ch-ch-changes

market vibes

July 8…)

“In France one must adapt oneself to the fragrance of a urinal.” Gertie Stein

No data today. FOMC minutes tomorrow.

Highlighting the doldrums that lie ahead, Kevin Warsh, a candidate for Fed Chair, opines "bad policies" are limiting growth in the United States. Michael Bloomberg penned an op-ed blaming climate change for the tragic loss of life in Texas. GS thinks US equities will rise 11% next year.

A heat wave in China hasn’t moved the energy needle at all. "[Ample supplies] of piped natural gas, where prices are linked to oil, flagging under the weight of a supply glut (of LNG), and sputtering industrial demand overall are also limiting the impact of a surge." Tariff stragglers are getting letters, but the mood is chill.

Trump changed his mind after speaking to Putin and said he would send more weapons to Ukraine. I posted a chart of RTX (formerly Raytheon) below for your guide. RTX serves commercial, military, and government customers worldwide.

In the markets

The dollar index continues to hug the T line spanning the entirety of 2025. There is so little stress in the trend, it’s likely a period of horizontal activity will invalidate it and either resume the downtrend later in the summer or return to its very long-term (decades) POC at 100.00.

This is a 20-year compression profile of spot DXY showing the dominant point of control at 97.00. I would have done a 30 or 40-year sample, but Bloomberg’s data library is limited.

However, by my thumbnail, a 50-year sample illustrates the most frequently traded midpoint is 100.00. As you can see, the index moves freely between 80.00 and 120.00 and tends to bounce back and forth like an 80s video game. Once a trend develops, the dollar has always gone to its extreme and reverted.

I wouldn’t be surprised, given Trump’s growth agenda and Powell’s restraint diminished, to see DXY at 80.00 before 2028. The cycles are roughly 5 to 10 years in duration, and we are 5 years into the current long term.

This would be generally bullish for gold, metals, and commodities, including energy.

Continuing a review of markets becalmed, bonds in trouble, gold and silver’s relentless compression, oil unhappy in the middle of the middle, bitcoin has so lost its mojo and ch-ch-changes in the vibe…