Weekly Briefing 8/2/20


This week witnessed a flurry of corporate earnings and positive surprises. Tech giants blew away expectations along with other consumer related stocks publishing encouraging numbers. China-US tensions remained in the back of many investors' minds this week without any escalation. Stimulus negotiations in Washington were combative, but both sides know a deal must be reached soon. Congress goes on vacation the second half of August, so look for a new stimulus deal to materialize any day. The big losers for the week were European stocks and the US dollar. The dollar is setting up a strong bounce in August, so anyone short should take note. Gold flirted with the $2,000 level in part due to safe haven flows, but here again we saw hedge funds reduce positions as they sold into the rise and commercial shorts kept steady pressure with their enormous short positions. A sustained breakout above $2,000 does not seem likely yet. The damage from the Covid crisis came home to roost this week with the largest GDP drop in US history of 32%. The bright spot in the data was that manufacturing and housing showed stability as well as durable good orders. The main trouble was stalled jobs numbers which is likely to put pressure on congress to get their new stimulus checks out asap. From a technical viewpoint the DOW, SPX, and NDX, all closed above their 50 and 200 daily moving averages - highly bullish. Next week, sentiment, manufacturing, and payroll data will dominate the calendar. With the $600 per week unemployment benefit set to expire, expect a lot of pressure to be placed on Washington to avoid a large land mine to the consumer economy.

In closing, we are four months from the US elections, 80 trading days, and investors should expect the start of incredible volatility in the markets with large back and forth swings based on a lot of fear and headline risk. However, with great volatility comes great trading opportunity.


HFZ

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Important Disclosures: Investing in the financial markets can involve considerable risk, including loss of principal. Past performance is not necessarily an indication of future performance.  Actual clients may achieve results materially different from the results portrayed.  All material is for informational and educational purposes only and is not investment advice and is not meant to suggest that any securities are suitable investments for any particular investor.  All information reflects our own actions, beliefs, and processes for purely informational purposes. HEDGE FUND Z LLC IS A FINANCIAL BLOG FOR THE SOLE PURPOSE OF EDUCATION.  HFZ does not represent themselves as acting in the position of an investment advisor or investment manager for funds that are not under their direct control and fiduciary responsibility. 

 

Third party quotes and information may not be representative of the experience of HFZ customers and do not represent a guarantee of future performance or success. Many of the results displayed on our website were achieved using leverage, such as 2x or 3x leveraged ETF's or equity options 

 

The information included at HFZ and HFZ writing, research, and updates is prepared for educational purposes and is not a solicitation, or an offer to buy or sell any security or use any particular system.  Information is based on historical research using data believed to be reliable, but there is no guarantee as to its accuracy. HFZ does not represent themselves as acting in the position of an investment adviser or investment manager for funds that are not under their direct control and fiduciary responsibility. HFZ will not provide you with personally tailored advice concerning the nature, potential, value or suitability of any particular security, portfolio or securities, transaction, investment strategy or other matter.  

 

No information, nor any opinion expressed on the Site or in the Services, shall constitute a solicitation or an offer to buy or sell any securities mentioned therein.  The information presented on the Site and in the Services has been prepared without regard to any particular investor's investment objectives, financial situation, needs, capacity, and trading ability or experience. Accordingly, you should not act on any information on the Site or in the Services without obtaining specific advice from your financial advisors and should not rely on information herein as the basis for your trading and/or investment decisions.  HFZ cannot claim or represent that any of our Services are suitable for you. 

 

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