“Quickness is the essence of war”
— Sun Tzu
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… Speedround …
US and European stocks closed higher yesterday, with the focus of market participants mostly still on the ongoing earnings season.
The S&P 500 closed less than one percent off a new all-time high:
The number of stocks closing higher on the day was more than double the number of stocks closing lower, whilst 43 stocks closes at a new 52-week high versus 13 at a new 52-week low. The new highs were dominated by tech, communication and financials stocks, whilst the lows were dominated by consumer staples:
Asian stocks are printing widely green this early Thursday, with the notable exception of Indian stocks, where benchmark are showing losses to the to tune of about a quarter percentage point.
Equity index futures on European and US markets point to a friendly start here too.
In interest rate markets, yesterday Treasury secretary Bessent, an outspoken critic of previous secretary Yellen and her tendency to roll-over long-ter maturing debt into shorter-term T-bills, found out that that it is easier to talk from a distance than to have to take tough decision being at the steering wheel, as he left Quarterly Treasury Refunding Schedule largely unchanged.
However, he did make an interesting comment down the lines of that the Trump administration's focus is on bringing down 10-year Treasury yields, not the Federal Reserve's benchmark short-term interest rate.
It was probably this that led to a rally in bonds and a drop in the US 10-year Treasury yield:
In currency markets, the Dollar has been flattish versus most other major currencies over the past few hours, with the very notable exception of the Japanese Yen. It seems the ball is starting to roll in the by us desired direction now:
Down now nearly four percent since the top on the 8th January, it is now the strongest currency versus the Dollar amongst the G10 currencies on a year-to-date basis:
Finally, the BoE is scheduled to announce their policy rate decision. As the following table reveals, the current rate is 4.75% and a vast majority of analysts giving input to this Bloomberg ‘survey’ expect a rate cut of 25 bp down to 4.50%:
But being the sarcastic individual I am, what caused most of my attention in the above table is the line “Qualified Economists”. Is that supposed to be a positive or a warning?
With that out of the way … have a great day!
Apart from the fact that the world should not be surprised by Trump implementing tariffs, because he told us for months on end, the graphs below that the world should also not be surprised what may have triggered this…
Word Trade with US vs China, 2000
Word Trade with US vs China, 2020
Source: Apollo Global Management
