Markets:
- Gold up $271 to $4935
- WTI crude up $1.85 to $64.01
- US 10-year yields flat at 4.26%
- S&P 500 down 0.8%
- AUD leads, JPY lags
It was another day of huge market moves and volatility. It started out once again in precious metals as gold and silver bounced back in a big way. Silver was up more than 10% at the highs before paring back gains in the latter half of US trading but still finishing up near 7% at $85/oz. Gold was more stable around $4920 but the $275 gain represents that largest one-day nominal gain ever.
In North America, the bigger moves were in tech stocks and crypto. US futures had been higher but some heavy selling hit after the open in software names, megacap tech and Nvidia. What was interesting was that more than half of the constituents of the S&P 500 were higher on the day and that was really concentrated selling of the prior winners on AI worries.
Bitcoin hit the lowest since Trump’s re-election at $72,903 but managed to stage a late $3000 bounce to mitigate the damage. That rebound might portend a better attitude on risk as well. Along those same lines, Nvidia and OpenAI seem to be attempting to patch up the PR damage over the past few days as both companies walk back reports.
In FX, the Australian dollar held onto its impressive gains after a rate hike and a hawkish announcement. The RBA is clearly seeing signs of acceleration and the market likes it with AUD touching as high as 0.7050 today and finishing near 0.7020.
Despite all the turmoil, there was no bid in the yen today. A few years ago it was unthinkable that you’d have AUD/JPY as the best performing FX trade on a day with stocks down 1% but the market is looking for new places to invest, eyeing relative valuations and seeing central banks diverge. Today was a test of that theme and the market passed it.
Over in energy markets, the angst about a US-Iran war is building once again after Monday’s wipeout. Oil had been negative before the drone headlines and the market is treading it like it was Pearl Habor avoided. That’s questionable with negotiations still planned for Friday but it’s anyone’s guess where this heads.
