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Market Recap-Simultaneous increase of USD and Equities

Wednesday, April 24, 2019 10:07 AM GMT

It seems that markets have reached a turning point, while both the USD, oil contracts and US Equities increased significantly at the same time. SP500 has almost closed at the all-time high, while at the same time USD strengthened across all the board (despite the fact that currently markets are pricing in a January 2020 rate cut at 40.4%).

Justifying the impressive move by noting that the 1Q19 earnings of US Equities have beat expectations is not enough. One should search for answers, deeper than that. A scenario that seems valid is that November’s and December’s fall, resulted from the huge outflows from the passive US ETFs on US equities, and the following steep rally is now fueled by the same capital being invested directly at the same equities.

Today’s calendar includes the earnings of Boeing, Moody’s, Microsoft, Facebook, Visa, Tesla and Paypal. At 15.00 GMT, Bank of Canada is announcing its Monetary Policy report. No rate change is expected.

 

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