1. Japan Just Got Even More Interesting
The U.S. Treasury has apparently informed banks that it may intervene in the yen market.
How would one do that? Sell yen or sell dollars? Swap lines?
Wild move in the yen yesterday. Very likely today will be the same.
Don’t overlook this story. Rising oil prices make things worse for the currency too. Japan is a risk that’s overlooked.
2. Canada Is Out of Recession? But Don’t Celebrate Yet
Canadian GDP came in better than expected for the month of May. Advanced figures for June also show growth.
Canada is likely out of a “technical recession.”
But know this: the problem is stagnant growth going forward.
That hurts the most.
3. U.S. Yields Are Becoming a Global Problem
U.S. 10-year Treasury yields are at 4.7%.
Understand that U.S. yields act like gravity for global bond yields. If U.S. yields soar, what happens to global bond yields?
Inflation is the talk of the town right now, and it makes sense why too.
Have you looked at oil prices lately?
But! Watch for that demand destruction on the back end. Something no one is talking about.
4. Gold Couldn’t Hold $4,100
Since this morning, gold has given back all of yesterday’s gains. It couldn’t hold $4,100. Let’s see how the day ends. It’s choppy for now. For direction, we need a close above $4,100 or below $4,000.
Silver remains technically weak.
Copper continues to be interesting because it recovered very well. But it’s choppy at the moment.
Platinum and palladium remain weak.
The pressure on the metals market is coming from higher yields and a stronger U.S. dollar.
5. Know What You Own
Situational Awareness liquidates. This is nothing but a prime example of how one could make money, but at the same time hurt themselves badly without having any downside protection.
Chip stocks, memory stocks, etc.: If something goes down by 50%, it has to go up 100% just for you to break even. Just think it’s worth mentioning.
Meanwhile, the S&P 500 is back at its 50-day moving average. It’s retesting. If it fails, don’t be shocked to see more selling.
Software names are catching a bid. Is it because AI expectations are somewhat losing momentum? We warned you. AI isn’t going away, but expectations have gone from optimistic to madness.