D&D Note (7.24.2020) ~ Rising Tensions Between China & U.S. Sends Markets Lower And Gold to $1900 ~
The continued rising tensions between China and the U.S. put downward pressure on the markets today after China retaliates and closes the U.S. consulate in Chengdu.
Equity markets gapped down on the open and remained in the red throughout the session.
Gold continues on a tear as negative real rates and a weakening dollar propels the price of the metal higher and almost near all time highs closing today at $1900 an ounce.
Details on the GOP version of the relief bill is due Monday and then negotiations with Democrats can begin.
Intel got slammed after earnings on announcing a chip delay to which both TSM and AMD gained on the news. This also shows why Apple made the right decision to start creating their own chips.
Barclays downgraded Intel to underweight with a price target of $48 a share.
Intel down -15.62%
AMD up 16.24%
TSM up 9.97%
D&D’s overweight position in TSM plus our EM position in UNLRY (up 9.72%) allowed us to beat the markets today with our portfolio gaining 1.34%.
The ratio of companies seeing insider buying compared to selling came in at 0.27 in July which is the lowest level since 2000. Meaning Executives at companies are selling their own companies stock.
Companies seeing some of the largest selling include: Morgan Stanley, BlackRock, UnitedHealth, and J.B. Hunt Transport.
The overall theme of the insider action is Financials are still being bought while Tech is getting sold. Which makes sense as many banks are trading less than tangible book and have not seen a solid recovery in stock appreciation compared to Tech hitting all time highs and having frothy valuations.
The VIX was at elevated levels all day and flipped only into the red at the end of todays cash trading closing below 26.
DOW down -0.68%
S&P 500 down -0.62% (3215.63)
NASDAQ down -0.94%
VIX down -0.92% to 25.84
Oil up 0.66% to $41.34 a barrel.
Gold up 0.54% to $1900.30 an ounce.
Florida reports record hospitalization rate due to Covid-19.
California sets new record for daily deaths at 159 and also sees hospitalization rates rising.
The Latino community is now becoming the most effected by the recent rise in coronavirus cases as they are majority on the front lines of essential businesses. This demographic rise is reflected in the new cases in San Jose, L.A., and San Diego.
Dr. Fauci says a vaccine won’t be ‘widely’ available until several months into 2021. As while we might get a vaccine cleared say in January it will take months to logistically distribute the vaccine to people.
Global Virus cases: 15,649,261+
Global Virus deaths: 636,752+
U.S. Virus cases: 4,097,270+
U.S. Virus deaths: 145,184+
~ Dave James / Principal Trader and Market Strategist