Fire & Fury Send Markets Into A Tizzy
Mati Greenspan | Aug 09, 2017 06:16AM ET
Global stock markets are in a bit of a tizzy this morning. The recent escalations between the USA and DPRK seem to be a bit more than your average sticks and stones name calling between international leaders.
Though the stocks have been largely able to ignore this issue as remote for the past few years it does seem that a bit of reality is interrupting the day to day euphoric stock buying cycle. By no means are we in a bear market. The stocks are doing exceptionally well in so far in August.
However, there are some telltale signs of fear creeping into the global financial picture. Let's take a look...
Please note that by popular demand, political opinions will be kept out of today's update. The pissing match between Donald Trump and Kim Jong Un is not the issue being discussed.
Today's Highlights
- Missiles at Guam
- Volatility Up
- Gold up
- Crude Oil Today
- RBNZ Tonight
- US Inflation on Friday
- Awesome Ethereum
Please note: All data, figures & graphs are valid as of August 9th. All trading carries risk. Only risk capital you can afford to lose.
First, let's start with the obvious.
Volatility is up.
The VIX, volatility index spiked yesterday to it's highest level this month and closed above 11 points. Not a historical high or anything, just a break from the lower volatitliy theme that's been prevalent lately.
Stocks are not
The Dow Jones has been on a serious winning streak lately. The past 10 sessions have all ended in green taking us ever deeper into record high territory. Just the fact that it ended the day with a negative number yesterday is notable even if that number was just 0.15%.
The declines in Asia today are a lot less tame. With North Korea being closer to home, the Nikkei 225 in Japan is down 1.29% today and the China 50 is down 0.56% so far today, not bad for a country that doesn't allow short selling.
Gold is up today as well. So far gaining more than half a percent today. A clear indication that at least somebody is getting nervous. But the main place that we can see the fear playing out is in the...
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Currency Markets
Here, take a look...
Usually, the Australian Dollar has a strong correlation with the commodity markets since most of their exports are commodities. So seeing it this far down on a day when the commodities are up is more than a bit odd.
The Japanese Yen gaining more than a half a percent since the beginning of the day tells us that Asian investors are indeed nervous.
The kicker of course is the Swiss Franc. An upward movement of nearly 1% tells us that something is definitely wrong.
For those of you looking for extreme volatility, take a look at the AUDCHF, which is looking at its biggest single day movement since Trump's election (white circle).
Crypto Doesn't Care
...or maybe it does.
The total market cap of all cryptocurrencies is at a record high of $123 Billion this morning.
As we can see, the South Korean exchange bithumb is responsible for more than 17% of today's volume, more than both of the next two exchanges combined.
The real winner today is ethereum, which is up above $300 again making for a 10% gain in the last 24 hours and 50% since the start of the month.
Wishing you an amazing day ahead!!
@MatiGreenspan
eToro, Senior Market Analyst
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