September 16, 2024 | Daily JAM, Long Term, Morning Briefing, NVDA, Volatility |
I think of Nvidia (NVDA) as this market’s warning indicator; it’s the canary in a coal mine; the bird that will die first if dangerous gases start to build up. So, yes, it’s important that Nvidia shares plunged from $134.91 on July 10 to $98.91 on August 7. And again from $128.83 on August 28 to $102.83 on September 6. But the shares are up again–15.83% last week–to $116.78 This canary seems to be sending a rather more complicated message than “Look I’m dead! See my feet in the air?” What’s the message, though?
August 6, 2024 | Daily JAM, Morning Briefing, Short Term |
Today, Tuesday August 6, the Nikkei 225 index closed up 10.23% in Tokyo. That erased most of Mondyay’s 12% loss. And it led to the U.S. futures market opening higher and U.S. stock indexes moving up today. At the close in New York, the Standard & Poor’s 500 was ahead by 1.03%, and the Dow Jones Industrial Average was higher by 0.76%. The NASDAQ Composite had gained 1.03% and the small cap Russell 2000 had added 1.23%.The volatility eertainly isn’t over but today the market is following the usual patterns–with buying on the drop emerging after a big sell off–and that’s a big relief after the panic-inducing movement of the last three sessions. Those on Wall Street trying to figure out where we are in the unwinding of the yen/dollar carry trade that has lent so much intensity of the drop ay that the selling of dollar assets to buy ten isn’t over. Which makes sense.
April 2, 2024 | Daily JAM |
Today’s Hot Button Moves NOW video is Buy Japanese Yen. I frankly can’r remember the last time I recommended buyinfg Yen. No one has wanted to buy the Yen for a long time, and it was the last major currency to have negative interest rates. The Bank of Japan has finally moved interest rates into positive territory. But, just barely. U.S. 10-year Treasury yields are currently at about 4.2% and the gap is about 3.5% between that and the Japanese government bond. A popular short is betting that the gap will get even wider. And the Yen is under speculative attack with market pressure to driving it down lower. But the Yen is currently too low, the Bank of Japan is starting to say ans the current price against the dollsr is around where it was the last time the Bank of Japan intervened. It’s likely we’ll hear more talk of intervention in the next three months or so and because there’s such a large short position we’re likely to see a decent pop in the Yen. To take advantage of this (potential) bounce, you can use the Invesco CurrencyShares Japanese Yen Trust ETF (FXY). Also, I would hold on to any Japanese stocks until we see that bounce. This isn’t a long term play, nor should it be a big chunk of your portfolio, but it’s a play that could see pop in the next three months.
January 4, 2023 | Daily JAM |
Late in December, the Bank of Japan announced, unexpectedly, that it was adjusting its policy for buying bonds. Even something as vague as that is enough to rattle financial markets because Japan is the world’s largest creditor. At the end of 2021, it held roughly $3.2 trillion in foreign assets, 30? more than No. 2 Germany. As of October, it owned over a trillion dollars of U.S. government debt, more than China. Japanese banks are the world’s largest cross-border lenders, with nearly $4.8 trillion in claims in other countries. The policy change was relatively minor–a decision to raise the ceiling on yields for the 10-year bond. But global bond markets have been waiting for any signs that say the days of 0% (or lower) bond yields in Japan might be coming to an end.
October 31, 2022 | Daily JAM |
It’s certainly a novel take on fighting inflation. On Thursday, the government of Japan announced $197 billion in new stimulus spending. And the Bank of Japan said it has no plans for an early increase in interest rates. The overnight interest rate at the Bank of Japan is at negative 0.1% and the bn k continues to keep the yield on the 10-year bond at 0%. This isn’t the traditional way to fight inflation, which in September ran at 3% in Japan.
October 16, 2022 | Daily JAM, Friday Trick or Trend |
The dollar broke back STRONG on Friday with, for example, the Invesco DB U.S.Dollar Index Bullish Fund ETF (UUP) gaining 0.69% on the day after dropping 0.66% during the Thursday, October 13, stock rally. Looking at the overnight markets in Asia on Sunday, October 16, it looks like U.S. traders and investors can expect more dollar strength to begin this week. And this is starting to become a big enough problem that it’s adding volatility to the financial markets in general.
July 17, 2022 | Daily JAM, Friday Trick or Trend |
The dollar is likely to get another boost from the Bank of Japan and the European Central Bank this week. On Thursday, the European Central Bank is likely to report its first interest-rate increase in more than a decade. But the increase is likely to be just 25 basis points. That will be a stark reminder of how far behind the Federal Reserve, which raised interest rates 75 basis points in June and is expected to increase rates by another 75 basis points at its July 27 meeting. On Thursday the Bank of Japan is expected to keep its benchmark interest rates at its current low, low, low level.
June 25, 2020 | Daily JAM, Stock Alerts |
A while back I sold the Invesco Currency Shares Japanese Yen ETF (FXY) out of my Perfect Five ETF Portfolio because I was looking for more diversification in that limited five ETF portfolio. (I replaced it with the iShares Large Cap China ETF (FXI) on April 20, 2020....
March 16, 2020 | Daily JAM, Perfect Five-ETFs |
The Japanese yen soared 2% Monday after the Federal Reserve announced that it would cut interest rates and add $700 billion to its balance sheet by buying Treasuries and mortgage-backed securities. The dollar is down 0.66% today against the DXY Spot Index, a basket of...
March 11, 2020 | Daily JAM, Morning Briefing, Short Term, Volatility, You Might Have Missed |
As of 1:45 p.m. in New York the Standard & Poor's 500 is down 4.62% and the Dow Jones Industrial Average is off 5.13%. The NASDAQ Composite is lower by 4.40% and the Russell 2000 small cap index, with its heavy load of smaller U.S. oil producers, has lost 5.23%....
February 4, 2019 | Daily JAM, Mid Term, Morning Briefing |
A number of Wall Street and big international banks are forecasting a drop in the dollar as a result of the Fed's decision to back off on raising interest rates in 2019. Morgan Stanley, for example, says that the dollar has peaked and has forecast the yen climbing to...
January 3, 2019 | Daily JAM, FXY, Perfect Five-ETFs, Stock Alerts |
On December 27 I switched to the Invesco Currency Shares Japanese Yen ETF (FXY) from the Vanguard FTSE Developed Markets ETF (VEA) in my Perfect 5 ETF Portfolio in an effort to get more yen exposure and a little more safety during this Bear market. Tomorrow I'm going...
