Dow hits intraday record high

TAKEAWAYS

•    Dow Jones industrial average rallies 400 points, hits a record high
•    Nasdaq 100 index drops over 2%, falls into correction as tech stocks crunched again
•    Tesla stock drops 5%, loses nearly $250 billion in value in one month
•    Disney stock hits record high as California plans to reopen theme parks
•    Dollar rally extends on Monday as bond yields rise
•    US 10-year treasury yields rise back over 1.6%
•    Gold drops $20, sinks further below $1700 per oz
•    Oil sees profit-taking after Brent crude reached $70 per barrel
•    Rotation to ‘cyclical’ stocks sees big jump in European indices
•    VIX index rises over 25 as volatility picks up
•    DAY AHEAD: Eurozone GDP

BEST CHART
Brent crude oil– Weekly Candlesticks

 
Source: GKFX / MT4 (March 8, 2021)

Brent crude oil has pulled back from topping $70 for the first time since January 2020 and its highest since May 2019. It’s a profit-taking move at major resistance and a big round number. 

GURU WISDOM

"Courage taught me no matter how bad a crisis gets ... any sound investment will eventually pay off." — Carlos Slim Helu 

MARKETS

*Daily closing price
↘ EUR/USD    1.1846        (-0.67%)
↘ GBP/USD    1.3819        (-0.23%)
↗ USD/JPY    108.92        (+0.48%)
↘ S&P 500    3821.35    (-0.54%)
↗ Euro Stoxx    3,763.24    (+2.55%)
↘ Hang Seng    30,159.01    (-1.92%)
↘ Gold        1682.66    (-1.47%)
↘ Oil (Brent)    68.00        (-1.96%)
↗ Bitcoin    51,800        (+1.51%)

NEWS

The rotation trade was on clear display on Monday with a chasm opening up between the major US indices. The Dow, full of cyclical reopening stocks and the Nasdaq full of stay-home technology stocks are going in opposite directions. A new record high in Disney stock on news that California is making plans to reopen theme parks added to gains in the Dow.

While the Dow hit a new intraday high the Nasdaq dropped into correction territory led lower by Tesla, which has lost nearly a quarter of a trillion dollars in value in just a month. European indices, which include a lot of cyclicals like bank and materials stocks jumped.

In macro markets, the 10-year US Treasury yield rose back above 1.6% and is close to the ‘spike high’ that the caused the first wobble in stock markets this month. The dollar gained ground thanks to the relative yield advantage as EUR/USD dropped under 1.185 and gold fell another $20 to near $1680 per oz. 

Oil traders took the opportunity to fade the move over $70 in Brent crude after a Saudi tank was the target of a drone strike. The 70-level comes after a massive rally that has gone almost unabated since November.

DAY AHEAD 

*Times in GMT
07:00 – Germany Trade Balance s.a.(Jan) [€16.2 B Exp vs. €16.1 B Prev]
10:00 – Eurozone Gross Domestic Product s.a. (QoQ)(Q4) [-0.6 % Exp vs.     -0.6 % Prev]