Stephen Innes
SPI Asset Management
Asian markets staged a dramatic comeback, erasing the ghosts of last week's selloff and riding high on a resurgence in Japanese equities. After a well-timed holiday, Japan's stocks jumped back into the fray, cheered on by a sagging yen, which was a windfall for its export giants. This dramatic rebound came after a jittery period that saw the VIX—the Wall Street fear barometer—spike to a heart-racing 65, well above its usual chill at around 19.5.
The scene was less rosy in Hong Kong and mainland China, where stocks wobbled under the weight of lingering bearish sentiment. Trading volumes in China dwindled to their sparsest in over four years.
Stateside, the S&P 500 played it cool, barely budging as it awaits the imminent US inflation data on Tuesday and Wednesday. Treasuries clung to gains from Monday, embodying cautious optimism.
Optimistically, the markets seem to be looking past any potential mini spikes in the CPI—unless, of course, the print throws a curveball far, high, and outside expectations. This scenario would challenge assumptions about the Fed's ability to pivot towards more aggressive rate cuts to ensure a soft landing.
The risk lurking in the financial landscape is that markets are overly positioned for the Fed to aggressively front-load rate cuts.
SPI Asset Management provides forex, commodities, and global indices analysis, in a timely and accurate fashion on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors.
Our publications are for general information purposes only. It is not investment advice or a solicitation to buy or sell securities.
Opinions are the authors — not necessarily SPI Asset Management its officers or directors. Leveraged trading is high risk and not suitable for all. Losses can exceed investments.
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