Major indices are now showing signs of risk aversion, which we haven't seen since the Iran/Israel skirmish in April 2024. The Fed seems dead set on a rate cut for September, before the U.S. elections in November. Which markets have this already priced in, thus messy profit taking could turn into capitulation as the China trade war heats up, and all those hidden surprises you won't see coming. (update 1)
Update 1
I wrote this piece below on the 18/07/2024, prior to the Global Tech Crash, re *"other hidden nasties brewing". Does calamity come in Threes, Fours, Fives of Sixes?
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Markets are now under selling pressure, mostly from messy profit taking, which could capitulate on any sudden shock and awe, and that could come from anywhere. Hence over speculation i.e bubble, that was allowed to brew beyond a certain Central Bank mandate of price stability and low unemployment, but ok with rampant speculation being that last resort liquidity provider. Such is the folly of it all.
The NASDAQ (above chart) with it previous close, fell over 2.50%, finishing below its all time highs of 20,000 at 19,705 at a 0.48% fall, but it was the DOW which took the hit falling 1.29%, but still bid over 40,600. These juiced up indexes are all readying for the Federal Reserve rate cut prior to the U.S. elections on the 5th November 2024. With the Fed gauging slowing demand, but no recession. This is their preemptive strike to offset a possible recession for the U.S., or at least as a futures bet, which is incorrect. Consumer prices are not falling that hard. The Fed is likely to mess this whole thing up, if panic kicks in on top of a harsh trade war with China, and *other hidden nasties brewing.
The CBOE Volatility Index (VIX) lurched to its 5 month highs at 15.30 (below pane), as investors began to hedge for risk aversion, which we haven't seen since the Iran/Israel skirmish in April 2024, when the VIX hit 18. Please refer to price notes.
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