Chief Investment Officer
Summary: Last 24 hours we have seen positive signs of stability and liquidity coming back to the market. We still need COVID19 cases to peak to find solid grounds, but for now storm is ebbing.
What has happened?
In the last 36 hours we have seen more policy changes than in my full career of >30 year as trader!
What did market do?
But... this is far from over but we today left the FEAR part of this bear market. It remains a bear market. Think of this as an Elliot Wave Structure - We may just have completed the Wave 3 down, now comes 4th up move, before final 5th wave down (I call this the recession / depression) move in Q3 into Q4...
FED and global government has committed grant/Helicopter money to stop the bleeding. How we trade from here depends on how we navigate the difficult path of securing social order, fabric and ultimately "fairness". Illusive terms, but if the money does not reach people who really needs them, then the next crisis will be bigger and more violent. However if we secure social order/base and institute proper price discovery and business cycle post this cycle in 2021 then we have a chance. (My main scenario)
For now though... 'Fear' is replaced by 'nervous stability' but it’s based on CONGRESS DOING DEAL NEXT 24 hours
Now we look into month end to get a feeling for redemption in funds, the overall liquidity and the end of Japanese Fiscal Year.
Analog chart on prior crisis
Credit Monitor from Saxo Trader
CDX Spread – FIRST DOWN day in this cycle…
VIX
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
