Markets:
- S&P 500 up 2.0%
- Russell 2000 up 3.8%
- US 10-year yields flat at 4.20%
- WTI crude up 19-cents to $63.48
- Gold up $183 to $4953
- Bitcoin up $6850 to $69,957
- AUD leads, JPY lags
What a week.
There was no whimper at the end of it either as Friday’s trading was hugely volatile but the relief that nearly all the price action was risk positive. US equities posted a huge rebound and bitcoin nearly recouped Thursday’s gigantic loss as it rose 11.5%. Gold and silver also joined in the rebound.
There wasn’t a particular catalyst, though the market did appear to like what Jensen Huang said on TV. The main driver (I think) was a re-think on software and how likely and how quickly it will be disrupted by AI. The market also seems to be able to look past megacap capex now that we’re through earnings. Amazon finished down 5.6% but that was a recovery from a more than 10% loss earlier. It also finished just above $210, which had previously been a big support level.
In FX, the Australian dollar rose for the third week in a row and rallied nearly a full figure. The fallout from this week’s rate cut is paying dividends as international investments and mining continue to shine. The market is looking for an island of stability and seems to have found it in the south pacific.
The dollar was generally lower and that aided a relief rally in the euro and sterling. The yen continued to lag though ahead of this weekend’s critical election. Watch for volatility at the open next week.
For the oil market, the Iran-US meeting seemed to leave the big issues unresolved but there appears to be a likelihood of further meetings so we punt for now. Oil didn’t selloff though, in part because of a WSJ report saying that Iran refused to give up uranium enrichment or move it out of the country.
