Weekly Update 23 Aug 2019
It has been an interesting week with a surprise ending! Up until Friday's London PM fix, the official price I use for calculating the value of the US Dollar and other currencies, my summary would have been "National currencies, cryptocurrencies and bonds rose, while equities and commodities were mixed." But shortly after the PM fix, all hell broke loose in the trade war between the US and China, and currencies, especially the USD, tanked. This affects the prices of all the assets quoted in those currencies, pushing most of them lower by 1.0% to 1.5%. So the summary became "National currencies and bonds fell, while cryptocurrencies, equities and commodities were mixed." The biggest winners and losers remain the same, however. Gold stocks trounced all other assets, rising 6.7% (or 5.2% at end of day). The largest losses were in cotton, which dropped 2.5% (or about 4.0% by end of day).
The Japanese Yen was the best performing currency, rising 1.2% at PM fix, and closing the day off about 0.3%. The US Dollar, Euro, and Chinese Yuan finished in the basement, up 0.8% at PM fix but down 0.7% by end of day. My comments on other asset classes will be based on the PM fix prices shown in the table, but keep in mind that all finished the day 1.0% to 1.5% lower than shown here, so any asset that gained less that that amount actually ended the week at a loss. Bonds were weaker than USD cash, closing up 0.7% for short term SHY and 0.6% for long term TLT.
Ethereum made big gains this week, rising to a high of 4.2 grams on Monday, then pulling back to close the week at 4.0 grams, up 5.8%. Bitcoin followed a similar pattern, making a high of 226.9 grams on Monday, but fell harder as the week progressed, closing at 215.3 grams, up 1.1%.
Gold stocks were the week's star performer, both among the equities and overall. The HUI index gained 6.7% while the next strongest index, the Nikkei 225, added 2.6%. The S&P 500 was the weakest index, falling 0.7%. The DOW was off 0.2%.
Coffee was the strongest commodity, gaining 4.2%. Platinum also performed well, rising 2.9% to close at 17.6 grams per ounce. Cotton fell 2.5% to 12.0 mg per lb, a new all-time low, and largest loss for any asset this week. Silver was little changed, up 0.1%, at 353 mg per ounce.
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