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Another week, another all-time high for US indices

Another week, another all-time high for US indices

Another week, another all-time high for US indices

The US indices continue to plow higher, as we have seen insatiable demand for equities in the United States. We have gotten through earnings season with nary a scrape, as ultra-loose monetary policy continues to push indices higher. The S&P 500 and the Dow Jones Industrial Average have both reached all-time highs, while the NASDAQ is very near its own. That being said, the NASDAQ has been suffering at the hands of interest rates spiking on the occasion, as the leading “growth companies” in that index tend to be very sensitive to interest rates overall.

There is now talk of a liquidity issue in the banking system, which almost certainly will keep the Federal Reserve loose with its monetary policy, which has been one of the major drivers of stock indices in America. While we are in one of the clients times of the year, the markets have quietly been grinding to the upside and performing in a very steady and resilient manner.

Chinese port shut down raises concerns

Chinese port shut down raises concerns

Late in the week, a covert outbreak has partially shut one of the busiest container ports in the world. The Ningbo-Zhoushan port in China is bracing for a potential shut down, cause a major supply chain issues going forward. The major companies charting ships are already starting to add covert contract clauses as insurance so they will have to pay for stranded ships, things have gotten so bad.

The delta variant has caused quite a few concerns in multiple cities in China, and now that we are starting to see the port cities be locked down, there are major concerns about transpacific mobility as the Port of Los Angeles has already seen that the volume dip drastically back in June when the port of Yantian in China shut down. This had cause major bottlenecks in the supply chain, which was just getting back on its feet before this latest variant. This is a story that is worth paying attention to, as shortages continue to be a major issue in the United States, even showing up in places such as Kentucky Fried Chicken packaging, and certain products offered at other fast food restaurants.

Gold has wild week

Gold has wild week

The biggest story of the week was when the market opened up on Monday, with Asian traders panicking and sending gold down roughly $100 per ounce in as little as 30 minutes. Because of this, gold looked as if it was flat on its back. However, it is worth noting that the Japanese banks were closed on Monday so lack of liquidity could have been a major issue. Beyond that, the move was a delayed reaction to the spike in interest rates in the United States it happened late on Friday. It set up a “perfect storm” of selling, but since then the gold markets have rallied quite significantly to not only show stability but take out all of the losses from the Monday session, forming a very solid base for potential strengthening in this market.

After chaotic opening, markets stabilize for the week

After chaotic opening, markets stabilize for the week

At the open on Monday, Asian traders reacted to the massive selling of precious metals in the United States after interest rates went higher in a bit of a panic. This was exacerbated by the fact that there was a severe lack of liquidity as Japanese banks had been closed. This initially had the market looking very “risk off” around the world, but over the next couple of sessions traders had turned everything around.

Equities:

Equities:

Equity markets rose during the course of the week, despite the fact that we had initially seen futures crashing at the open. In fact, all across-the-board there had been plenty of “buy on the dip” traders out there waiting to pick up the pieces. The S&P 500 was up 82 basis points, while the Dow Jones Industrial Average was up 1.36% for the week. In Germany, the DAX continues to show strength, up over 1 ¾%, with Tokyo up over a full percent as Asia followed suit. Massive liquidity measures by central banks
continue to be one of the biggest supporters of equities.

Index Change
S&P 500

S&P 500

0.820

Dow

Dow

1.360

DAX 30

DAX 30

1.770

Nikkei 225

Nikkei 225

1.140

Forex Pairs

Forex Pairs

Currency traders sold the US dollar in general, as the Euro rallied 27 basis points and the British pound rallied 16. The US dollar also sold off against the Japanese yen, losing almost 1/3%. The Australian dollar was relatively quiet, but is at very high levels, so I think it is only a matter of time before we make an attempt to break towards that crucial 0.80 level above.

Index Change
EUR/USD

EUR/USD

-0.320

GBP/USD

GBP/USD

-0.490

USD/JPY

USD/JPY

0.470

AUD/USD

AUD/USD

-0.850

Commodities

Commodities

Commodities sold off in general, as there has been quite a bit of volatility in the markets. Ultimately, it does look as if it is only a matter of time before we see a continuation of the commodity trade, but during the day on Tuesday, gold lost ½%, while silver lost 20 basis points. Crude oil markets lost over 1%, and natural gas markets have lost one half of a per cent.

Index Change
Gold

Gold

0.880

Silver

Silver

-0.210

WTI Oil:

WTI Oil:

0.010

Natural Gas

Natural Gas

-5.10

Crypto

Crypto

Cryptocurrency markets have been very bullish during the week, as we have seen massive battles in the United States Congress about regulation of decentralized finance causing concern, and of course the lingering effects of the Chinese crackdown on Bitcoin mining. By the end of the week though, everything had turned around and we had seen massive gains across the board, with the most notable one being Cardano, gaining 43%.

Index Change
Bitcoin

Bitcoin

13.40

Ethereum

Ethereum

11.00

Cardano

Cardano

43.810

Ripplr

Ripplr

35.90

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