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Geopolitical Risk Returns, or Not

Geopolitical Risk Returns, or Not

Futures show no signs of trouble after Saturday’s events took their toll on cryptos…

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Monday, April 15. Tax Day. The Bottom Line segment of today’s podcast starts at (6:20) for listeners who want to skip ahead.

State of Play

It was not what one would call a quiet weekend as news of Iran attacking Israel broke on Saturday afternoon. Cryptos initially sold off in a major way before rebounding as the attacks did little damage and a response from Israel has yet to materialize. As we look at our board of indicators at 0635, there are few of trouble:

  • Stock index futures are pointing to a higher open, led by tech with the Nasdaq u 0.5% and S&P 500 (SPY 0.00%↑) right behind them at +0.4%;

  • Commodities show no signs of concern at all. WTI crude oil is down 1% to trade below $85/barrel. Copper is up 0.8%. Gold is flat;

  • Cryptos are rebounded, with bitcoin up 4% to trade around $66,500. That’s still below where they were on Friday but well north of the $61,000 level they found themselves on Saturday afternoon;

  • Bonds are dropping, so no safe haven trade here either. The 2-year yield is up 6 basis points to 4.94% whilst the 10-year is up 7bps to 4.57% (yields move inversely to prices).

Today’s Known Events

There will of course be much obsessing about geopolitical risk. Already the armchair Middle East experts are all over the social media. Consider this a friendly reminder that financial markets do as good a job as any of providing an accurate gauge of the risk. Not because markets are necessarily smarter, but because the folks who move the money will have hired the very best geopolitical experts — and no, these experts aren’t going to be on social media shooting their mouths off. They won’t need to because they’ll be getting paid by the banks and insurance companies and sovereign wealth funds and hedge funds of the world. So chances are that financial instruments — including but not limited to cryptos — will hold a good indication of the actual risk.

That leaves more regular data releases to move markets. We’ll get retail sales at 0830. This crucial reading on the state of the US consumer is expected to grow 0.4% month-over-month, slightly less than the 0.6% seen the previous month. Core retail sales, which exclude automobiles, are expected to come in at 0.5% MoM, which is an improvement over the 0.3% seen last month.

There are some earnings as well. Goldman Sachs (GS 0.00%↑) and Charles Schwab (SCHW 0.00%↑) are out before the open at 0930, making this a very busy morning indeed.

The Bottom Line©️

It’s another busy week with earnings season getting underway in earnest. Highlights include Johnson & Johnson (JNJ 0.00%↑) tomorrow and Netflix (NFLX 0.00%↑) and Taiwan Semiconductor (TSM 0.00%↑) on Wednesday. There’s also that Bitcoin halvening thing, whatever that is, presumably on Thursday or Friday.

And of course geopolitics. The Contrarian has as much an idea of what is going to transpire as anybody else, but is pretty confident this is not World War 3. Or not yet, anyway.


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The daily podcast discusses the major market activity and economic data release schedule for the day ahead, with a contrarian bent. Also includes regular podcast episodes a day (or more) early and without ads or announcements.