Key Tactical Takeaways:
> Our highest conviction tactical trade concerns the dollar staging additional mean reversion-related gains to between 107.60 and 106.70 against the yen.
> Although technology has been the clear winner of late, we suspect that the best pace of gains for this recent bull cycle has probably passed.
> After nearly a month of consolidation, financial sector momentum is finding bullish escape velocity, making an eventual test of June's best levels more likely.
> We've added a long position in the US$ ETF (UUP) to our trade ideas list.
Some Quick Thoughts:
With President Trump’s executive actions to extend economic aid helping to boost the mood of investors, global stocks are mostly higher this morning, overcoming the negative moves taken by China in retaliation over Hong Kong this weekend. The President's signing of four executive orders to maintain some assistance, including for unemployment benefits, a temporary payroll tax deferral, eviction protection and student-loan relief comes at a time when the current valuation multiple of 22.1 on the S&P 500 (as of Friday’s close) is simply too extended.
Alternatively, money managers who cash out of equities now because they deem stocks to be too expensive might need to look for new jobs if stock prices...
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