Rotation?

Macro Perspective: Monday 24 August 2020

In a week where SPX ended at new highs and DAX & DJIA recovered after relatively nasty spike downs, you may be wondering `What's going on?` PArticularly as both the recent risk instruments (EURUSD) and Gold reversed again after sharp rallies.

Is this a precursor of things to come across the board?

Yes, but not imminently. The market is complacently both bullish US stocks whilst also slightly, albeit generally, confused. I suspect this arguable dichotomy will increase for a while longer, whilst we are also likely to see increasing volatility in rotations between indices and Dollar pairs. The distrust of new highs in a world of Covid-19 and approaching US elections has seen many attempt (premature) longs in the laggards.