S&P 500 rose, driven by tech at expense of value, which is normail in economic slowdowns. The junk bond rally however stands out – a prime candidate to attract selling at the nearest whiff of risk-off. The many fundamental reasons described in Monday‘s article, remain intact, if there weren‘t geopolitical ones. Tellingly, the yield curve inversion continues deepening, and bonds aren‘t buying the tightening story in the least – they fear the Fed overdoing it. And that‘s a key catalyst behind yesterday‘s decline in real assets, with its new interpretations of neutral Fed funds rate, or „having enough not to make trade- offs“ inflation remarks.

Sure, ISM services PMI provided a daily boost to the rally, and so the revamp calculations behind tomorrow‘s non-farm payrolls would work (would the pesky hours worked sending the opposite message, get recalculated as well?) in a bid to keep the increasingly FOMO confidence in the S&P 500 rally going. It still has the hallmarks of a short-covering rally, and not of genuine animal spirits – that doesn‘t square with the dreaded R word.

S&P 500 and Nasdaq outlook

SPX

S&P 500 rising volume says that it‘s not yet time to get resolutely rejected. When XLY starts weakening, that would be a good time to be onboard with a short position.

Credit markets

HYG

TLT hasn‘t topped yet in the least, the run against the Fed would continue – Treasuries are to peak in November. But first and still this month, HYG would be getting into increadingly hot water.

Bitcoin and Ethereum

BTCUSD

Cryptos continue losing altitude, and intraday upswings aren‘t indeed to be trusted – as said yesterday, no technically significant level would be breached, there is nothing to turn this ship around yet.

All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.

Feed news Join Telegram

Recommended Content


Recommended Content

Editors’ Picks

AUD/USD bears trying hard to keep reins below 0.7000, US/China inflation eyed

AUD/USD bears trying hard to keep reins below 0.7000, US/China inflation eyed

AUD/USD remains depressed around the intraday low near 0.6955 as sellers keep reins for the second consecutive day ahead of the key US inflation data. Firmer China CPI may offer intermediate help but US inflation is crucial amid strong jobs report, hawkish Fedspeak.

AUD/USD News

EUR/USD struggles to defend 1.0200 as sour sentiment teases DXY bulls ahead of US inflation

EUR/USD struggles to defend 1.0200 as sour sentiment teases DXY bulls ahead of US inflation

EUR/USD fades the corrective pullback from 1.0202 around 1.0215 as traders turn cautious ahead of the key US CPI during the initial hour of Wednesday’s Asian session. Also exerting downside pressure on the major currency pair are the economic fears surrounding the Eurozone.

EUR/USD News

Gold aims to recapture $1,800 as investors trim US Inflation forecasts

Gold aims to recapture $1,800 as investors trim US Inflation forecasts

Gold price is displaying a volatility contraction after printing a fresh monthly high at around $1,800.00 on Tuesday. The precious metal witnessed a decent north-side move on Tuesday and later on turned sideways ahead of US CPI.

Gold News

Crypto Sleeping Giants: Hedera Hashgraph price could shock the world

Crypto Sleeping Giants: Hedera Hashgraph price could shock the world

HBAR price shows a drop in volume amidst the current downtrend. Hedera Hashgraph has the potential to rally towards 2000%. Traders should keep the smart contract alternative token on their watchlists and consider a dollar cost average approach for investing. 

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Majors

Cryptocurrencies

Signatures