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- The US economy grew more than expected while BoJ surprises with monetary policy change
The US economy grew more than expected while BoJ surprises with monetary policy change
🤖 #35: US GDP, US unemployment, SPX, US Dollar Index, BoJ, USDJPY, ECB, Intel, Ebay
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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Happy Friday! Just a quick note to thank you for your feedback — new improvements are coming soon.
From what I’ve gathered, people aren’t really interested in the original or AI-driven content and want this newsletter to focus on providing valuable summaries of market news and events. As a result, I will probably be stopping the Bitcoin Bot to make space for some other ideas. I think the concept of using ChatGPT to trade in a systematic manner has potential, but I appreciate it doesn't add much value to the reader as it is, and there are a number of limitations around the data I am using which is impacting the performance.
I might also revert back to “Daily Bull & Bear” or another design. Stay posted.
— Reuben
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💸 In Today’s Newsletter
1. Market Movers
Highlighting the key events that are moving markets.
The US economy grows more than expected and markets fell on the surprise, while the BoJ changes its stance on monetary policy strengthening the Yen. ECB hikes 0.25% as expected and Europe enjoys a rally in equtiy markets. Tech stocks remain very volatile on earnings reports with Intel ralling 8% after-hours and Ebay falling 10% yesterday.
2. Data Display
A Chart of the Day, sometimes original, mosttimes copied.
Markets have priced the peak of the US rate cycle
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: 38%
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📰 Market Movers
US GDP came in much higher than expected yesterday at +2.4% in Q2 (expectations: 1.8%). US unemployment also remains historically low at 3.6% and weekly jobless claims came in lower than expected yesterday at 221,000 (expectations: 235,000). This data further supports the narrative of a soft landing in the US.
Nevertheless, US markets pulled back on the surprise news, with S&P 500 losing 0.64% for the day while the US 10-year treasury yield moved back above 4%. The US Dollar Index also rallied to 101.7.
BoJ maintained its ultra-low interest rate yesterday; however, they announced that they would increase their cap on purchasing 10-year government bond yields to 1% from 0.5%, which is a big change in policy and opens the path for further monetary tightening down the line.
As a result, the Yen rallied strongly against the dollar and was last trading at 139 USDJPY. Japanese stocks are around 0.50% lower this morning, as measured by the Nikkei 225 index.
The ECB followed the Fed, hiking 0.25% on Thursday as expected, and suggested they may pause hikes in September. The EuroStoxx 50 rallied over 2% yesterday.
Intel jumped 8% in after-market trading after reporting a surprise profit yesterday bringing an end to the slump in PC chip demand
Ebay fell 10% yesterday despite beating earnings on weak forward guidance.
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📊 Data Display
Current Market Pricing suggests peak rates have been reached in the US and the first Fed rate cut will come in March 2024.
US Base Rate Market Pricing
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📈 Bitcoin Bot (Beta)
Today’s trade: Sell Bitcoin at $29,188.80.
For today’s long (buy) position:
The stop loss would be set at $29,025.28, which is approximately 0.56% above the current price.
The take profit would be set at $29,352.31, which is approximately 0.56% below the current price.
Rationale:
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