Economy

Futures Market Insight w/John Caruso – 07/13/2020

Posted 07/13/2020 10:13AM CTJohn Caruso

Bull and Bear Market

Global Indices are about as “green” as it gets this morning….the US, Europe, and Asia all charging higher into Monday morning. We’re headed into the gauntlet of earnings season this week and we’re going to get a better look as to just how bad corporate cashflows and EPS likely were in Q220. My weekend reading also reminded me that US Corporations issued over $800B in new debt in Q2 2020 – trying to solve a leverage problem with more leverage? Blame the Fed, as increased liquidity not only enables the problem, but exacerbates it. Also, evidence of Corporate buybacks stalling out.

Covid-19 continued its acceleration over the weekend, with the WHO reporting 230K new cases and a record of 70K new cases in a single day here in the US.  Florida reported 15K new cases alone.

Dollar devalued by another 0.14% overnight, while gold and silver prices continue their upward march. Emerging market equities (EM performs well in a falling Dollar environment) are up 15% since the Dollar broke bad in May.

Oil -1.24% off news out of OPEC suggesting supply will likely INCREASE at months end.  OPEC initiated record production cuts in May, that were extended thru July of 9.7M bbls.  This is likely set to fall to 7.7M bbls by Aug. Truthfully, this is nothing new, this has been the plan all along. Side note: I’m getting interested in nat gas on the long side.

Volatility (VIX) – a bull market advance in the S&P 500 as never been able to sustain itself with the VIX north of 20. But of course, “maybe its different” this time. Volatility is a big part of what we do.  You must know the overall direction (trend) of an assets volatility component ( and not just the SP500) in order to get the “big stuff” right. We measure volatility not only in stocks, but Gold, Oil, and Treasuries. Anyhow, VIX north of 25.00 suggests we’re not out of the woods in terms of volatility in equities.

There’s a few markets moving to the edges this morning that we’re interested in….we’ll keep you updated throughout the session. Hint: Ags, Energy, and Stocks.

Feel free to reach out to John Caruso at jcaruso@rjofutures.com or 1-800-669-5354 if you’d like to get a 2 month free trial of our proprietary trade recommendations by email. 

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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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