The slowing rate of disinflation due to higher economic growth will dash any hopes of a soft landing. Markets have interpreted disinflationary data as a reason to relax policy. The US dollar's strength compared to the worlds economy has faltered since, September 2022. A lot of market participants have flipped bullish on risky assets in the wake of an incredible incline of Tesla and BTC.But, I believe the dollar and consumer staples are very oversold. Even though I realize that there's disinflationary data, the dollar is due for a bid. Also it is in the fed's best interest to tame inflation by having a higher dollar. Everything becomes more expensive when the dollar weakens. It seems silly that the same ones saying the fed will cut rates by the End of 2023 when, the fed is planning to hike rights in February 2023 also, say that fed policy works in long and variable lags. Core CPI measures long term inflation and is very sticky.
1. Gold's price is heavily dependent on the strength of the dollar and real interest rates. Nonetheless, Gold is overbought.
2. Bitcoin/Crypto is priced in dollars at the end of the day and is reliant on liquidity conditions fueling risky conditions. Crypto is literally a bet that the currency of the global financial system falters. When borrowing rates with respect to inflation are lower, there is more liquidity and reason to bet on technological innovations like blockchain.
3. 1/(XLP/QQQ) shows how the outperformance of consumer staples matches risk off moves. Chart: Inverse(Consumer staples (XLP/QQQ) vs. Technology (QQQ))..Looks like BTC , no?
1. Gold's price is heavily dependent on the strength of the dollar and real interest rates. Nonetheless, Gold is overbought.
2. Bitcoin/Crypto is priced in dollars at the end of the day and is reliant on liquidity conditions fueling risky conditions. Crypto is literally a bet that the currency of the global financial system falters. When borrowing rates with respect to inflation are lower, there is more liquidity and reason to bet on technological innovations like blockchain.
3. 1/(XLP/QQQ) shows how the outperformance of consumer staples matches risk off moves. Chart: Inverse(Consumer staples (XLP/QQQ) vs. Technology (QQQ))..Looks like BTC , no?
코멘트:
SPY/IEF - Bonds will likely outperform Equities
