Trump speech on stronger dollar caused the currency to decline. It was expected speech considering the fact as Trump is trying to push for stronger and better trade deals for the country.
Some reports do not have a happy ending for the positive economy. One of the major drivers of US economic growth is car sales and loans which have been declining this year. If we keep getting non-happy reports that will likely push the stock market down so close eye should be kept on them.
Gold and oil rose during the week as investors were piling into gold as a safe haven and US strike in Syria caused stressful days for investors as oil prices went up due to rising uncertainty. Currently, oil started to trade in a range after a long rally during the week. I did miss the trade, however, I am not complaining about it. I could not have a clear vision where the oil prices are heading as I do not have one right now as well, therefore, I am staying out of it. OPEC extension deal is as unlikely as expectations for positive growth and demand for oil around the globe. Rig count is on the rising and US shale will keep going up as long as prices are more above 45$. US companies are getting better at reducing costs for fracking by inventing better technology which will cause to an oversupply of the market in the midterm cycle.
Gold is my safe bet right now. The only mistake I did have was that I reduced my positions by two-thirds after I made a profit and went back in later which was not logical at all. The reason for that trade was basically I got ahead of myself and wanted to lock into my profits and was afraid that prices could reverse. However, after building more conviction I was back in again. I will stick to gold as long as I don’t see any major reversal. My hypothesis still stands on gold which is investors will keep pouring money into gold as a safe haven again as Trump policies become less optimistic for everyone.
The stock market is losing its steam and we can see a major reversal sooner rather than later as investors become more and more anxious and fearful of economic and political development. I will keep a close eye on that and might start shorting market index.
My small bond position does not work at all. It seems FED rate hike had less impact than markets participants’ willingness to pouring into bond market as a safe asset class.
In the political arena, Trump dropped the “mother of all bombs” in Afghanistan and now the USA is pushing against North Korea. Things can get ugly as media right now is more focused on that matter rather than what happens in Syria.
French election is coming up this weekend. Maria le pen can win the election which might cause euro to decline. I will keep a close eye on the matter, however, I don’t I will be quick enough to benefit from the sharp rise or fall of the currency as investors will put their bets on Friday and we might see a break in the euro currency on Monday. The election is on Sunday 23 April 2017. I might put my bet on euro on Friday as well depending on my judgment. I don’t have strong conviction yet on the matter.
Turkey pushed for a referendum to give more rights to the president and it got it. Now, President will have more power over Prime Minister and Erdogan will rule the empire again. Some think that will lead to dictatorship but I don’t think so. As an ally of USA, this referendum results can be a headache for the West but Erdogan is good at running his country’s foreign policy as good as domestic policy. I don’t think the West can afford to lose Turkey as its ally. So, overall, as long as the West get along well with Erdogan everything will be fine. ( can’t say the same for Turkish people though. Time will tell)
My portfolio was up 0.71% from the last week whcih was mainly due to gold price rise. If time permits to analyse more, I will take further actions.