1. Yields Are Spiking Everywhere
Yields are spiking everywhere.
The U.S. 10-year is at 5.14%, while the U.S. 30-year is at 5.40%.
Japan’s 10-year is at 3.07%, the highest since 1996. Germany’s 10-year is at 3.57%, the highest since 2008. Canada’s 10-year is getting close to 4%.
What could go wrong?
There is way too much debt out there, and yields are spiraling higher. There will be victims if this continues for long.
2. Higher Yields Could Pack a Punch
We are getting closer to the end of the third quarter.
Remember, yields and interest rates impact valuations. When valuing a stock, you generally use an interest rate to determine what its current price should be. When that rate goes up, the current value comes down.
Higher rates can certainly deliver a solid punch in the face to the stock market.
Be careful.
3. Oil Is Surging Again
Oil is surging.
War risk is creeping back into the energy market after a short-term period of relief.
Higher oil prices are also impacting yields.
Diesel prices aren’t calming down. A lot of pain could follow if prices remain elevated in the coming months.
Remember, diesel is a very commercial fuel.
4. Lots of Noise Around the U.S. and China
There is a lot of noise around the U.S. and China.
The market is looking for some sort of breakthrough. But will it happen?
Also, President Trump is likely looking for some sort of win before the mid-terms.
Will there be a win, or “losing,” continues?
5. Gold Breaks Below the 50-Day Moving Average
Gold is below $4,300 and below its 50-day moving average. A close below it could invite sellers. If sellers do come in, the next stop could easily be $4,000.
The U.S. dollar is really strengthening here. We are watching USD/CAD and USD/JPY closely.
Bitcoin has been under pressure over the past few days, but the chart continues to look good for now.
Prime Minister Carney is prepared for the “risk” that Trump might order a U.S.-led military invasion of Canada…that’s a headline you wouldn’t expect to read.