[Market Madness] Edition 0096
Madness, Indeed
Here we go
Well folks, another mixed news day. At least the markets are reacting positively today. This week is likely to be full of hot takes, political slander, and lots and lots of money. Officially, the enhanced unemployment assistance has ended and there is no clear extension resolution that has been confirmed. The folks on Capitol Hill are still bickering over the stimulus bill and the Federal Open Market Committee (FOMC) is set to have their regularly scheduled meeting on Tuesday and into Wednesday. Stay tuned all week, and make sure you keep popcorn popped and ready to go.
Elsewhere, the major indices overseas closed in the red. Crude oil is up, gold is setting new records, and volatility has cooled off slightly.
Did you miss the last edition? No worries! Get it right here and catch up on the madness. Consider subscribing down below so you never miss another edition and read from the comfort of your inbox.
Fundamentals
Monday’s Close:
Dow Jones: +0.43%
S&P 500: +0.74%
NASDAQ: +1.67%
US 10 YR: 0.604%
Crude OIL: $41.61
Market Madness Portfolio: +1.00%
COVID 19 Global Cases: 16,340,152
Indices Overseas:
FTSE 100: -0.31%
Nikkei 225: -0.16%
Hang Seng: -0.41%
TEDRATE: 0.16
LIBOR (3 month): 0.24675%
Fed fears
Ahead of the Q2 GDP report set for July 30 at 8:30AM eastern, the Fed will meet tomorrow and Wednesday for their regularly scheduled meeting and to press forward about concerns regarding the economy and COVID 19. The conversations will likely cover topics we already are aware of but have been hoping weren’t to come true; things like jobless rate increases, business bankruptcies, and dips in consumer confidence.
While the federal government goes to session to try and create a bill that has bipartisan harmony, the Fed has continued their silent, but much needed, work of asset purchases and ensuring that markets have stable, accessible liquidity. And for many businesses thus far, it has helped. Their balance sheet continues to balloon, and will likely be this way for a long time into the future. Soon, we will be trying to decide between who has it worse — the Fed with its enormous balance sheet, or the government with their WWII-level of deficit.
The real problems are being seen in the strength of the U.S. dollar. The dollar has slipped down to lows that we haven’t seen since 2018 (see chart below for U.S. Dollar Index, DXY) In contrast, we are seeing the value of precious metals (gold and silver, among others) rise in response to the faltering dollar.
What has been and is largely still seen as the world’s reserve currency is seeing a weakening across the board.
"‘The thing that’s changed in the last few days is that it’s not just gold that has gone up against the dollar, but almost everything,’ said Kit Juckes, foreign exchange strategist at Société Générale." (excerpted from FT article)
A lot of commentary that Donnie tends to rely on is the strength of the economy (which had become untrue since the pandemic started here in the U.S.) and the strength of the dollar (which is now eroding due to the long lasting threat of COVID 19). Industry professionals and individuals are beginning to worry about their future tax bills (which further confuses the picture because of Donnie’s interest in a payroll tax cut, further indebting the government against its own obligations) and how much each trip to the store will cost them (given the potential for inflation and higher general price levels).
We’ve already seen a large rise in the prices of meat products at grocers due to the increased demand and shortened supply. Factories in production of these goods are behind because of closures and increased safety protocols due to the virus. Supplies of paper goods are coming back, but only due to the hoarding mentality that consumers had (everyone has enough paper towel and toilet paper for the next three rounds Christmas gifts to the grandkids) and the disinfecting products are beginning to make a comeback, but are still quantity-limited because people somehow still feel convinced that they need 48 512-count Lysol wipe packages to get them through the next month.
A weakening dollar doesn’t directly indicate the future likelihood of increased prices here in the U.S., but it does suggest that your dollar will go less far in other countries when you look to convert currencies. Many of the conversations surrounding federal fiscal assistance (GOVT) and federal monetary assistance (FED) still, you guessed it, revolve around money. Nearly every state in the U.S. is going to end up running a major deficit this year because of the virus and, like it or not, it is going to have to be accepted this year. There simply is no other choice as of yet. The assistance needs to be provided, and the politics put to the wayside. For now, we look to fiscal stimulus and guidance from the Fed, which will really be telling of what work still needs to be done (in their eyes) to refashion and secure the economy moving forward.
Quick Takes
U.S. National Security Advisor, Robert O’Brien, tests positive for COVID 19. (via FT)
Google extends employee work-from-home policy into Summer 2021. (via CNBC)
Under Armour and the SEC go toe to toe. (via WSJ)
Moderna begins final stage tests for COVID 19 vaccine. (via WSJ)
MLB cancels two Monday games after a positive test from a player for COVID 19. Draft Kings stock moves down. (via CNBC)
More on gold. (via FT)
Reader’s Corner
The reader may have noticed a little change in branding! I am adjusting to a more open sub-header (a financial journal above the rest) if in the event that I move away from a daily publication schedule. With work starting soon, I have to shift my priorities and maintain a balance with the things I like to do outside of work and that includes doing this newsletter. As a result, I may change my publishing schedule to something a little less rigorous, but also increase the quality and length of the publications to even out what would normally be delivered. If you have any thoughts on suggestions for me moving forward, please don’t hesitate to use that button below “send me comments/feedback!” Thank you again!
Do you like what you have read? Consider subscribing so that Market Madness is hand-delivered to your inbox each day! If you know of anyone missing out on Market Madness, save them the trouble and share it with them!
Behind the Madness
You’ve made it through the madness. I’ve worked really hard to ensure that you leave this page having learned something, and I hope that benefits you in your daily adventure. Thank you again for checking in.
Daily Reader Count: 150
Connect with Market Madness
For more Madness, check out the archive.
Some Sign-ups (that are definitely worth your time)
Atom Finance: “Atom’s platform offers an ever-growing arsenal of powerful research and portfolio monitoring tools to anyone…” Sign up for a FREE account here.
Koyfin: Financial websites have basic data and are cluttered with advertisements. Professional tools like Bloomberg are very expensive and difficult to use. Koyfin was created to provide investors with affordable and intuitive analytical tools to research stocks and understand market trends. Our mission is to empower investors with high quality data and analytics to help them make more informed investment decisions. Most of all, we are obsessed with creating a delightful user experience. Read more and join for FREE here.
AK Fallible - Financial Entertainment: AK is here to entertain, inform, and educate you about financial markets so you can make more money! Check out his YouTube page here. Also, consider his free investing tutorial.
DataHub: Check out DataHub, a free (with premium upgrade options) data hub for information across multiple industries (see their available collections here). Check them out here. Also, grab a free account here.
TOGGLE: TOGGLE puts hedge-fund grade analytics within reach of every investor. Sign up for a FREE account here. Also, grab a FREE daily briefing for some tickers here.
Robinhood Sign Up: You get a stock, and you and you and you, and me! Follow my Robinhood link (if you’ve not signed up before) and we both get a randomly picked stock! A great way to get a jump start on investing, especially if you are hesitant to invest your own money at first. Your free stock is waiting for you here.
Dirty Dozen Chart Pack (from Macro Ops): Good intelligence is vital. Great intelligence is priceless… Sign up to receive my weekly chart pack of the 12 most important and actionable charts that’ll make sure you kick your week off right. Sign up here.
Morning Brew: Become smarter in just 5 minutes. Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free. Sign up here. Grab their other, new, newsletters too: Emerging Tech Brew, Retail Brew, and Marketing Brew.
Axios News Sign Up: News worthy of your time. Get newsletters featuring news, scoops & expert analysis by award-winning Axios journalists like Mike Allen, Dan Primack and Ina Fried. View and sign up for their newsletters here.
The Hustle: Bold business and tech news. We cut through the noise with the most impactful headlines. Sign up here.
Wall Street Breakfast: Wall Street Breakfast, Seeking Alpha's flagship daily business news summary, is a one-page summary that gives you a rapid overview of the day's key financial news. Get today’s piece here.
The Water Coolest: The Water Coolest is a daily business news and professional advice email newsletter for young professionals. Biz news. Financial advice. Unfiltered commentary. One daily email. In 5 minutes or less. Sign up here.
DISCLAIMER ON SIGNUPS: I am not sponsored by any of these sites, companies, or individuals.
GENERAL DISCLAIMER: All rights reserved to respective sources where I pull my information. I do not own or have vested interests in the websites where I get my news and information. Links are provided as credit and to provide additional context where reader’s might want more information outside of what is printed here on these sheets.
