Short circuit

The market plumbing keeps struggling with the liberation day aftermath. Gold keeps going up almost vertically (next stop $3,500), while stock market indices keep going down, albeit not at an alarming pace. We’re on our way to test the lows of two weeks ago, and the lack of good news on the trade negotiations front is not helping. President Trump keeps pushing the Fed into cutting rates to help with market confidence, particularly when the odds of an economic recession keep climbing up. Long Bond yields are also going up while the dollar index keeps sinking, which is rare, and paints a strange picture for the overall market. The 2 year Swiss bond just turned negative, and that means investors are looking for another safe haven out of U.S. Treasuries, but the alternative is not deep enough. It also means that the return OF money is more important than the return ON money, and that’s not good. That only happens when there is stress. We’re at a point where the market is far from equilibrium and will break the regular circuits to get back to normal.

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