Risk Bouncing a bit today Spoos and Nasdaq trading in the Green, Bonds heavy and Gold Lower again . South Korea’s Kospi Closed down 1.2%,but the MIB +1% A good sign. German Gov’t will suspend Budget restrictions to provide Financial help to States that are struggling should be a negative for bunds.
Fear of Coronoa Virus spreading and its Impact on everyday life has caused buy the Dip mentality to turn into sell every pop. Could things be Different if markets weren’t at all-time highs? A few facts from Mizuho. “Hedge funds piled into leveraged longs right before this selloff in stocks. “Net leverage, a measure of industry risk appetite that considers long versus short positions, rose by about 5 percentage points, one of the fastest expansions in years, according to data compiled by Morgan Stanley’s prime brokerage unit. At Goldman Sachs Group Inc., clients have also ramped up their leverage after holding it steady since late 2019. At 48.4% on Thursday, the ratio stood at the 95th percentile over the past year, the firm’s data showed.” Sometimes markets just need a nudge or an event to cause the longs to turn tail and run for cover, I’m not saying Stocks wouldn’t have collapsed under weight on corona Virus but maybe loses would not be as extreme if everyone and there brother was not long.Speaking of Overloaded Longs “the long position in U.S. gold futures and options by money managers and other large speculators surged 22% in the week ended Feb. 18 to the largest in records going back to 2006, according to Commodity Futures Trading Commission data released Friday” Gold not following the playbook last few days as I it has been dropping along with spoos two things beh9ing fall One the Bank of International Settlement, The Central bank of Central Banks put out a note saying they are allowed to Sell gold and Rumblings that profitable positions needed to be sold to Cover The losses from losing positions AKA Long Risk.
Negative Virus headlines:
Iran now has the highest coronavirus death toll outside of China, threatening the wider Middle East- Iran’s health ministry on Tuesday confirmed 15 deaths from the new coronavirus amid 95 cases in Iran, the most fatalities of any country outside of China.
South Korea reports 169 new coronavirus cases, pushing total to 1,146: KCDC- South Korea reported 169 new coronavirus cases on Wednesday, pushing the total tally to 1,146, Korea Centers for Disease Control & Prevention (KCDC) said
US soldier based in South Korea tested positive for coronavirus- First US service member to have tested positive (forex live)
Japanese PM Abe: Will ask for cancellation, delay or downsizing of sports & cultural events for the next 2 weeks (BBG)
4 new cases confirmed in the Diamond Princess cruise ship, raising the total to 705 cases inside the ship (BNO news)
Iran Death total now stands at 19 the largest outside of China both South Korea and Italy’s Toll Stands at 12, South Koreas saw an Increase in Case of 284 Italy 51 and Iran 44 over last 24 hours.
Things continue to show improvement in Mainland China