TodayFutures dropped sharply with European stocks just after 7:30 a.m. this morning leaving traders scrambling for reasons to explain the move. Out of the ones offered, none stand out as particularly noteworthy. Can we blame the
Gates’s divorce announcement? That might be a stretch. Some days, markets just move lower, and that’s all we have to say about that. Earnings continue to roll in, mostly positive.
Bond yields stubbornly remained higher at the time of writing despite stocks swiftly moving risk off this morning. Well not all markets, Russia is up over a percent but in in all our years looking at client portfolio’s I don’t think we’ve ever seen one that had heavy Russian exposure. I guess we’re just not all that connected to the Oligarchs.
Besides energy, the metals market is better bid this morning, though gold is consolidating yesterdays $23 move higher. This is the second attempt in the past month that the shiny yellow metal has tried to get above $1800/oz. It got within $8, but appears to be pulling back before it’s next push. It hasn’t traded above $1800/oz since late February. It’s a fairly significant support/resistance level.
Capital Spectator notes that
all major asset classes were positive in April. Thanks to a strong tailwind, you had to really work hard to lose money last month in conventionally managed multi-asset-class portfolios. Led by commodities, the broad commodities price boom continues to amplifies ‘supercycle’ talk. Strong demand from China, increased government spending on post-pandemic recovery programs in the west and bets on the “greening” of the world economy have lifted the price of many important raw materials.
The chip shortage continues to pop us as a discussion point in earnings calls. Infineon noted bottlenecks are hitting the auto manufacturers particularly hard, and at around 2.5 million cars won't be produced in the fist half of the year because of the shortage. The U.S. administration is adamant about pushing for on shoring semi-chip manufacturer. Just this morning TSMC now plans to build up to five more plants in Arizona than the one currently slated, at the request of the U.S., Reuters
reported.
Ben Carlson dives into the topic of
rational vs. irrational bubbles and which one we currently reside in. He also looks at valuation metrics and if those still have the credibility that they once did. He believes that the market is in a bubble and that things are expensive, but he resides in the camp that they 'should be'.
Diversion: With May the fourth upon us, make sure to ask Alexa these
Star Wars questions.