1. AI Trade Under The Microscope
There are a lot of concerns around the AI trade, and valuations are being questioned.
If you own AI stocks, you’ve got to be careful.
Over the past few weeks, we’ve seen disappointment from AI related stocks.
OpenAI revenue down, IPO getting pulled, data centers stocks getting pummeled.
Anthropic IPO is coming up soon. Let’s see if it gets shelved. If yes, that’s has a potential to hurt the sentiment towards AI even more.
2. Yields Cool, But Oil Keeps The Pressure On
Yields in the U.S. are cooling a bit, with the 10-year closing in on 5% and the 30-year at 5.4%.
This is good, but at the same time, the trend is still pointing up. Bond market in no way has calmed down.
Oil prices continue to trend higher too. There’s been a big correlation between oil and yields these days.
Plus, government spending hasn’t really cooled, so there are broader concerns about what happens to yields.
3. Gold’s Coiled Spring: A Big Move Could Be Coming
For several weeks now, gold has been stuck in a range between $4,100 and $4,200. It hasn’t broken above or below it.
The longer it stays in this range, the bigger the eventual move could be, either to the upside or the downside. We won’t get a clear direction until the range breaks. Once it does, we’ll have a better idea of where gold could go, at least in the near term.
For the bigger picture, $4,000 is a massive level for gold. If that breaks, gold could go much lower. For gold to move higher, it’s going to be an uphill battle.
Silver is trying to find some support. Let’s see if it holds. It still hasn’t recovered from the selloff a few days ago, and the chart continues to look weak. But $55 is holding up really well for now.
4. Earnings Season: Tech Propping Up The Indices
Earnings season continues.
The S&P 500 is trading at its 50-day moving average, with a bunch of companies still expected to report.
Keep in mind, it’s all about guidance and expectations rather than what has already happened. Nothing has to go wrong for stocks to fall. If people decide to take profits, the market falls.
There’s also a big divergence between sectors. Tech is keeping the indices up and making them look good. Underneath, there’s a lot of damage.
5. Bitcoin: Is $100K The Next Stop? Canada + Oil
Bitcoin has found support at its 50-day moving average, around $82,000. That’s also the retest of the breakout we’ve been flagging for weeks now. Let’s see if there’s more upside. A move above $86,000 would be very healthy and could take Bitcoin to $100,000.
The oil market continues to be volatile, with a lot of noise around what’s happening in the Middle East and between Russia and Ukraine. Allocate wisely.
Canada continues to face short-term pain. The Canadian dollar has bounced a little, but the chart remains weak. A lower dollar may actually be welcomed by the Bank of Canada.
Investing 101: If something has gone down 50%, it has to go up 100% for you to break even. And 100% moves usually don’t happen very quickly after a stock has fallen 50%.