US Futures are trading marginally lower on Tuesday morning with the Dow down -0.16% to 34,821, the S&P down -0.21% to 4,369, the Russell down -0.37% to 2,268 and the Nasdaq down -0.4% to 14,865 as of 8:50AM. We saw June CPI come in extremely hot moments ago at 0.9% vs the 0.5% expected, while Core CPI also came in at 0.9% vs the 0.5% expected. We're talking YoY CPI of 5.4%, folks. Ouch! Good luck with the transitory narratve now DJ Powell.
PepsiCo beat earnings estimates this morning and is up around 1.6% in pre-market trade, while JP Morgan and Goldman Sachs also released strong earnings which showed a slip in FICC and trading desk revenue for JP Morgan (but a beat on earnings), while Goldman reported their "second best quarter in history," according to ZeroHedge.
The US10Y yield is down around -0.75% to 1.35%, and is falling fast after the hot CPI print as investors flee into USTs. The Dollar caught a strong bid - we're up around 0.25% and sitting at 92.47. Gold is trading relatively flat - we're up 0.6% to 1,807.4, while WTI rose 0.18% to 74.27. Vix is holding on to a 16 handle for dear life after a light rebound yesterday after Friday's massacre.
Finally, Bitcoin (BTCUSD) is down around -1.80% to 32,522, and looking incredibly bearish as we approach 30k support. This is playing out like a dead cat bounce which looks poised to resolve itself in the very near future. I may be a buyer of Bitcoin at the 20k level, depending on the state of the equity market, and of course, the policy outlook.
Today should be a doozy after this morning's insane CPI print. Let's see how things shake up. Cheers, Michael.
Read somewhere that the correlation between S&P and BTC is negative correlation. So, if the S&P is going down following the CPI rise, shouldn't there be a recovery in BTC? Just curious
Hedge_Of_The_World
⋅
@Mudrex, I think it used to be, but I don't think that's the case anymore. The correlation should actually be positive going forward imo because the inflows to both are putting investors at risk. The Bitcoin craze was aided by easy mnonetary policy, so I believe as the Fed begins to talk about talking about tapering, Bitcoin, along with all other risk assets, will be repriced. The cost of debt will rise soon, which will pull flows away from speculative, high beta, assets. If markets correct, I expect Bitcoin, and potentially all crypto to sell-off even more aggressively. Next stop for Bitcoin is 20k imo. What are your thoughts?
Mudrex
⋅
@Hedge_Of_The_World, we are in for interesting moments in this space then. I am looking forward to what happens in the coming months.
HK_L61
⋅
Michael, I have $9200-$9800 for BTC orders. Then 100K after the FED quadruples down. We will see, it either goes to ZERO or 100K imho.
Hedge_Of_The_World
⋅
@JRML115847 For sure.
Mihai_Iacob
⋅
Excellent setup,thank you!
Hedge_Of_The_World
⋅
@OptimoomFX, Anytime buddy!
HK_L61
⋅
@JRML115847, Cheers Michael :) It is getting Ripe, few weeks we should see a large decline.
Hedge_Of_The_World
⋅
@JRML115847, Cheers buddy! We're getting there. It's really a patience game right now. Watching the market today is like watching the Hindenburg live in 1937...