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Bitcoin falls 3% but China shares surge on government's economic support pledge

🤖 #32: BTCUSD, Hang Seng, CSI 300, PMI, US 10yr, UK 10yr, German 10yr Bonds, MSFT, GOOGL earnings

Disclaimer: this is not investment advice. Some of the content in this email is generated with the help of artificial intelligence. For the love of all things robotic, please do your own due diligence.

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GM. It’s been a couple of weeks since I rebranded this newsletter from “Bull & Bear”, which just summarised market news, to “Wall Street Robot” which adds original and AI-driven content. Which do you prefer? Your honest feedback is greatly appreciated 👇

— Reuben

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💸 In Today’s Newsletter

1. Market Movers

Highlighting the key events that are moving markets.

China shares surge on government's economic support pledge, while Bitcoin drops 3% due to general risk-off sentiment and Binance CEO news. PMI disappoints in France, Germany, and the US, with US being the only one above 50. Government bond yields fall in response. Earnings from Unilever, LVMH, EssilorLuxottica, Microsoft, Google, Visa, GE, and Texas Instruments today.

2. Data Display

A Chart of the Day, sometimes original, mosttimes copied.

S&P 500 valuations (P/E multiples) and

3. Bitcoin Bot (Beta)

Using ChatGPT to decide whether to buy or sell bitcoin every day.

Today’s trade: Sell

Previous trades (win ✔️ or loss ❌): ❌ ✔️ ✔️ ❌ ❌

Historic win rate: 40%

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📰 Market Movers

  • China shares rally today after government officials promise to step in to support the struggling economy. The Hang Seng is up 3.5% and CSI 300 is up 2.6%. Shares in Japan and India are largely unphased with minor losses this morning.

  • Bitcoin fell over 3% yesterday; no particular news drove the price action besides general risk-off sentiment and some press regarding Binance CEO potentially wash trading in 2019. Technicals likely had a part to play; BTCUSD has been trying (and failing) to break past $30k for a few days.

  • France, Germany, and US PMI all came in lower than expected yesterday while UK reported a slightly higher PMI than expectations, but still below the 50 mark which indicates a shrinking manufacturing economy. Out of the 4 countries, US was the only one to report PMI above 50, at 52.7 which was down from last month and expectations which were 53.

  • Government bond yields fell across all four countries as a result of the low PMI prints with a US 10yr now paying 3.9%, UK 10yr 4.3% and German 10yr 2.4%.

  • Earnings today: Unilever, LVMH and EssilorLuxottica report in Europe while Microsoft, Google, Visa, General Electric and Texas Instruments report in the U.S.

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📊 Data Display

Valuations and Treasury rates typically move in tandem… until they don’t.

This graph shows the correlations between S&P 500 company valuations (as measured by P/E multiples) and inverse treasury yields. Usually, when yields go up, valuations fall. Lately, yields have been rising, but so have valuations.

Divergence in S&P 500 P/E and UST Yield

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📈 Bitcoin Bot (Beta)

Today’s trade: Sell Bitcoin at $29,124.14

For today’s short (sell) position:

  • The stop loss would be set at $29,351.20, which is approximately 0.78% above the current price.

  • The take profit would be set at $28,897.08, which is approximately 0.78% below the current price.

Rationale:

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