AI Divergence Between Microsoft And Google Intensifies
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US stocks failed to keep up with the European optimism on the back of rising bets that the Federal Reserve (Fed) could hike the interest rates to 6%.
In fact, option traders are piling into bets that the US rates could peak at 6%.
Mexico’s Banxico
Plus, the surprise 50bp hike from Mexico’s Banxico, on the back of unexpected – and unwelcomed inflation jump since the end of last year, also raised worries that the US could experience a similar uptick in inflation, and, may have to raise rates higher.
Optimism
And the strong US jobs market, the latest recovery in energy and commodity prices on the Chinese reopening optimism, and the sudden jump in second-hand car prices are red flags…
Stock market
The S&P500 fell 0.88% yesterday, and Nasdaq retreated 0.90%. Topsellers will likely remain in charge of the market on the possibility that maybe inflation in the US may have not eased to 6.2% as expected by analysts.
But nothing is clear before next Tuesday’s CPI release, in terms of Fed expectations.
USD
What’s interesting though, is that the hawkish Fed bets don’t translate fully into the US dollar valuation. The US dollar remains under pressure despite the positive pressure on the US yields. And the 50-DMA offers remain particularly solid in the US dollar index.
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Bitcoin
Finally, Bitcoin fell 5% on news that Kraken stops staking. Negative pressure in tech stocks could further weigh on appetite.
Watch the full episode to find out more!
- 0:00 Intro
- 0:32 Swiss stocks fell on mixed bag of bad news
- 2:48 US stocks under pressure as option traders bet for 6% Fed rate
- 5:25 AI divergence between Microsoft and Google intensifies
- 5:57 Tesla rallies past $200 but…
- 6:47 US dollar remains offered at 50-DMA. What are traders waiting for?
- 7:29 Bitcoin under pressure as Kraken halts staking
Ipek Ozkardeskaya
Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
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