President-elect Trump elevated his tariff threats to '11' for Mexico, Canada, and Chyyynaa overnight, sending the US dollar notably higher.
Specifically, Trump said...
On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders.
Meanwhile, The trading day was also dominated by a series of terrible macro data:
Philly Fed Services puked back into contraction,
Case-Shiller home-price growth slowed dramatically (with several cities seeing prices drop MoM),
New Home Sales collapsed (likely driven by the hurricanes but still not pretty), and the
Richmond Fed Manufacturing index disappointed, stuck in contraction.
The only bright sigh was an improvement in consumer confidence post-election (Conference Board).
...interesting that US macro data has suddenly started serially disappointing right after Trump's Red Sweep (after mysteriously surging days after day for the months ahead of the election)...
Source: Bloomberg
...and on top of all that the FOMC Minutes showed a suddenly much more hawkish Fed with regards to the rate-cutting cycle but the odds of a December rate-cut are rising. Fed are due to meet on Dec 17 & 18.
Having come close to USD$100k, Bitcoin continued its descent today, testing down to a $90 k handle.
Source: Bloomberg
Meanwhile, a new record-breaking gold bar weighing an incredible 300 kgs (9600 troy ozs) has just been produced in Dubai, United Arab Emirates (UAE). At current gold prices, this 300 kg bar is valued at more than US$ 25 million.
Finally, the US equity market concentration is, umm, almost unprecedentedly high...
Source: Goldman Sachs
...probably nothing, right?
But, don't forget, Seasonality: This week kicks off a run of strong seasonal patterns for US stocks.
Source: Goldman Sachs
Since 1950, the S&P 500 has risen 80% of the time between the Tuesday before Thanksgiving to the second trading day of the New Year, with an average gain of 2.6%.
Happy Wednesday!
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Andy is the founder of ANDIKA Pty Ltd, a licensed securities & derivatives dealer. He's the author of fiction and non-fiction books and has been a University lecturer on risk and investment.
