Economy

Futures Market Insight w/John Caruso – 07/16/2020

Posted 07/16/2020 1:48PM CTJohn Caruso

Chinese GDP last night showed that China has returned to growth +3.2% – The Shanghai Index however traded down a hefty -4.5% overnight. Likely consolidating recent gains – China remains bullish trend.

US and European Equities traded down overnight, perhaps tracking China. US Retail Sales and of course Initials Claims will be in focus this morning.  Yesterday we noticed the growth vs value rotation perhaps taking place in stocks. The NASDAQ traded flat to lower all day, while the Small Cap index ripped for a nearly 4% gain.  Pretty obvious what was taking place. The NASDAQ for the first time since March has begun to show some signs of intermediate term top. However, we still don’t think you play for the downside here, so long as tech is a top long in the model and we remain bullish trend. We’ve been bearish on U.S. growth, bullish on U.S. inflation and we think the markets has more than satisfied our projections up to this point, and there’s likely more to come as we move deeper into the back half of the year.

The ECB met this morning as well, here are the highlights:

Commodities are correcting mildly this morning.  Copper has shown some signs of a near-term top, but we’ll absolutely be a buyer towards the low end our target range.  Oil, not much to speak of there – dead market at the moment, chopping in a $1.00 range.

Soybeans- something potentially explosive could be happening here.  Not only does it fit within the lens of our Stagflation call, but also news yesterday of China importing a record amount of Soybeans in June.  We’re bullish grain, and yes I may have pulled the plug too soon on our Corn trade, but Corn doesn’t look nearly as ready to blow higher as the beans do.

Gold/Silver- small corrections for both this morning.  Silver likely to continue to outpace Gold in % terms going forward.

Not much else to discuss outside of that.  Be in touch.

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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