I'm keeping this short as I have to prepare for the NYSE open as we see stocks extend their losses and US Treasury yields continue to rise after hotter-than-expected US retail sales increased speculation that bets on a Federal Reserve rate cut are overdone. In addition, import prices are higher than expected, reducing the cooling effect on consumer and producer prices.
Wall Street recorded a second day of losses after the holiday on Monday. Yields on two-year government bonds, which are more sensitive to upcoming interest rate moves, rose sharply to 4.35% – the highest level in 2024. The USD continued to strengthen against its peers.
US retail sales rose at the fastest pace in three months in December, ending a solid Christmas trading period. The value of retail purchases rose 0.6% when adjusted for inflation, the Commerce Department reported on Wednesday. Excluding autos, sales rose 0.4%.
The focus will also be on further statements from Fed officials and whether they continue to push back the overly optimistic rate cut hopes.
The reduced rate cut expectations / higher yields – continue to weigh on gold and oil prices. Many investors fell into the trap of global geopolitical tensions and expected higher oil prices – as always, we traded the fundamentals and got it right (as always) – congratulations!
👁 ROB'S MARKET OVERVIEW:
January 17, 2024
🌐/🇺🇸 Global/US Markets ↘️ (broad selling – with some dip buying waves)
Cyclical Stocks ↘️
Tech/Growth Stocks ↘️ (chip stocks still outperforming – but likely no gains)
Financial Stocks ↘️
Defensive Stocks ↘️/➡️
Energy Stocks ↘️
Materials Stocks ↘️
💱 Forex
USD ↗️ (due to reduced rate cut expectations)
EUR ↗️/➡️ (due to reduced rate cut expectations)
GBP ➡️
AUD, CAD ↘️
CHF, JPY ↘️ (headwinds as rate cut expectations fall for Fed, ECB, BoE / SNB and BoJ with much lower fund rates)
⚒ Commodity Markets ↘️
Oil prices ↘️
Natural Gas prices ↘️
Metal prices ↘️
Gold ↘️ (as yields continue to rise; occasionally dip buying on increased safe haven demand)
⚡️Cryptos ↘️/↕️ (Bitcoin remains volatile – while medium-term/long-term bullish – short-term we could see Bitcoin test $40K – $41K range)
(*↗️ bullish, ↘️ bearish, ➡️ sideways / stable, ↕️ mixed / volatile)
Your Robert
