AUD Breakout Looms as USD Weakens
Morgan Stanley said this week to forget about USD strength, and doubled down on a bearish call where they see the DXY falling another 10% over the coming year. “The Fed’s reaction function shift suggests a sustained period of the USD bear regime, which means a large but increasingly broad USD sell-off. We expand our […]
Fed Cuts Rates: Powell’s Dovish Exit and Market Reaction
Good morning, Wall Street took the FOMC meeting in stride, with benchmarks relatively little changed during the session, with moderate volatility into the close. The Fed confirmed a rate cut and signalled the start of a monetary policy easing cycle. Newly appointed official to the Fed Board and key White House economic adviser, Governor Stephen […]
Going for Gold
Gold’s Bull Run Accelerates: Why JP Morgan Sees $4,000+ and Beyond JP Morgan said this week in a note to clients that “after a summer of coiling, gold has finally broken higher once again as ETF inflows have been re-ignited by falling yields ahead of impending Fed cuts. Our strategists still believe gold has even higher to […]
FOMC Risk-Off? Why Any Market Shakeout Could Be Short-Lived
Any Market Shakeout Will Likely Be Short & Shallow After the FOMC Any shakeout in the market over the coming weeks is likely to prove short in duration and likely limited to a 5% to 7% drawdown at best. I see the market quickly getting back on its feet post the FOMC meeting – if […]
Chinese Retail Investors Fuel Surge in Hong Kong ETFs
Chinese retail investors stampede into Hong Kong ETFs Bloomberg reports that Chinese investors are piling into onshore-listed ETFs tracking Hong Kong stocks, with inflows surpassing US$26 billion so far this year and momentum building since June. This is likely just the tip of the iceberg, given that Chinese households are sitting on some US$18 trillion […]
Bloomberg Commodity Index Near Breakout as Dollar Weakens
Bloomberg Commodity Index Commodities put in a strong session. The Bloomberg Commodity Index added 0.9% to 104.7 and is testing overhead resistance. One high conviction view we have had for some time is that a weaker dollar will drive the BCOM index higher, and resistance is being tested now at 105 (see below). Oil prices […]
Fed Cuts, “Sell the News” Risks & Dollar Weakness
Opinion on Wall Street is almost unanimous that investors “buy the dip” in the event of any selloff ensuing over the coming weeks. I always get a bit nervous when markets become one-sided, but a lot of liquidity seems to be sidelined and ready for a correction should it emerge. JP Morgan’s trading desk said in […]
US Inflation Rises, Jobs Data Fuels Fed Rate Cut Bets
The US inflation print didn’t rock the boat on Thursday (although there are signs of tariffs filtering through several categories to consumers), and fresh signs of a cooling job market saw equities rally and bond yields fall on Thursday, as investors recalibrated the Federal Reserve’s rate cut path to be more aggressive. The headline consumer price index […]
Come on, Russell! Small-Cap Stocks Face Near-Term Risks but Big Upside in 2025
Come on, Russell! According to Morgan Stanley’s co-chief investment officer, Lisa Shallett, “the summer rally to all-time highs has lifted everything from mega-caps to cheap stocks to meme shares, but now might be time to take some chips off the table.” Small and mid-cap stocks have rallied strongly in recent months, with the Russell 20000 index gaining […]
Oracle Surges +36% on Record Cloud Demand, Larry Ellison Tops Musk
The standout move of the day was clearly Oracle, rallying +36% after unveiling extraordinary cloud demand figures and securing a historic $244 billion surge in market cap. The jump saw Larry Ellison dethrone Musk as the world’s richest person. The catalyst was Oracle’s revelation of $455 billion in remaining performance obligations, or RPO (think order […]
S&P 500 Earnings Boom & Japan’s Equity Breakout | 2025 Outlook
Moving On The S&P 500 are close to wrapping up the best earnings season in four years. Most corporates in the index have beaten earnings estimates at the highest rate since the third quarter back in 2021. However, the forward PE is now stretched to near 23X, which is high by historical standards. Investors are anticipating earnings growth […]
Rising Dragon
Chinese equities surged on Monday, extending a liquidity-driven rally that some believe is showing signs of euphoria in certain pockets of the market. I believe that key China/Hong Kong benchmarks are resuming a bull market, which is only in the very early stage of an innings. The path of least resistance is to the topside, given […]
