Markets are focused on three topics this week: (i) The 4Q 2019 Earnings season, (ii) coronavirus spillover concerns and (iii) Sanders performance in Caucuses. In US Yields the picture is crystal clear on the Long-term chart, for those following the 1.50% support level we are tracking on the daily you will note where the strength in defence comes from in the medium term:
On the technical side the same levels to track:
Support: 1.50% / 1.45% / 1.32%
Resistance : 1.68% / 1.75% / 1.95%
In my books the impact of the virus is going to have a major impact on US GDP growth, tracking for 2% drag on Q1 growth. Chinese spending offshore is expected to drop by 0.6% (which is a conservative estimate). This is weighing on investor decision making as the impact will come through valuation changes rather than the earnings. If you are a believer in the virus having a short lived impact, then you can increase exposure on this dip in cyclicals and value companies. The industries hit hardest are airlines and travel with gaming to a lesser extent receiving a hit via Macao shutdowns.
All the best guys, and as usual thanks so much for keeping your support coming with likes, comments, charts, questions and etc!!
On the technical side the same levels to track:
Support: 1.50% / 1.45% / 1.32%
Resistance : 1.68% / 1.75% / 1.95%
In my books the impact of the virus is going to have a major impact on US GDP growth, tracking for 2% drag on Q1 growth. Chinese spending offshore is expected to drop by 0.6% (which is a conservative estimate). This is weighing on investor decision making as the impact will come through valuation changes rather than the earnings. If you are a believer in the virus having a short lived impact, then you can increase exposure on this dip in cyclicals and value companies. The industries hit hardest are airlines and travel with gaming to a lesser extent receiving a hit via Macao shutdowns.
All the best guys, and as usual thanks so much for keeping your support coming with likes, comments, charts, questions and etc!!
