Bullish stock markets print new record highs in the USA and Korea, led higher by strong tech earnings data.
- Generally bullish stock markets are a big story today, with both the S&P 500 Index and the NASDAQ 100 Index closing last Friday at new record high prices. During today's Asian session, the KOSPI put in a strong showing, closing on its high at a new record, while in off-hours trading the NASDAQ 100 Index is making new all-time highs. Markets are seen as led higher by strong earnings data recently reported by some of the largest tech companies. Several Asian stock markets have been performing very strongly this year, notably South Korea. For US persons who want exposure to South Korean stocks, there is an ETF (EWY) that is affordable and generally tax efficient for US persons.
- Bitcoin is back in focus as its medium-term bullish trend continues, with the price finally breaking above $80,000 and reaching a new 3-month high. This is significantly bullish. Some traders will be long here. I prefer to wait for 6-month highs, which in the case of Bitcoin right now is a lever just below $100,000 which is still quite far away. Technically, the price moved lower quickly when it was previously trading in this area, and that does encourage a view that it could now rise quickly too in the same area.
- Iran delivered a peace proposal to the USA over the weekend, which President Trump quickly rejected as "unacceptable". Shortly afterwards, Trump announced that the USA will begin providing military escorts to ships wishing to transit the blocked Strait of Hormuz and will use force if Iran takes any measures to obstruct passage. There has recently been speculation that Trump will restart kinetic attacks on Iran, and this may be a trigger which could both lower energy prices and provide an excuse for the USA to restart military action. The news has not stopped stock markets from climbing, in some cases to new record highs, while the prices of energies such as Crude Oil and Gasoline (a crude oil product) are actually trading slightly lower on the news.
- In the Forex market, the strongest major currency since the Tokyo open was the New Zealand Dollar, while the Swiss Franc has been the weakest. The USD/JPY currency pair spiked lower during the Asian session to bounce off the long-term ascending trend line for the third time in recent days. There is no evidence this was Bank of Japan intervention to prop up the Yen, although that did happen last Friday. I am not long of the USD/JPY currency pair any more, but day traders and even longer-term traders might want to try to go long if there's another bounce off this trend line - it is currently sitting at about ¥155.75.
- Gold and Silver look likely to trade lower today, especially Gold.
- In the commodities market, Corn futures reached a near 1-year high last Friday. Trend traders might be interested in going long here. If Corn futures are too big for you, there is a US ETF which is more affordable (CORN).
- It is a public holiday today in China, Japan, and the UK. As it is also a Monday with no high-impact data markets may be a little quiet, although we see quite a lot going on so that might not happen.