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Monday 25th October 2021
Hi Friend,
TSE Monday Morning Markets ...
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| | The Saturday Economist Monday Morning Markets ...
This is our Monday Morning Markets Update for the 25th October. US Stocks moved higher, European stocks were down slightly, Hang Seng bounced back. Bitcoin ended the week unchanged having tested a new high mid week. Bond yields moved higher, the Sterling rally continues, oil remains sticky at $85 dollars, our Empires of the Cloud Fund was unchanged in the week ...
Top line, "Cash is Trash, (Jamie Dimon), Bonds are Garbage ( Bill Gross), Equities Are Overvalued (Everyman), Bitcoin is worthless (Jamie Dimon)" ... Be careful out there ...
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| | Markets closed up +0.5% ... Overvaluation +9.3%
Our index basket closed up this week 0.5%. U..S. stocks were up 1.3% led by SPX. European stocks moved down slightly, FTSE leading the way, off 0.41%.
In Asia, the Hang Seng jumped over 3%. Shanghai was steady with weakness evident in Nikkei and BSE.
Our over valuation index move to +9.3% for the index basket as a whole. The American components leading the charge with a 15% plus rating. Momentum trading carries the markets higher with great weight attached to Fed statements on inflation and the central banks reaction. Anxiety greets market twitches ...
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| | Bond Market Sentinel ... US Ten Year Yield 1.65 ...
US ten year bond yields moved higher up nine basis points to close at 1.65. In the UK markets ten year gilts closed up seven points to close at 1.16. Markets continue to speculate on the prospect of a UK rate rise in November.
In Japan, rates moved up two points. European bond yields closed up six points. Euro rates could be in positive territory by the end of next month.
Basing action completed in main markets, next the test of 1.80 in the US and 1.25 in the UK. Long way to go before the runways are cleared on Planet ZIRP ...
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| | Exchange Rates ... Sterling up $1.3821 ...
Sterling closed up against the dollar at $1.3821 from 1.3683 and up against the Euro at €1.1867. The cross rate Euro Dollar moved slightly higher at $1.1648 from $1.1574.
The Pound is trading at $1.3761 this morning against the Dollar, down sightly against the Euro. This week Chief Economist Huw Pill added to speculation of an early rate rise. $1.38 may be the extent of the Sterling rally. $1.40 the full stretch. Love those dollars ... make the switch ...
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| | Empires of the Cloud Trade Sideways ...
Our Empires of the Cloud Fund traded sideways this week. Apple and Microsoft leading the way forward, Google and Amazon heading in the wrong direction.
Our valuation index suggests a 12.4% over reach. A combined market cap of $9.2 trillion and an average PE of 36 suggests a period of consolidation should follow at best.
Our contrarian call for Alibaba still looks good. Closing at $178 the stock is up 27% from the October low. Want more top stock picks with a 25% upside in weeks? Join the club!
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| | Mid week high creates excitement ...
Big week for Bitcoin fans. The traders favourite hit an all time high of $66,600 dollars mid week before closing unchanged at $60,800. A test of $60,000 was introduced for the faint hearted at the end of the week. Tough to call the next move, easy to avoid ...
Overall the crypto wallet was broadly unchanged. Ripple down 6% offset gains in Ethereum, Litecoin and Dogecoin. Bitcoin is the best trading game in town. Now with institutional engagement, day trading currencies and indices offers chump change ...
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| | Oil Prices Moving Higher ... $85.39 ...
Oil
prices Brent Crude closed up at $85.39 last week. Trading at $86.12 this morning, oil continues to trade higher. Gas prices moved up in the week.
US oil prices WTI trade at $84.45 as we press send. Biden is calling the frackers back to work. The US oil rig count eased to 443 last week. We expect a pull below $80 dollars, $75.00 to $80.00 may be the range for the Brent Crude Autumn trade.
$80 to $85 dollars the more pessimistic or perhaps more plausible scenario. Price pressure at the pumps will continue the push on operating costs and retail prices ... Yep we got this one wrong ...
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| That's all for this week's Monday Morning Markets have a great week ahead ...
John
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© 2021 John Ashcroft, Economics, Strategy and Financial Markets, experience worth sharing.
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