Week's Market Trends: Bullion, Bitcoin, and Banks Soar Amid 'Trump Trade'

Soft Data Versus Hard Data

This week saw a slight decline in 'soft' data, which was overshadowed by a surge in 'hard' data. This shift in the narrative pushed the rate-cut expectations down for 2024, but they are predicted to rise again in a dovish manner for 2025.

The 'Trump Trade' Narrative

Despite the mainstream media's attempts to counteract it, the 'Trump Trade' narrative is gaining momentum. It's not just about a potential Trump victory, but a "Red Sweep" is also appearing to be a strong possibility.

Stock Market Performance

A low-quality rally kept stocks afloat into the weekend, with Small Caps leading the week strongly while Nasdaq ended unchanged. The gain in Small Caps was mainly due to a short squeeze and gamma squeeze. Banks emerged as the big winners this week, while Energy stocks lagged significantly. Tech stocks, on the other hand, remained unchanged.

VIX and Volatility

The Volatility Index (VIX) declined this week as various 'event' risk catalysts fell off the books. However, volatility is expected to rise leading up to the election and the Federal Open Market Committee (FOMC) meeting.

Treasury Yields

Despite a tumultuous week, Treasury yields ended only marginally changed, with the long-end slightly outperforming. The 2Y Yield hit 4.00% and then fell back down, while the 10Y yield dipped below 4.00% midweek, only to push back to the week's highs by the end of the week.

Gold and Silver

Gold reached a new record high this week, soaring above $2700. Silver also performed well, rallying for the fifth week in the last six, breaking above $33 to close at its highest since December 2012. Recent weeks have seen silver outperforming gold.

Dollar and Bitcoin

The dollar continued its upward trend this week, nearing July highs. The correlation between gold and the dollar is at its highest since March 2022. Bitcoin also had a strong week, reaching its highest 'close' since June, nearing $70,000.

Ethereum and Oil Prices

Ethereum continues to lag behind Bitcoin, erasing almost all of the DeFi boom outperformance. Oil prices saw a significant drop this week, pushing WTI back below $70. This marks the worst week for crude in over a year.

Prediction Markets

All prediction markets are leaning towards a Trump/Republican victory in November, despite 'polls' still favoring Harris. However, mainstream media outlets are suggesting that these predictions may be 'manipulated'.

Bottom Line

It's been a week of significant market trends and shifts, with the 'Trump Trade' narrative becoming more prominent. With the dollar and Bitcoin soaring, and oil prices plunging, it's clear that the market is in a state of flux. What are your thoughts on these developments? Do you agree with the prediction markets' leaning towards a Trump/Republican victory? Share your thoughts and this article with your friends. Don't forget to sign up for the Daily Briefing, delivered every day at 6pm.