Highlights
• Gold is up, but gold miners are down?
• Most data tell a different story than GDP and NFP
• Highlighting our latest Strategizer results
• The Beige Book reveals no inflationary mindset
While We Were Sleeping
“The world is pricing in a soft landing, at probably 70-80%. I think the chance of a soft landing in the next year or two is half that … I don’t know what the bitcoin itself is for, but I defend your right to smoke a cigarette, I’ll defend your right to buy a bitcoin. I won’t personally ever buy a Bitcoin.”
— JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon, via video link at the Australian Financial Review Business Summit in Sydney
In a complete reversal from this time yesterday, global equity markets are rocking and rolling. Outside of Japan, where the Nikkei 225 was little changed, it was nothing but green arrows across Asia: Hong Kong (+3.1%), Taiwan (+1.0%), Korea (+0.8%), India (+0.5%), and both Thailand and Singapore eked out +0.1% gains. Europe has rebounded +0.4% here in the early going, and U.S. futures are up modestly.
The keys yesterday were a) the -0.8% pullback in the Russell 2000 which finished near session lows for the second day in a row and looks to have met stiff resistance at the 2,100 level, and b) weak breadth with decliners topping advancers 7-5 on the Nasdaq while 6 of the 11 S&P 500 sectors closed in the red. We are also seeing the stock market begin to pile up “distribution days” where prices and volumes move in opposite directions — a sign that institutional investors are beginning to change strategy and sell into strength just as the retail investors pile in. We have long been constructive on aerospace & defense stocks given the troubled state of the world, and that view received a shot in the arm from U.S. Boosts Global Role as Arms Exporter on page A3 of today’s WSJ (I prefer themes related to facts rather than speculation).
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