Hey Folks, I am back from a long holiday weekend and I’m greeted with all types of market issues. So let’s get into it, shall we?
Weekly Sound Bites;
• Opposites really do attract in this current market environment…Just this past week we’ve seen record high prices in Equity Indexes as well as Corporate Bonds, US Gov Treasuries, the US Dollar and in Gold while long term interest rates set new records with the 30 Year US Bond seeing all-time lows…with fears of the Corona Virus spreading we see risk off assets like Gold and Bonds soar higher; –yet with an additional amount of large stimulus brought forward by China, Japan and the back drop of a very supportive US FED supports continued moves higher in US equity markets…and the US Dollar has become a very safe haven as we’ve seen both the Euro and the Yen move much lower…remember, both these currencies makes up about 70% of the value of the US Dollar Index so when these two currencies weaken, the US Dollar has nowhere to go but up…
• Investors in risky on and off sectors both are assuming that global monetary central banks will supply the liquidity needed to keep the tide from going out to sea…therefore easy money makes it more plausible for both counter intuitive asset classes to move higher in the near term…
• Currently the markets are at crossroads as it relates to the Corona Virus…China has said the Virus has thus far killed about 2,000 with over 70,000 cases reported but they also followed up that the new cases reported are slowing…the big issues confronting global markets is that China has changed the way they count new cases three times and markets are getting more skeptical about the openness and truthfulness of the Chinese Government…If factories remained shut down for another three weeks that will seriously jeopardize the global markets and supply chains that would effect companies in all major markets…However, if the Virus is contained shortly and is more limited then we can see the global equity markets rebound as we move forward…And thus far most markets are betting on a “V” shaped recovery where markets receive a sharp blow up front and then a sharp rise after the Virus has been contained…but either way, central banks are committed to maintaining market liquidity…
Weekly Round Up;
Don’t Be A Rat Brain Trader – Be the Red Stripe Zebra !!
Trade Smart !
hpb
