Weekly Memorandum 4/5/2021
Stocks are poised to start the week higher coming off a shortened trading week due to the Easter/Passover holiday weekend. We saw the Dow and S&P close at all-time highs last week, which is nothing short of bullish. As we've mentioned before, we just need the Nasdaq to catch up and tag a new all-time high here shortly, lest it turn into a sell signal at some point.
Interest rates dropped slightly last week until the payroll reports came out on Friday, which then saw them spike higher into the weekend. Higher rates have attracted foreign capital back into the U.S. Dollar, which has rallied since January. The question now is how long this dollar rally will persist, and whether it will eventually have an impact on commodity prices, which have rallied very strongly over the past year. Inflation expectations remain at decade-plus highs, and this is putting pressure on bond markets.
The 'Big 3' cryptocurrencies also put it good weeks, while gold and silver finished lower but well off their weekly lows. A new Mercator Letter was issued this past weekend. Pick up a copy for just $20 at this link.