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Stocks staged a mild recovery on Friday, bouncing off the lows to end +0.5% on the S&P. HY forgot to squeeze and closed with spreads 10bps wider on Friday. 

Interestingly, bond yields rose 7bps even as stocks were weaker in the early going with hawks of the CBO lamenting on the prospect of the us budget deficit exceeding 1trn by 2019 deficits and reaching 2trn within a decade. 

Likely explaining the weak undertone of bond and credit markets (and of USDJPY and the Nikkei) on Friday that persisted through the day were comments from BoJ Governor H. Kuroda, the first of this kind, hinting at the possibility of starting to think of lifting the pedal off the metal on quantitative easing...sometimes in 2019. The yen surged +0.5%to 105.71 per dollar, while yields on Japanese sovereign debt climbed across the curve. The Nikkei 225 Index closed 2.5% lower on Friday. US Markets and the S&P500 futures looked supra-natural to us again on Friday.

We would not read too much into Friday’s price action which left the markets with many wounds to lick. D. Trump seems to be getting lonely at the top (with a rumor unaverred that G. Kohn, frustrated by the tariff episode, considers to resign which hopefully he does not, as it would deal another blow to markets who see G. Kohn as the guarantor that the asylum remains well guarded.  

For the week, European shares shed -3.6% and the Dax as much as -4.6% on some saber rattling on the trade war front (Germany and Europe were said to be ready to retaliate on US bourbon, jeans and Harleys). EM shed -2.8%. Gold dropped -0.5% on the week but ended on a strong and encouraging note, leaving us confident that this will be the place to be... ultimately. Oil dropped -3.6% on some deleveraging from still too large speculative longs in oil futures, in our view. Bitcoins rallied 11% on the week despite the IRS going after token holders, requesting 500,000 records earlier last week. Two things hurt sentiment last week; the more hawkish tone of Fed chair Powell as he testified to Congress and boot noises on the trade war front. The week end will likely bring a hung parliament in Italy ahead of which Italian bonds rallied on Friday as this is the norm in Italian politics and not much to fret about. 


BentinPartner Advisers, Basel There is more to our research than the Daily Close, the Confidometer and our blog posts. To receive actionable content, a comprehensive wrap up every day and our tactical FX and global models positioning or if you wish to be notified 24/7 with updates on key macro economic releases and/or technical breaches on our comprehensive investment universe covering international equities, bonds, FX, precious metals and commodities, take a free trial to the Bentin Daily, our premium research service. We help you know when to run and when to sit by tracking all developing (or well established) trends and equally importantly by flagging market breakouts. You may join our free trial by clicking here. https://www.bentinpartners.ch/subscribe We are leaving no stone unturned. Important Disclaimer © Copyright by BentinPartner llc. This blog is not intended as a recommendation, an offer or solicitation for the purchase or sale of any security or underlying asset referenced herein or investment advice. Investors should seek financial advice regarding the suitability of any investment strategy based on their objectives, financial situation, investment horizon and particular needs. This blog does not include information tailored to any particular investor. It has been prepared without any regard to the specific investment objectives, financial situation or particular needs of any person who receives this report. Accordingly, the opinions discussed in this blog may not be suitable for all investors. You should not consider any of the content in this report as legal, tax or financial advice. The data and analysis contained herein are provided "as is" and without warranty of any kind. BentinPartner llc, its employees, or any third party shall not have any liability for any loss sustained by anyone who has relied on the information contained in any publication published by BentinPartner llc. The content and views expressed in this report represents the opinions of Marc Bentin and should not be construed as guarantee of performance with respect to any referenced sector. We remind you that past performance is not necessarily indicative of future results. Although BentinPartner llc believes the information and content included in this report have been obtained from sources considered reliable, no representation or warranty, express or implied, is provided in relation to the accuracy, completeness or reliability of such information. This blog is also not intended to be a complete statement or summary of the industries, markets or developments referred to in the blog.   


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