Boxer The US CPI report Wednesday morning was slightly weaker than expected and kicked off a surge of “risk-on” sentiment that accelerated existing short-term trends in currencies and equities: the US […]
July 8, 2023 | Trading Desk Notes For July 8, 2023
Real and nominal interest rates surged higher this week Interest rates across Europe, Canada and the US rose this week, with yields on the long end sharply higher. The yield on the US 10-year T-Note (~4.07%) is at a 15-year high; the 10-year UK bond yield (~4.70%) is also at a 15-year high; the 10-year […]
July 1, 2023 | Trading Desk Notes For July 1, 2023
An Apple a day keeps the bear away AAPL surged to new All-Time Highs on Friday, up ~56% from its January lows. The market cap is now ~$3.05 Trillion. MSFT hit ATH two weeks ago and closed Friday down ~3% from those highs. The MSFT market cap is now ~$2.5 Trillion. Taken together, the market cap […]
June 24, 2023 | Trading Desk Notes For June 24, 2023
Soaring stocks “pause” AAPL closed at new All-Time Highs this week, but many other stocks and the leading indices took a “pause.” Perhaps there was too much talk about “over-bought” or worries that corporate buybacks are going into their quarterly blackout period. Or maybe it was worries about institutional rebalancing next week or mounting “evidence” that […]
June 17, 2023 | Trading Desk Notes For June 17, 2023
Central banks are determined to get inflation down The Fed and the ECB reminded markets again this week that they are determined to slow inflation, echoing recent statements from the BoE, the BoC and the RBA. The “explicit” message is that rates will stay higher for longer. The underlying rationale for current central bank policies is that rising inflation […]
June 10, 2023 | Trading Desk Notes For June 10, 2023
The S&P and the Vanguard Total Stock Market ETF (the VTI) made new highs for the year this week The S&P is up >22% from last October’s low. The VTI is up ~23%. The Nasdaq 100 is up ~40% from October’s lows. The rally in the benchmark indices continues to be driven by big gains in […]
June 3, 2023 | Trading Desk Notes For June 3, 2023
Up, up and away? The Nasdaq 100 futures had their highest weekly close this week since March 2022, up ~32% YTD; the S&P 500 index had its highest weekly close since April 2022, up ~11% YTD, while the DJIA had its highest weekly close since…last month, and is up ~2% YTD (imagine what the DJIA would […]
May 27, 2023 | Trading Desk Notes For May 27, 2023
Nvidia Following a quarterly report described by one analyst as “The greatest beat of all time,” Nvidia’s market cap soared by >$200 Billion on Thursday, the largest one-day value increase of any company in American equity market history. The company’s market cap at the beginning of this year was ~$350B; at Friday’s close, it was ~$960B. The share price at […]
May 20, 2023 | Trading Desk Notes For May 20, 2023
The US Dollar rallied against virtually all currencies over the past two weeks The US Dollar Index hit a 20-year high last September but then trended lower (down ~12%) to support levels ~101. Net speculative positioning was very bullish on the USD leading up to the September 2022 highs. It had turned very bearish at the recent […]
May 13, 2023 | Trading Desk Notes For May 13, 2023
Megacap tech continues to provide nearly all the YTD gains for the broad stock indices While small-cap stocks continue to underperform the broad indices and Megacap tech. Bullish stock factors: the recession has been postponed, and strong labour markets mean buying power for consumers, which means pricing power for corporations. We are at or near peak […]
May 6, 2023 | Trading Desk Notes For May 6, 2023
Wicked bipolar sentiment swings across asset classes this week The DJIA was upbeat early Monday, building on last week’s late rally and hit 12-week highs. But then, more bad news from the banking sector started to spread, and the DJIA closed at the day’s lows. The banking worries intensified as the days passed (KRE fell to two-and-a-half-year […]