“It is better to be approximately right than precisely wrong.”
— John Maynard Keynes
For the full dashboard, please click on ‘Download’ below:
Yesterday I suggested in this little missive that a low-probability, high-impact trade could be shorting the equity indices, as the Fed still may surprise with a, well, uh, surprise hike.
Didn’t happen, of course, albeit voices about political unneutrality (not a word, but you know what I mean) are getting louder, but luckily, tech earnings, especially those of Alphabet came to the rescue. Henceforth, index futures (S&P 500 and Nasdaq) are dropping in early Thursday trading.
However, globally, the picture is more mixed as I type 7:20 am:
But back to yesterday’s session, where I struggle to remember such intraday indecisiveness, especially post the FOMC presser. Here’s the intraday chart of the S&P 500:
Not helping was the impression that the Fed wants to tighten, but not quite just yet, as Chair Kevin Warsh acknowledged robust economic growth, a healthy labor market, stubborn inflation, and financial conditions that aren’t tight. Yet he cited tightening financial conditions, anchored inflation expectations, and improving productivity as reasons for patience.
What? Exactly!
John Authers of Bloomberg fame comes up with the best summary by quoting young Saint Augustine of Hippo some 1600 years ago:
“Lord, give me chastity and continence, but not yet.”
Similarly then, bonds (below the 10-year US Treasury yield version) did not know what direction to look either:
Back to the equity markets for a moment, where we can read from our fantastic, new dashboard that the ups and downs on the day in Europe and the US were split quite precisely down the middle:
In currency markets, the Euro had a few minutes in the sun versus the US Dollar briefly yesterday, but was rejected at the 1.1150 pivot level (dotted line), which previously was a small support and now apparently has turned into resistance:
It seems to be more about EUR weakness than USD strength at the moment.
We still like our CHF/JPY short and expect a resolution out of the consolidation pattern soon:
In other markets, Gold is still holding above key support:
However, Silver isn’t:
I don’t have much more for today. Be careful out there, and,
May the Trend be with You!
André
There are 124,750 possible pairs of companies within the S&P, and at present 40% are negatively correlated. That’s a lot ... That can ultimately be attributed to the zero-sum games created by AI and the oil price shock, and they make life difficult for us investors.
The Important One:
Everything in this document is for educational purposes only (FEPO)
Nothing in this document should be considered investment advice
Investing real money can be costly; don’t do stupid shit
Leave politics at the door—markets don’t care.
Past performance is hopefully no indication of future performance
The views expressed in this document may differ from the views published by NPB Neue Privat Bank AG
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