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The US has (probably) achieved a soft landing as the Fed hikes 0.25% for (probably) the last time this year

🤖 #34: Fed, ECB, BoJ interest rate decisions, GOOGL, META, SNAP, MSFT, Stock Index Futures, USD Index

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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💸 In Today’s Newsletter

1. Market Movers

Highlighting the key events that are moving markets.

Fed hikes rates as expected while markets await ECB decision and Euro Zone inflation poses risks. Mixed company earnings negatively impact stock market but Meta shows strong after-hours performance. Futures indicate higher stock indices and US Dollar slightly lower after the Fed hike.

2. Data Display

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

S&P 500 put pricing is unusually low.

3. Bitcoin Bot (Beta)

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

Today’s trade: Buy

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

Historic win rate: 43%

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📰 Market Movers

  • The Fed hiked rates by 0.25% as expected yesterday and said that they no longer expect a recession in the US. They provided commentary which left the door open for future hikes this year; however, most market participants believe they have reached the peak cycle. Futures only imply a 20% chance of a 25bps hike in September.

  • Markets are now focussed on the ECB interest rate decision today, where they are expected to follow in the Fed’s footsteps; however, with the additional risk that rates might stay higher for longer due to the slower retreat of inflation in the Euro Zone region. The BoJ interest rate decision on Friday is likely to keep interest rates unchanged.

  • Company earnings were mixed on Thursday, here are some of the notable swings: Google up 7% after beating expectations for both its top and bottom lines; Microsoft and Snap down 4% and 20% respectively on poor forward guidance; Boeing up 7% on strong cashflow from high jet sales; LVMH down 4% on disappointing sales; and Rolls-Royce up 19% on strong performance and improved guidance.

  • Meta is up 8% in after-hours trading after better-than-expected revenue and rosy guidance for the third quarter, given in the earnings report provided after the market closed yesterday.

  • Overall stock market indices were slightly lower on Thursday; however, futures are pricing much higher today with S&P 500 futures up 0.4%, Nasdaq 100 futures up 0.8% and EuroStoxx 50 and FTSE 100 futures up 0.2% and 0.4% respectively. The Hang Seng index is up 1% at the moment on an increase in Chinese property prices and the Nikkei 225 is also up 1% today.

  • The US Dollar is slightly lower today after the Fed hike yesterday.

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📊 Data Display

Insurance has never been this cheap.

S&P 500 put pricing has fallen below levels last seen in 2018.

Some market participants buy S&P 500 puts as “insurance” against the risk of the market value of their portfolio dropping. As stock markets have been on the rise, demand for this protection has fallen resulting in lower put premiums.

S&P 500 Put Pricing

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📈 Bitcoin Bot (Beta)

Today’s trade: Buy Bitcoin at $29,471.70.

For today’s long (buy) position:

  • The stop loss would be set at $29,303.91, which is approximately 0.57% below the current price.

  • The take profit would be set at $29,639.49, which is approximately 0.57% above the current price.

Rationale:

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