Monday 26 April 2021

Week to Apr 23rd

Earnings season falters slightly, Surprise BoC QE cut and hike hint, Biden CGT hike shocks traders


This week saw an early two-day 1.2% pullback on the continuing rise in COVID-19 in emerging market countries, particularly India, and overall global deaths reaching the psychological 3M level. US companies are active everywhere in the world, and so vaccine and re-opening progress at home is not the whole story. For many companies, recovery and consequent fiscal tightening at home, coupled with depressed international markets is a lose-lose situation. India, a country with four times the population of the US is particularly hard hit with a third wave.

News of the Biden capital gains tax hikes on Thursday, which will particularly hit the trading community, caused an instant 1% drop in US equities. NFLX failed to meet subscriber estimates and fell 7.5%. Nevertheless, and even despite a slight uptick in volume, the week was generally a V-shaped consolidation, even briefly eking out a new SPX intraday high on Friday. FTSE, DJIA and yields posted inside weeks, and most other instruments ended with extremely small candle bodies.

Next week sees an important Fed meeting, with a strong vaccine rollout, and re-openings continuing, with there be any hint of QE taper, or even more extreme, a rate hike. Also we see companies comprising over 40% of NDX reporting, which could have a noticeable effect on the DJI/NDX ratio. These two factor will undoubtedly overshadow most other data, except perhaps PCE, the Fed’s preferred method of inflation measurement.

Given that there is a slight risk of a hike, the ‘dovish message’ bar is set fairly low this month, and traditionally, there is one more week before the traditional seasonal selloff.

Mon Apr 19

The coronavirus death toll passed a symbolic three million at weekend, and markets fell today, with NDX underperforming. The SPX drop of 0.53% was the worst for a month, and NDX fell 0.96%. As developing nations suffer a larger third wave, international company sales suffer, whereas fiscal policy is led by the US recovery. The dollar also fell to a six-week low. Surprisingly Gold also fell, and Oil rose slightly.

Tue Apr 20

Market did their second red day in a row for the first time since late March today, after only mild beats on major earnings and a downbeat ECB Bank Lending survey. A textbook risk-off day, with NDX underperforming and Gold, bonds and the safe-haven dollar up, and Oil down. The theme was continued after the bell with NFLX falling 7% on lacklustre new subscriber numbers.

Wednesday April 21

After a two-day 1.2% pullback, market snapped back today with RUT leading the way, up 2%. NDX underperformed, and Gold rose 1% and Oil dropped again, so it was only a reaction to the earlier part of the week, rather than a change in mood. The dollar would have risen except for a 1.46% appreciation in an hour in CAD, after the BoC announced something unheard of at the moment, a reduction in QE (although this was only correcting a large drop on Tuesday). Bond yields were flat on the day.

Thursday April 22

As markets were starting to recover, the news of President Biden’s potential doubling of capital gains tax to 40% for millionaires hit the mood of traders (the ones who would pay it) hard. SPX dropped 1% instantly and stayed down until the close. The news came after Europe closed, leaving DAX and FTSE green. The safe-haven dollar rose, and this time Gold fell and Oil rose, following the dollar. Bonds were once again flat.

Friday April 23

Today, markets realised that values are not linked to traders’ tax bills. The 1% drop was recovered in the morning session, and SPX briefly touched a new high of 4196.20. NDX outperformed. USD reversed back down as did Gold and Bonds. Oil was up, so all in line, just like Tuesday in reverse.


Markets down this week, with NKY showing the biggest loss. The top mover was EURAUD up 0.98%. BTC fell sharply by $10,000 although ETC did not. FANGS were flat, pre-earnings, except of course NFLX.

My strategy of reversing the most extreme pair worked for a third week, but only by a lousy 0.01%, taking the total to -0.79%, 11/15 wins. I will try the same pair for another week, selling AUDUSD.

Note we use Google Finance data for daily movements, listing UUP as a proxy for DXY. All references to ‘the dollar’ are based on DXY. The equity and index prices are now based on the cash close each day.

NEXT WEEK (all times are GMT)

(Calendar High volatility items are in bold)

  • Key NDX earnings week
  • FOMC Rate Set meeting
  • Rate decisions in Japan and Sweden
  • End of month before May

Monday April 26

The final week before ‘Sell in May’ starts, so watch out all week for front-running given that SPX is at all time highs. Not much during the daytime, but cult stock TSLA (4.35% of NDX) reports after the bell. Markets are closed in Australia for ANZAC day observed.

05:00 Japan Leading Economic Index(Feb)

08:00 German IFO Business Sentiment

12:00 ECB Panetta speech

12:30 US Durable/ND Capital Goods (Durable e2.5% p-1.2%)

13:00 ECB Lane speech

Tuesday April 27

Key earnings today after the bell are NDX giants MSFT and GOOGL (together 13.64% of NDX). As well as Japan, there are rate decisions in Sweden and Hungary today. SEK is  4.2% of the DXY basket. Markets are closed in South Africa and The Netherlands.

05:00 BoJ Rate Decision/Statement (e-0.1% p-0.1%)

08:00 BoJ Press Conference

15:00 US Housing/Home Price Indices

16:00 US Consumer Confidence(Apr)

22:00 BoC Macklem speech

23:50 Japan Retail Sales

Wednesday April 28

Today is FOMC day, and for the first time in months, a hold is not 100% priced in, there is a 2.8% chance of a hike, according to the CME FedWatch tool. Traders will be looking for any hint of QE taper, now the vaccine program is well established. The largest company in the world AAPL reports after the bell, along with FB make up 14.9% of NDX. So a big day, near the end.

01:30 Australia CPI (RBA Trimmed Mean QoQ e0.5% p0.4%)

06:00 Germany Gfk Consumer Confidence Survey(May)

10:00 OPEC Meeting

12:30 Canada Retail Sales (e-3%, p-1.1%)

14:00 ECB President Lagarde speech

18:00 Fed Rate Decision/Statement (e0.25% hold)

18:30 FOMC Press Conference

Thursday April 29

A lot of data, but most of it low-level. Markets are more likely to be influenced by the Fed and AAPL. Today it is the turn of AMZN (8.47% of NDX) to report after the bell. There is a rate decision in Egypt. Markets are closed in Japan for Showa Day.

07:30 ECB De Guindos speech

07:55 Germany UnEmp Rate/Change

08:00 Eurozone Economic Bulletin

09:00 Eurozone Consumer Confidence/Business Climate

11:30 ECB Weidmann speech

12:00 Germany CPI (e2% p2%)

12:30 US PCE QoQ

12:30 US Jobless Claims

12:30 US Q1 GDP Prelim (e6.5% p4.3%)

14:00 US Pending Home Sales (MoM)(Mar)

18:00 Fed Williams speech

23:30 Tokyo CPI

23:30 Japan Jobs to Applicants/Unemployment

23:50 Japan Industrial Production

Friday April 30

Oil earnings today, with the two halves of Rockefeller’s empire CVX and XOM reporting, along with PSX. XOM left the Dow last year, despite once being the biggest company in the world. There may be end of month volatility, including front running a May sell-off. There is a rate decision in Colombia. Markets are closed in Greece and Romania for Orthodox Good Friday, and Denmark.

01:00 China NBS PMIs (Mfr e51.4 p51.9)

06:00 Germany Q1 GDP Prelim (p0.3%)

09:00 Eurozone CPI (Core e0.9% p0.9%)

09:00 Eurozone Q1 GDP (QoQ e-0.8%  p-0.7%)

09:00 Eurozone Unemployment Rate(Mar)

12:30 US PCE MoM/YoY

12:30 US GDP MoM

13:45 Chicago PMI

14:00 Michigan CSI

Sunday 18 April 2021

Week to Apr 16th

Strong earnings and macro beats, New equity ATHs, bonds/Gold up

A strong opening to earnings season, and equally strong macro data meant we saw indices once again rose making new all-time highs, including NDX breaching 14,000 for the first time. 4-week jobless claims were the lowest since the pandemic started. All sectors moved together, the tech outperformance this week was only marginal. Despite rising currencies, DAX and FTSE performed well, the former making another all-time high and the latter crossing 7,000, finally above its Feb 20 high. However, volumes have been declining in this rally since March, and trend, although clear, was only modest, and notably FANG underperformed NDX, which it self made no appreciable gain against SPX. The rally looks fragile.

The dollar declined for a second week, pushing up all currencies and Gold. The inflation print beat, causing a move into bonds, but unlike Retail Sales was not a blowout (CPI Core 1.6% vs 1.5% est) and crucially still below the Fed target, meaning equities were not affected (by a fear of early taper).

In equities, next week is dominated by earnings, with bellwether IBM, FANG giant NFLX, and Dow heavyweights JNJ, PG, AXP and TRV. On the currency front, we have the BoC facing a loonie at three-year USD highs, and  more importantly, the ECB in their eternal quest to stimulate inflation without appearing hawkish. There are, however, no significant US macro prints until Thursday.

Mon Apr 12

SPX was flat today, and DJI and NDX pulled back very slightly, as markets stabilised the large run-up on Friday afternoon. The dollar continued its decline, although not against. Unusually therefore, Gold was slightly down, and Oil was slightly up. Bonds were flat on the day.

Tuesday April 13

Markets keep going up, but the COVID situation seems to determine which sector. Today’s concern that the JNJ vaccine (the stock gapped down 2.93%, MRNA gapped up 5.29%) caused blood clots meant NDX added 1.21% and DJI fell slightly. The dollar fell more sharply today, and bonds and Gold were up both on the underlying COVID risk-off and the dollar. Oil was up slightly.

Wednesday April 14

Today saw earnings blowouts from JPM and GS (both DJIA components) pushing DJIA into positive territory while NDX fell 1.31%. Bonds were down in line, part of a slower trend of yields rising in expectation of inflation. A third down day for the dollar, but Gold fell as well, follow equities for a change. Oil was up, also in line with equities.

Thursday April 15

A second day of positive earnings, and strong beats in Retail Sales and Jobless Claims sent markets even higher, SPX was up 1.11% and NDX 1.61%. The macro prints also arrested the dollar decline which had a flat day, allowing Gold to rise. Oil was up in line, and once again so were bonds, yields reacting to the falling dollar rather than equities.

Friday April 16

A fifth day and no change in trend. FTSE crossed 7,000 and also made a new all-time high, the first since Feb 2020. Other indices made all-time highs as they had been doing all week. The dollar carried on down again, pushing Gold up and Bonds down. Oil slipped slightly. The week had a clear pattern, stocks, gold, bonds and Oil up, dollar down.


The moves were up but slight, with all indices making similar gain, FTSE doing best up 1.50%. The top forex mover was AUDUSD up 1.51%. Another week of flat Bitcoin and ramping Ethereum. FANGs, for once, underperformed NDX as a whole.

My strategy of reversing the most extreme pair worked for a second week, EURGBP fell by 0.23%, taking the total to -0.80%, 10/14 wins. I will try it again for a third week, selling AUDUSD.

Note we use Google Finance data for daily movements, listing UUP as a proxy for DXY. All references to ‘the dollar’ are based on DXY. The equity and index prices are now based on the cash close each day.

NEXT WEEK (all times are GMT)

(Calendar High volatility items are in bold)

  • Earnings season continues
  • ECB Rate Decision
  • BoC Inflation and Rate Decision
  • No US macro news until Thursday

Monday April 19

Earnings today include Dow staple KO before the bell, and bellwether IBM after the close. As is often the case on Mondays, there is no significant European or US macro data.

23:50 Japan Imports/Exports/TB (Sun)

04:30 Japan Industrial Production

Tuesday April 20

If we add in the previous nights IBM to Dow components JNJ, PG and TRV reporting before the bell, we have a total of 11.33% of DJIA reporting between sessions. Each 1% move in these stocks is 39 points in the index. In addition NFLX report after the bell. In previous earnings, the market sold off if subscriptions were not up to estimates, even if EPS and Revenue beat.

01:30 PBoC Rate Decision/Statement (e3.85% hold)

01:30 RBA Meeting Minutes

06:00 UK Claimant Count/AHE/UnEmp (UE e 5.2% p5.0%)

08:00 ECB Bank Lending Survey

Wednesday April 21

Todays focus is on Canada with inflation and a rate decision. With CAD at three-year highs, any surprises could have a strong effect. There are no significant earnings releases. 

00:30 Aus Westpac Leading Index

01:30 Aus Retail Sales prelim SA (MoM e0.8% p-0.8%)

06:00 UK CPI/RPI/PPI (CPI YoY e0.7% p0.4%)

08:05 BoE Ramsden speech

10:00 DE10Y Bond Auction (time approx.)

10:30 BoE Governor Bailey speech

12:30 BoC CPI (Core YoY p1.2%)

14:00 BoC Rate Decision/Statement

15:15 BoC Press Conference

Thursday April 22

The main news of the day is the ECB rate decision, or more specifically, have eschewed negative rates in the past, any alterations to loosening policy. The first two US significant macro prints of the week are at 1230. NDX giant INTC reports after the bell.

01:30 Aus NAB Business Confidence

11:45 ECB Rate Decision/Statement (e0% hold)

12:30 US Jobless Claims

12:30 Chicago Fed National Activity Index

12:30 ECB Pres Lagarde Presser

14:00 Eurozone Consumer Confidence

23:00 Aus Commonwealth Bank PMIs

23:30 Japan National CPI

Friday April 23

The week closes with a raft of PMIs. DJIA component AXP reports before the bell.

06:00 UK Retail Sales

07:30 Germany Markit PMIs (Mfr e65.9 p66.6)

08:00 Eurozone Markit PMIs (Comp e52.8 p53.2)

08:30 UK Markit PMIs (Services p56.3)

13:45 US Markit PMIs

14:00 US New Home Sales (MoM)(Mar)

Monday 12 April 2021

Week to Apr 9th

ISM Services PMI beat, Further all time highs, Dovish Fed

A strong US Services PMI beat started another positive week as stocks drifted up, helped by dovish FOMC minutes. It was moderate but solid risk-on, with NDX outperforming and DXY declining smoothly all week, helping Gold. SPX and DJI, unlike RUT and NDX posted new all-time highs, as did DAX and the MCSI World Index. Yields ranged finishing down but in last week’s range, as did Oil.

Next week is the start of earnings season, with JPM, C and GS leading the way as always. In practice surprises are unlikely, but with markets at elevated levels, the risks are to the downside. Before earnings comes US inflation on Tuesday. The estimate is up on the last month, and a beat could cause taper concerns.

Mon Apr 5

Friday’s rally continued with even further vigor today helped by the ISM Services PMI beat. SPX was up 1.44% and NDX even further. Europe was closed but DAX futures hit an all-time high The safe haven dollar was down. Yields were slightly down, and surprisingly so was Oil. Gold was flat on the day.

Tuesday April 6

US market were slightly off today, rotating into Europe to post an ATH for SX5E, the first since the pre-pandemic high over a year ago. Of the major indices, only FTSE is still below the Feb 2020 level. The dollar fell again, pushing Gold up. Bonds were also up, and Oil recovered somewhat.

Wednesday April 7

A flat day throughout asset class land, with equities, gold, oil and the dollar, although both all showed a slight blip upwards after the dovish FOMC minutes. FTSE advanced on a weaker dollar, but both DAX and SX5E retreated.

Thursday April 8

The Fed message had more effect today, with another rally across the board. DAX and now the MCSI World Index posted all-time highs. The dollar duly fell pushing Gold up again, and yields down. Oil was flat on the day.

Friday April 9

In a move similar to the previous Friday, markets rallied hard into the close, with for once, DJIA outperforming NDX, after four days of tech outperformance, and posting a new ATH, as did the MSCI World. The dollar reversed up after declining all week. Gold, bonds and Oil were all down.


A week of rotation back into NDX made it the top index, up 3.87%. The top forex pair was EURGBP up 1.95%. Cryptos were fairly flat (by their standards, ie under 5%), and FANG again outperformed NDX as a whole.

My strategy of the most extreme pair last week worked, but hardly at all, up 0.03%, taking the total to -1.03% 9/13 wins. I will try it again and sell EURGBP hoping for a reversion to mean.

Note we use Google Finance data for daily movements, listing UUP as a proxy for DXY. All references to ‘the dollar’ are based on DXY. The equity and index prices are now based on the cash close each day.

NEXT WEEK (all times are GMT)

(Calendar High volatility items are in bold)

  • Q1 Earnings season opens
  • US inflation expected to rise
  • Early Chinese GDP
  • US Retail Sales, German inflation

Monday April 12

As is often the case, a quiet Monday with no US releases.

09:00 Eurozone Retail Sales (YoY e-5.7% p-6.4%)

14:30 BoC Business Outlook Survey

17:00 Fed Rosengren speech

18:00 US Monthly Budget Statement(Mar)

Tuesday April 13

The US inflation reports dominates today, too high and it might worry traders that the Fed may tighten policy.

02:00 China Imports/Exports/TB

06:00 UK Mfr/Ind Production

06:00 UK GDP

08:00 UK NIESR GDP Estimate (time approx.)

09:00 Eurozone ZEW Economic Sentiment

09:00 Germany ZEW Economic Sentiment

10:30 DE10Y Bond Auction (time approx.)

12:30 US CPI (YoY e1.6% p1.3%)

Wednesday April 14

Earnings season opens today, as usual with JPM first out of the gate. WFC and GS also report today. Markets are closed in India.

00:30 Aus Westpac Consumer Confidence(Apr)

01:00 RBNZ Rate Decision/Statement (e0.25% hold)

09:00 Eurozone Industrial Production s.a. (MoM)(Feb)

18:00 Fed Beige Book

18:30 Fed Williams speech

Thursday April 15

The second day of earnings season has BAC, C and top Dow component UNH (7.32%). Today would normally be US Tax Day, but this year the filing deadline has been extended to May 17. There are rate decisions in S.Korea and Turkey.

01:00 Aus Consumer Inflation Expectations(Apr)

01:30 Aus NFP/UnEmp (NFP e35k p88.7k)

06:00 Germany CPI (e2% p2%)

12:30 US Retail Sales (Control Group e-0.9% p-3.5%)

12:30 Philly Fed Mfr Survey(Apr)

12:30 US Jobless Claims(Apr 9)

Friday April 16

There are Eurogroup and EcoFin meetings all day today.

02:00 China Q1 GDP (YoY e18.6% p6.5%) 

02:00 China Retail Sales/Industrial Production

09:00 Eurozone CPI

12:30 US Building Permits/Housing Starts

14:00 Michigan CSI (e88.9 p84.9)

Sunday 4 April 2021

Week to Apr 2nd

Four day Easter week, SPX breaks 4,000, Blowout NFP on Good Friday

In a shortened Easter week, the S&P500 and DJI closed the month of March and the first quarter near all-time highs, setting up continuation in April, the most bullish month of all for the S&P500 which duly ramped through 4000 on the first of the month. Yields continued higher with the 10Y making a new high of 1.77% proving yet again that a yield rally under the right conditions is bullish for the stock markets. Even the weakened Nasdaq and high growth names put in a strong reversal higher with Tesla making a 17% gain in 3 sessions.  

It was a slow news week, with the highlight, NFP, coming after the markets closed for the Easter break. An inflation beat in the Eurozone did little to lift the Euro which slid to 1.17 against the USD. The OPEC+ meeting finally saw the group decide to curb cuts, but only gradually with 350k bbd coming back on line in May. Oil stayed steady all week even with President Biden’s $2.3trn infrastructure plan focusing on clean energy and electric vehicles.  

Next week sees President Biden’s infrastructure bill go to Congress. This bill could add up to 1% to the current 5.2% GDP estimate, and the benefits would largely flow to industrials, possibly increasing the rotation out of tech we have seen recently.

However, the bill also includes the restoration of the 28% corporation tax rate, reversing Trump’s 7% cut in 2017. This translates to an approximate 7.4% hit on SPX earnings (a 280 point drop), but have less effect on tech. Note that corporate earnings are expected to increase by 24.2% from their position a year ago. Remember EMH would suggest all this is priced in. SPX is currently 19% ahead of its pre-pandemic high in Feb 2020. NDX is 38.3% higher.

Note of course that although Congress is all blue, it would only take one Democrat to stall the tax hikes in the Senate. The degree of debate may of course take us into the following week’s earnings season opening, which then adds an additional dimension to what is priced in.

Also this week we get the minutes from the Fed’s Mar 17 meeting and the seven-day Spring Meeting of the IMF and World Bank all week at which Chair Powell speaks on Thursday. Scheduled releases are thin, with only the RBA rate decision and Canadian NFP of note.

Mon Mar 29

Indices were flat today overall, however some bank shares took a hit on the failure of Archegos Capital, a hedge fund. Credit Suisse and Nomura were hit worst. The dollar continued to rise in line, pushing gold down and yields rose. Oil was slightly up.

Tuesday March 30

Stocks fell today, with NDX hit worst as the rotation into post-pandemic stocks started again. European indices rose, partly due to weak currencies again a strong dollar (DXY +0.45%), and a rise in German inflation from 1.6% to 2%. Gold fell even more (GLD -1.71%) in line with the dollar, and Oil reversed. Bonds were flat on the day.

Wednesday March 31

A summary of the $2trn Biden plan was released today, which includes huge spending and also tax hikes. Whether it will be passed is another matter. Most sectors were flat or down, but tech shares (more immune to tax hikes) rose, reversing yesterday’s rotation. A lot of the move was in the afternoon, suggesting end of month positioning may also have been an effect. USD took a breather and pulled back (with Gold up). Oil which follows industrials was down. Yields were slightly down.

Thursday April 1

The new month and quarter opened with a further rally, with NDX outperforming, and SPX closing above the psychological 4,000 mark for the first time. It took 14 years for the doubling from 1,000 to 2,000, yet only six and a half from that point to 4,000.

The dollars was down and yields continued to fall in line producing an inverted-V week for both instruments. Gold was down in line. Oil was up to close the short week more or less flat.

Friday April 2

On Good Friday markets are closed almost everywhere, the exception being futures, forex and Japan. The blowout NFP (916k vs 647k) led to a rise in US and European futures indices, particular into the close. USD advanced notably as well. Gold, Oil and bonds were not traded.

A positive week for most indices with NDX the leader. GBPJPY was the top forex mover up 1.29%. Bitcoin was up, but ETC advanced much further, making an all-time high. FANGS were very strong, outperforming NDX.

I made 0.71% selling EURNZD, total to date -1.06% 8/12 wins. Let’s try the reversal of the biggest mover again and sell GBPJPY.

Note we use Google Finance data for daily movements, listing UUP as a proxy for DXY. All references to ‘the dollar’ are based on DXY. The equity and index prices are now based on the cash close each day.

NEXT WEEK (all times are GMT)

(Calendar High volatility items are in bold)

  • Biden Infrastructure & Tax Bill
  • IMF/World Bank meeting
  • FOMC Minutes
  • RBA rate decision

Monday April 5

Today is Easter Monday and Ching Ming in Hong Kong. Almost everywhere except China, Japan and the Americas are closed. Expect light forex (London), but a possibly more volatile US. There is a rate decision in Chile.

01:00 Aus TD Securities Inflation

13:45 US Markit Svcs/Comp PMI

14:00 US ISM Svcs PMI (Mar) (e57.5 p55.3)

Tuesday April 6

Hong Kong is closed for a second day. The main news is the Australian rate decision.

01:45 Caixin Svcs PMI(Mar)

04:30 RBA Rate Decision/Statement (e0.1% hold)

09:00 Eurozone UnEmp Rate

22:00 Aus Commonwealth Bank Svcs PMI(Mar)

Wednesday April 7

Some attention will be paid today to the minutes from the Mar 17 Fed meeting, but otherwise only low-level data. There are rate decisions in India and Poland.

05:00 Japan Leading Economic Index

07:55 Germany Markit Comp PMI

08:00 Eurozone Markit Comp PMI

12:30 US Trade Balance

12:30 Canada Trade Balance

14:00 Canada Ivey PMI

18:00 US FOMC Minutes

23:50 Japan Current Account

Thursday April 8

In another light news day, Fed Chair Powell speaks online today at 1600 at the IMF Debate on the Global Economy.

06:00 Germany Factory Orders

11:30 ECB MPC Minutes

12:30 US Jobless Claims

16:00 Fed Chair Powell speech

Friday April 9

The week ends with the Canadian NFP, a week after the US. The IMF meeting continues into the weekend. There is a rate decision in Romania.

01:30 China CPI (e-0.4% p-0.2%)

06:00 Germany Trade Balance/Ind Production

12:30 US PPI

12:30 Canada NFP/AHE/UnEmp (NFP e75k p259.2k)