With the US coming back from a long weekend, one might have expected stronger moves in equity markets—that didn’t happen. Most indexes traded barely half a percent down. The 10-year yield rose back above 1.6%. Gold is teasing investors, currently trading at $1,899.
Okay, so celebrating doing nothing got boring fast. Bitcoin has spent another day bouncing between support and resistance, and although it's nice not to be edging towards a heart attack, it has lead me to delve into some 'activity metrics' to get a better idea of the state of play.
Crypto markets (trading 24/7) didn’t rest and, unlike equities, rose. BTC gained almost 5%, rising from $35,500 to the current $37,300.
Last Friday finished on a risk-on tilt, with most equity indexes retreating at the end of the session, but still closing higher. Bonds were bought, pushing the 10-year yield, while gold rose to above $1,900. The dollar moved slightly up and slightly down, but is still trending lower.
I was looking at the dollar index on both a short and long-term basis: Its short-term moves up and down and seems to be affecting markets. The bigger picture, however, is that it’s inexorably going down. That’s a positive for real assets, if only from a price perspective—let’s ignore the real value for now. Equities remain elevated but with no indication of going down. Gold seems well supported, close to $1,900.
It’s been a somewhat tepid session all around. Investors are looking at both the next move from the Fed and the jobless claims data, due later today. Equities closed in the green but almost flat, and bonds in the red but almost flat. The dollar seems to have gained somewhat and, in response, gold retreated slightly.
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Interesting dynamic to observe in macro markets. While Fed comments remain accommodating, disappointing economic data pushed investors to sell stocks and buy bonds. The 10-year yield fell to 1.55%, which ultimately is a positive for equities. It’ll be interesting to see how far up or down they’ll go before things revert. Gold seems to be flourishing in the inflation-fear environment, now close to $1,900.
Bitcoin climbed back above $40,000 for a few hours today in what was a short-lived attempt to ignite a rally to $42,200. However, momentum was lost and prices have since trended back toward support at $38,800. If the drama really is over, then it's likely we form a range between $36,400 and $41,000.
It’s been a long-time coming: Ray Dalio, manager of the world’s largest hedge fund, finally said (admitted?) that he owns “some Bitcoin.”
In traditional markets, both the S&P and the Dow closed last week in the red (as they did the week before). The Nasdaq closed just barely higher.
Both traditional markets and crypto markets are up, yet there’s a different ambience in the cryptosphere. For all the people who held on amidst the crash, congrats, you’re at least higher now than when things dropped to 30,000.