Keep On, Keep Keeping On! [Video]

US Stocks Are In Heaven

I feel a bit odd to be honest to report about this ever-growing stock market in the US but it is what is happening, plus hardly any other market is even moving much this week. Yesterday now also Alphabet, Google’s parent company joined the ranks of the ! trillion Market Cap companies.

Top Heavy

The concentration of such few stocks having this massive value obviously impacts the overall index and makes it very top-heavy. This is very much the opposite of diversification which we should take into consideration.

Lets Look At Tesla For A Moment

Are companies, who are climbing on the stock markets actually profitable businesses?

Well some yes, and some are not, a prominent example remains Tesla which dwarfs traditional carmakers’ market cap vs car they produce and its stock just recently even went absolutely through the roof. Is this a legit increase of share price or possibly even a short squeeze? In California, basically Tesla’s home turf sales have been dropping strongly:

The Era Of Fed Power Is Over

Many analysts attribute the recent run in Equities to the liquidity injections of the FED into the REPO market. Yesterday alone the FED had to provide liquidity to the REPO market that was as much as the whole Phase 1 deal purchases of China in the year 2020, just to give you a little bit of perspective. The FED itself stated recently it does not want even be active in the REPO market but apparently it has enough reasons to keep doing it without openly talking about it which is why it appears the FED is losing grip on the Economy as explained in the WSJ article:

FX

Very little movement in FX the whole week long makes this section somewhat less interesting as it is usually the case. The USD gained some further strength on the back of better core retail sales readings out of the US while the EUR gave in some with the ECB minutes passing by with little to no movement as it did not reveal too much other than slightly better outlook by the ECB for the year 2020.

The GBP is still holding well, maybe too well looking to face a rate cut soon and this could be a present mispricing that could play out positively for GBP sellers. Watch for retail sales out of the UK today for some more hard data out of the UK.

The JPY trade is playing out at the moment and the USDJPY has gained some since yesterday and en route to continue further with stocks relentlessly going higher and JPY selling going hand in hand.

Oil and Gold

Nothing too much to see here either this morning, the price of oil did dip yesterday and quickly reclaimed the $58 level and traded even a little higher around $58.60. That said no important levels have been broken and I remain in wait and see mode here.

Gold remains also unchanged with no new risk events coming up within its range of $1,540-$1,560 requiring us to remain patient before drawing the next conclusions.

BTC

Bitcoin broke the $8.8k level to the upside this morning yet unable to touch the $9k. At the moment the price is holding at $8.87k after the first pullback which remains very close to re-attempt an attack on the $9k sooner than later.