Week In Review – July 6


  • Bounce week in the holiday-shortened sennight
  • The trade war began but the sun came up and the world didn’t end, so they bought ‘em
  • Defensive tone to trading, however. Telecom, utilities, and healthcare outperform
  • Big rallies in Brazil and Indonesia local bond markets, while Turkey continues to tank
  • Mexico, Argentina, and South African currencies stronger
  • Latin stocks up, China down
  • Russell 2000 up over 3 percent
  • Copper looks interesting after almost 16 percent sell-off since June 7th, the steepest four-week loss since 2011. Nice Dragonfly Doji on Friday.  Watch copper, needs to rally if equities are going to hold in.

Commentary:   Stocks continue to bang around pulled by expected strength in earnings and declining global liquidity, and warning signals flashing on geopolitics.  Tough to take anything away from the holiday-shortened week.  Payrolls came in a bit better than expected and a little above the 9-year monthly average of 200K.   Looks like boomers don’t have enough saved and have to remain in workforce past traditional retirement age, depressing wages.

Heavy lifting now begins.  Watching to see if S&P can take out 2792 and copper can bounce for us to at least be less bearish.

Fed steps up QT to $40 billion per month this quarter and reserves are declining in many emerging markets = shrinking global monetary base and tighter liquidity.  Moreover, the Fed will have less to rollover into Treasury auctions.

Emerging markets a long way from bottom and conviction medium to long-term buy.   Trading longs with rentals only and looking to get shorty higher or lower when market breaks.













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