QuiCQ 07/11/2024
Things that make me go hhmmmm
“It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.”
— Mark Twain (maybe)
For us professional financial market junkies observers participants freaks investors (and of course I refer to the supersmart QuiCQ-readership) the outcome of yesterday’s US election of course doesn’t matter, as it is far out our circular of influence. Plus, as the experience of the past few months shows, America runs perfectly well without a president …
What however DOES matter is HOW the markets (i.e. prices) react to the newly elected POTUS.
ONE - The continued rally in bonds yields, where admittedly we expected a bit of a “buy the rumour, sell the fact” reaction is worrisome for the longer run.
TWO - The nearly 6% rally in the Russell 2000 (small cap) stocks is lovely, but does not make a lot of sense over the medium-term in the face of higher bond yields (maybe part of the celebration was today’s supposed Fed cut?)
THREE - Out of the department “Things that make me go hhmmmm” I see Chinese stocks up 3% today and European stocks down the same size yesterday. Go figure …
FOUR - In the same context, largest losers in Europe yesterday car makers, alternative energy companies and banks. Interesting.
FIVE - Whilst “the trend is your friend” I would be cautious regarding the Dollar strengths, especially in the face of accelerating inflation expectations (see US breakevens)
With less than a day gone by since the elections, a lot of trades are still to be put on and others unwound, so let’s keep a close collective eye on price developments over the coming hours. Because, as we know, price leads narrative…
In that context, make sure not to miss next weeks’ Quotedian, which will take a closer look at some of the unfolding. Sign up here immediately, if you have not done so yet, to receive freshly brewed Quotedian in your inbox next Monday:
No QuiCQ tomorrow, have a great Friday and an even greater Weekend!
