I will summarize the financial media talking points for you, so that you don’t have to consume it on your own.
Higher rates are good because it means the economy is getting stronger.
Lower rates are good because low borrowing costs enables companies to finance share buybacks and economic expansion.
A strong dollar is good because it means our economy is doing well.
A weaker dollar is good because it helps our exporters.
Higher crude is great for stocks, because it helps earnings for energy, industrials and transport companies.
Cheaper crude is good because it gives the consumer more money to shop at the mall.
Trump will be disastrous for Wall Street because of his protectionist policies.
Trump is great for stocks because of fiscal stimulus prospects, lower taxes and less regulations.
Got it?
In light of the hawkish Fed comments, suggesting we’re in for 3 rate hikes in 2017, 2yr bond yields skyrocketed — higher by 10bps to 1.27%, the highest level since 2009. With hawkish Fed policy comes a whirlwind of dollar buying. The greenback soared v the yen by 1.6% to the 117 mark and +0.92% v the euro to 105.
On election night the yen was trading 101 v the dollar. This is an unimaginable boon for Japanese exporters.
Bottom line: the groundworks has been prepared to derail the Trump administration. On the political end, they’ll entangle him with Russian conspiracy theories. And on the economic side, they’ve given him a soaring market based on a fiction. Retails sales are not getting better. As a matter of fact, they’re getting worse. Any push for fiscal stimulus will be met with opposition from both parties, supported by comments from the likes of Yellen — who said we don’t need it. Lastly, the soaring dollar and higher borrowing costs are a negative for the economy, none of which, thus far, haven’t been discussed by our idiotic financial media.
The dollar index is at 102, its highest level since 2002.
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DXY strength will also lead to stress in EM debt.
how are those gold miners doing ? they are getting really really oversold now huh ??
It’s like holding a customized piece of hell.
5% to 10% max and as hedge, never sold.
Spiking $US is either due to a crisis, or it creates a crisis. not sure which it is this time.
Last time dollar moved like this was early 2015. It crushed earnings by 11%.
Today was the top of the bull market. There I said it.
Timestamped.
Fuckin aye!
today was day gold miners bottomed…there I said it
Eurozone is very scary. Any flight to safety when and if it happens will drive money into treasuries and $US.
I just sold all of my TLT before Yellen! I had enuf of my Giraffes sucking dick.
I now come here for Fly’s political views and OA trading ideas… can’t wait for you to get back in the fucking game in 2017… btw whatever happened between you and Chess?
Chess wanted to start his own site, but went about doing it in a very immature fashion. I wish him nothing but luck.
I sold my high yield energy bonds Monday from Feb. lows, best trades of my life…I have also had about 5% exposure to gold miners and have been smoked. I just added SLV this week and it held up ok today. I got short global multinationals through DPK etf and will likely hold for awhile. I also got short the dow through etf this morning and got long t-bonds through TLT after the fed move and it kept going down so will have to keep that one on a short leash.
Lord Fly, Any thoughts on what may finally dick-smash this dollar rally? I see nothing but positives for the dollar but something has to give..ay?
I asked OA about that and he replied he was not concerned.
DXY going to 107-109 ?