Commentary: Paul Ebeling on Wall Street

#PaulEbeling #WallStreet #cryptpcurrencies #stocks #economy #politics

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"OPEC+ is likely to stick with its plan of raising daily output by 400,000 barrels per month"-- Paul Ebeling

Crude Oil fell as traders wait to see what Mr. Biden may do to alleviate gasoline prices amid growing criticism about the impact of rising costs.

On Crypto

Technical indicators suggest the rally in Ether, the 2nd-largest cryptocurrency, is due for a pause to refresh after a record-breaking run. Not the case for GBITS as it eyes $600/each by year end.

Bitcoin’s reaction to inflation was more aligned to the stock market’s reading into the implications for a perhaps stretched speculative exposure rather than the dollar’s value erosion. Its history is too short for drawing any conclusions and could be a “risk-on” inflation hedge at best.

Bitcoin was last seen trading near $65,973.28, representing a 0.5% gainer on the day, according to the data.

Currency traders see bitcoin as a barometer of overall risk appetite, just like the Japanese yen pairs, as well as tech and meme stocks.

On Stocks

Shares fluctuated in Hong Kong and dipped in China, where traders weighed stronger-than-expected retail sales and industrial output, PBoC liquidity support and a drop in home prices.

EU stocks are steady near record highs on the back of an earnings season that showed companies were deleveraging and weathering the supply-side crisis.

The US stock market's 5-wk winning streak was capped last wk on profit taking, as well as the S&P 500's 8-session winning streak and the NAS Comp's 11-session winning streak. They declined 0.3% and 0.7%, respectively, while the DJIA fell 0.6% and the Russell 2000 fell 1.0%. 

Look for a reversal this wk setting up for the next Bull leg North in to January

The Economy

Mr. Biden's absurd monetary policy position is a risk we should all see coming

Consumer price inflation hit a 30-year high of 6.2% in October. Producer price inflation increased 8.6% year-over-year in October. That is the highest year-over-year increase in a series that only goes back to November 2010, but, regardless, it is extremely high.

The FOMC did not have a discussion at the latest meeting about whether it has met the test for a rate hike. It only dared itself to reduce the pace of its super-sized asset purchases by $15-B per month.

The Fed aims to reduce the pace of net asset purchases by $15-B per month, such that its asset purchase program will end in June 2022. Between now and then, however, another $500-B will have been added to the Fed's balance sheet.

Investors are in a good spot to capitalize on the easy monetary policy, but just be sure to use prudent risk management strategies on the way up because the Fed's absurd policy position is a risk we should all see coming.

Politics

Democrats and Independents are becoming more and more disenchanted by Mr. Biden and his administration, as approval of the president reached a new low in The Washington Post/ABC News poll.

Have a prosperous week, Keep the Faith!