Crypto’s, Bonds, and Volatility

The stock market rose for the first time this week on Thursday, as President Donald Trump said trade talks with China were going well, giving bulls hope and relieving worries that a feisty dispute would slow economic growth.

A senior Chinese diplomat said the rhetoric out of washington was disputes is “naked economic terrorism”, even as Trump said Beijing wanted to make a deal with Washington. Sounds like they don’t share the president’s feeling that a resolution is near.

Further driving bullish sentiment was the economic data we told you yesterday to watch out for. The positive GDP results showed that domestic economic growth accelerated in the first quarter, but there were signs that the temporary boost from exports and inventory accumulation was starting to slow.

That being said, even with the economic data and the bone that the President threw the bulls..they weren’t very satisfied…

The SP500 hovered just above the 200 Daily Moving Average all day…

Markets

Crypto: Check this theory out. So the US-China trade war could eventually spread into the US bond market, with China selling-off US Treasuries and threatening to increase the sell off. And that could send Bitcoin, and the rest of crypto to all time highs. Today BTC pulled back hard after rejecting 9k resistance. The digital currency has been on a bull run since April and is still trading above its 9EMA daily.

Is Bitcoin the new gold? The US-China trade war is evolving from tariffs to technology, It could be that Bitcoin is turning into the new gold. Meaning the ultimate hedge against inflation and bearish markets in the digital world. The digital currency has gained 132.69% YTD since the beginning of the year. Other major crypto currencies have followed suit.

Bonds: Ok, so bonds are the most interesting. But, should we worry about the message they are sending markets? Yields Are dropping everywhere. Which means demand is increasing. Fast.

When investors get the willies, they buy government bonds. How come? Governments typically pay back their debts, so those bonds are a safer bet, than say, your garden variety stock.

So the main thing to know is the rule of supply and demand. Falling yields are a tell tale sign that there might be trouble up ahead.

Whats on deck?

Michigan Consumer Sentiment at 10:00am and Rig Counts at 1:00pm

Traders will be looking at Consumer sentiment tomorrow to gauge the future health of the economy. Last report showed bullish economic sentiment. Can the Bulls catch another break today?

Oil futures (CL_F) tend to be pretty volatile on Fridays. Futures traders will be watching to see if the rig count went up or down to have a handle on what to expect with oil prices moving into June. The price of oil and markets has been running n’sync this year. Watch for signals on what way momentum may shift today.

Earnings

Finally..your UBER ride has arrived.

UBER reported earnings today after the bell. The company reported quarterly losses of $(2.26) per share which missed the analyst consensus estimate of $(1.46) by 54.79 percent. The company reported quarterly sales of $3.099 billion which beat the analyst consensus estimate of $3.08 billion by 0.62 percent. The bigger positives are Q1 Adj. EBITDA Loss was $869M vs $280M, Down 210% Year Over Year….seems it could be headed in the right direction!

Big Lots (BIG) earnings report before the bell Friday Morning. The notorious BIG stock has taken a beating in recent weeks, with little help from overall market conditions. It’s peers Target (TGT) and Dollar Tree (DLTR) reported good earnings. People seem to love the company. With the new housing market still going well, have consumers been furnishing their homes with Big Lots goods? We find out today.

ECONOMY

The Fed’s still buying mortgage bonds..but less

The Federal Reserve bought $29 million of agency mortgage-backed securities in the week from May. 23 to May. 29. Less than half than the $67 million purchased the previous week, the New York Federal Reserve Bank said on Thursday. The Fed is has been trying to help the housing market since 2011. The U.S. central bank has been using funds from principal payments on the agency debt and agency mortgage-backed securities.

U.S. wants new trade pact with Canada, Mexico passed by summer:

VP Pence recently met with “Justin from Canada” aka the Canadian Prime Minister Justin Trudeau. The deal, which has been ongoing since last year, is meant to replace the existing North American Free Trade Agreement (NAFTA). It has yet to be ratified by any of the three countries, but the process is getting kicked into high gear.

Remember last week when Trump squared off with Pelosi? During infrastructure talks, Trump fought with Democratic House Speaker Nancy Pelosi, who will control the timing of any vote on the deal. The two haven’t been seeing eye to eye over her party’s investigations of his administration. He also said Pelosi does not understand the trade agreement and to how it could benefit US citizens.

Several lawmakers in the Democratic-controlled House of Representatives have said the deal needs stronger enforcement provisions for new labor and environmental standards.So it’s safe to say this one’s not going to be cut and dry. But it is important to pay attention to. How will some companies that do business in Canada and Mexico be impacted should this agreement become law? Time to start digging.

Disney gets a new theme park

Starting Friday, Disneyland (the one in California) guests will get to visit the world of Luke Skywalker, Princess Leia and  Chewbacca — but they’ll have to cough up big bucks if you want the full experience.

The new theme within a theme park, which cost over 1 billion to make is called “Star Wars: Galaxy’s Edge,”  And it’s one of the largest expansions in the history of Disney (DIS). It covers 14 acres and will feature two rides and more than a dozen shops and restaurants that are sure to leave you walking away with a new lightsaber and a lighter wallet.

Don’t worry east coasters – Florida’s Disney World is getting the same theme park sometime in August.

Again…it won’t be cheap to enter this section of the Disney galaxy. Entry fees start at least $129 and you have to make an advanced reservation.

For those who want to visit the Galaxies Edge…you can’t buy separate admission specifically for that part of the park. The only way to get in is to buy a regular ticket to Disneyland. A single-day ticket on May 31 starts at $129. From June 1 through September, one-day admission to Disneyland the base price goes up to $149 per person ages 10 and older. This is typical because it’s the busiest time of the year for the park.

Lightsabers at the park are said to cost a jaw dropping $200 each. And don’t forget tax!  You’ll also be able to buy the many custom droids available for only $99. We think it’s worth the trip though, if you’re a hard core Star Wars fan. The franchise has treated DIS stock very well in recent months, and the mouse is betting on it will continue to line its castle with cheese. The stock is one of the strongest media stocks on the market trading above its 50 Daily Moving Average.

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