Erik Schafhauser Zürich Erik Schafhauser Zürich Erik Schafhauser Zürich

Morning Brew March 1 2024

Morning Brew 1 minute to read
Erik Schafhauser

Senior Relationship Manager

Summary:  Are we topping out?


Good Morning,

Stocks rose yesterday, fueled  by the fact that the PCE Price index did not surprise to the upside as some apparently hat feared. Both the Nasdaq 100, climbing 1% to 18,044, and the S&P 500, adding 0.5% to 5,096, making new record highs.Volumes were huge at 20% above the regular volume (20 d MA). AMD soared 9.1% while Marvell Technologies, ARM, Intel, and Nvidia gained 6.1%, 5.4%, 2.5% and 1.9% respectively, Dell added 17% after results after the bell.

Levels to digest: The US500 is above 5100, The Dow 39k, the Japan 225 is testing 40k, the US tech 100 NAS the 18100, GER40 17800. Our Peter Garnry is going out on  a limb and calls a top or at least the promximity thereof.

Here we go again, the bubble fever is back! :

“Last year we said that equity valuations were not a concern for global equities but US equities were getting increasingly stretched. However, when you have an AI hype then things can get really stretched and our view is now that we have entered a dangerous level again in US equities. As our valuation chart below shows, US equities are now significantly more expensive compared to the average valuation since 1992. In fact, US equities have now reached levels we have only observed during the dot-com bubble and the 2021 technology bubble during the pandemic.What should investors do:

  • Reduce exposure to equities and increase exposure to bonds in order to reduce portfolio risk.

  • Reduce exposure to US equities and Increase exposure to European equities which have a less cyclical profile and lower equity valuation.

  • Increase exposure to dividend stocks as they will likely be less volatile should the equity market begin to reduce lower US equity valuations.

Rates came off a little while the USD Index gained after the inflation data, the USD Index is 104.15 at the moment with EURUSD 1.0810, GBPUSD 1.2626 and USDJPY back above 150. Gold and Silver gained to 2046 and 22.73, both are at technically very interesting levels and if Gold manages to close above the descending trendline many would see  that as a strong sign.

Bitcoin it taking  a breather below the all time highs, tha twill be intersting!

If you want to learn more about why the commitment of Traders report is important, check out this podcast with Ole

China's parliament is expected to unveil more stimulus next week, while Deutsche Bank is said to be preparing a liquidation lawsuit in Hong Kong against Chinese developer Shimao Group, acc to Reuters.

Today we will focus on the sentiment into the month start, weekly close levels, EU Inflation, the US PMI and the University of Michigan sentiment.

Trade safely

 

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)
Full disclaimer (https://www.home.saxo/legal/saxoselect-disclaimer/disclaimer)

Saxo Bank (Schweiz) AG
The Circle 38
CH-8058
Zürich-Flughafen
Switzerland

Contact Saxo

Select region

Switzerland
Switzerland

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law.

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.