Economy

Economy: Look For Opportunities on the Edges

Posted 07/10/2020 8:20AM CTJohn Caruso

Asian equities chilled overnight with the Shanghai -1.90% but +14% m/m – Chinese Banks reportedly eased back on asset purchases.

U.S. Equites followed China lower overnight, the SP500 -0.62% , Dow J -0.78%, Russell 2000 -0.90%, and the NASDAQ -0.49%.  The NASDAQ begs the question whether or not it’s even an index anymore, when really only 5 stocks out of 3300 in the Composite drive the index? It’s an honest question. Either way we remain bullish of tech in Q3 2020 and bearish of US Small Caps.

Europe– Stronger industrial production out of France and Italy leant a hand to Euro stocks overnight. Europe “green” across the board.  Ger, UK, France, Italy, Swiss indices leading the way ranging from  +0.50 – 0.70% for the lot.

Oil/Energy- finally broke lower overnight, -1.54% following a negative session yesterday as well. +7M bbl build in weekly inventories but most notably the acceleration in US Covid-19 cases continue to spike and cast shadows over demand and economic recovery. As a matter of fact, the Int’l Energy Agency issued a warning pertaining to demand outlook due to Covid-19. However, we’re still buyers of Crude Oil at the low end of the range through Q3 2020 OR until further notice. We’re also going to be taking a hard look at Nat Gas on the current pull-back following the more than 40% rise off of its contract lows. Nat Gas looking as if its attempting to bottom, but remains bearish trend.

Metals- Continue to do their thing…Copper is immediate overbought but remains bullish trend. 

***UPDATE- as I type this, Gilead touts results of Remdesivir vaccine trial.  Stocks and crude oil are bouncing….

Not much else we’re seeing – still looking for our opportunities on the edges – we’ll be in touch hopefully soon.

Econ Calendar for today….June producer inflation data expected to decline, but hold flat y/y.

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John Caruso

Senior Market Strategist
Follow John on Twitter @JCarusoRJO. John began his career at Wilshire Quinn Capital, a Wealth Management Firm based out of Los Angeles, California. John made his move to the commodity industry at the end of 2005, and began his path at Lind Waldock, at the time the largest retail brokerage division worldwide. John did his undergraduate work at Robert Morris University in Pennsylvania from 1999-2003, where he was a 4 year varsity basketball letterman.  A self-professed “Macro Trader”, John uses a multi-factor fundamental and “quantamental” trading model in distinguishing market cycles based upon the accelerations or decelerations of growth and inflation metrics. His technical and quantitative approach is heavily reliant upon trend and market range analysis via a custom built standard deviation system in helping him make probability-based market decisions. John is an avid reader of all things pertaining to finance, and behavioral economics. Click here to sign-up for John Caruso's Trading Coach Insights. Daily information and insight on all futures marketsin ranging from metals to equities.
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