The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Buyers step up
Broadcom announced last night and while it beat, its guidance didn’t wow the Street. The stock was punished and the AI space also took a beating. S&P 500 futures felt the pain initially too. US/Iran news offered no clarity on the situation. Asian markets fell, European markets climbed small. Crude prices sank modestly across the curve and so did US Treasury yields. The S&P opened down about 30 points but climbed slowly and steadily all session, going positive around 11 AM. The Dollar fell small and precious metals climbed small. Bitcoin fell again.
Hmmmm. Despite the murkiness concerning the US/Iran situation, major markets all reacted with peace-is-coming moves, excepting Bitcoin. Crude, Treasuries, and the Dollar established their reactions from the jump. Stocks started the day differently than they finished. For the S&P 500, it looks like the dip-buyers went to work early and then benefitted as lower rates and crude provided some fundamental support.
Bitcoin is a different animal altogether. At times, in the past, it shared behaviors with other assets. Early in the US/Iran war, Bitcoin reacted as a risk asset, and so we watched it for the signals it would send. Lately it has broken away from all other markets and it does its own thing in isolation. As a large and novel financial instrument, it still merits watching but I don’t think it tells us as much about the world that it used to. It seems to be exclusively telling us about itself. I wonder if that is a signal in and of itself.
Refocusing on traditional markets, today was unambiguously good. Crude prices dropping, yields dropping, stocks climbing is a good trifecta. It remains to be seen whether we’re about to start another positive trend or not. I think the larger economic environment favors an extension of today’s moves but the short term is always noisy. The nonfarm payrolls (+85k est vs +115k prior) tomorrow could throw a monkey wrench into things, but I think that’s less likely than not.
We’ll find out soon enough. See you tomorrow.
-Mike
Visdom Market Commentary
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