Market Analysis by covering: Gold Spot US Dollar, S&P 500, US Dollar Index Futures. Read 's Market Analysis on Investing.com
Analyst trims S&P target, says stocks now pricing in bigger risk from war than oilprices have fallen by over 10% since the US and Israel started bombing Iran on February 28th. Many investors think that gold is a safe haven that should do its best during crisis periods, as we are in.
This assumption fails to consider the biggest driver of all asset prices, liquidity.For instance, the euro is down about 7% versus the dollar since the conflict started. Thus, the price of gold is 7% higher for Europeans than it otherwise would have been. This causes demand for gold to decline, while the need to sell gold for liquidity purposes rises. Alongside the dollar appreciation, Treasury yields have been rising. With long-term bond yields now approaching 5%, the opportunity cost of holding gold, which earns 0%, becomes higher. While we wait on official data, we suspect that foreign buying of UST bonds has been brisk. Higher yields and a stronger dollar create a feedback loop that results in further dollar appreciation and lower gold prices. As a result, gold is trading like stocks and not the safe haven many expect it to be.As was the trend prior to the Iranian conflict, value has reasserted itself as the preferred sectors and factors for investors. Growth stocks, especially mega-cap growth and the Magnificent Seven, were among the worst performers last week. The graphic below shows that high-dividend-yield and large-cap value stocks are the most overbought relative to other sectors. However, they are decently oversold on an absolute basis. Mega Cap Growth and Disruptive Tech are very oversold on a relative and absolute basis. Note that a large majority of the factors are overbought relative to the market, meaning many stocks are outperforming the The second graphic shows that almost all sectors, except energy stocks, are oversold on an absolute basis. Energy, not surprisingly, is grossly overbought. It may remain so until oil prices normalize. We advise taking profits in the sector and being ready to rotate out of energy if the conflict shows signs or the flow of oil resumes toward more normal levels.Arab OPEC nations forced to sell gold as oil revenues drip as a result of Hormuz closure. It’s thst aomple. There. Now You know the real story and this gibberish is bullshit.Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks. Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes.and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website. It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
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