A very rough week for the markets; every asset closed lower except copper, which rose 0.5%. The largest drops were in Japanese stocks, which fell 3.0%, coffee, which dropped 2.1%, and crude oil, which declined 1.9%.
Bonds and currencies (both national and crypto) fell, while equities and commodities were mixed but mostly higher. The largest gains were in coffee, which rose 5.3%, and crude oil, which added 4.1%. Ethereum fell 3.3%, the largest loss in the table for this week.
National currencies fell, but other asset classes were mixed. The largest gains were in gold stocks, which rose 4.3%, while the Dow Industrials took the largest hit, dropping 4.0%. Crude oil also fell hard, declining 3.9%.
We all know that prediction is tricky job, especially when it concerns the future… and Bitcoin, being a relative newcomer on the monetary stage, is loaded with more than the usual number of factors that could render the most carefully crafted forecasts wildly in error. But I’m going to make a stab at it, anyway! Please keep in mind that these projections are for entertainment only. No actual statistics were killed or tortured in the making of this post. Read on to see where I think Bitcoin is headed.
This week cryptocurrencies fell, stocks moved higher, and national currencies and commodities were mixed. Bonds were little changed. The largest gains were in crude oil, which rose 9.5%, recovering much of the prior week's 11% loss. Ethereum fell the most, dropping another 4.4%.
What goes up must come down… this was a very rough week, leaving only long term treasury bonds in the black, as the TLT bond ETF rose 1.0%, while all other assets declined. The largest losses mirrored the prior week's largest gains: crude oil fell 11% and European stocks fell 8.8%. UK stocks (not in table) did even worse than their European cousins; the FTSE dropped 9.9%.
I have recently received some calls and emails asking me to update my long term stock price charts… because they don't show "Great Depression" price levels. Well, I can assure all who are wondering about it that they are indeed up to date. Let's take a look at some low points in past stock index prices, with a focus on the S&P Composite as compiled by Robert Shiller. This data is based on monthly averages, converted from US Dollars to grams of gold.
Click on the chart to download a pdf.
The big news this week centered around the coronavirus outbreak, as total cases approached 12,000 (mostly in China) and the US declared a public health emergency and restricted travel to and from China. Big beneficiaries of the scare were cryptocurrencies and long term bonds. National currencies, stocks, and commodities all moved lower. The largest gains were in Bitcoin and Ethereum, which rose 9.3% and 9.1% respectively. Commodities took the biggest hits, as coffee dropped 8.0% and palladium fell 7.7%.
Cryptocurrencies rose strongly again, bonds declined, and national currencies, equities and commodities were mixed. Ethereum soared 18.3% and palladium jumped 16.5%, the largest winners this week. Coffee fell 6.0% and gold stocks declined 1.3%, making them the worst losses.
Most assets were lower this week; the only exceptions were gold stocks, up 5.9%, and silver, up 2.4%. The largest losses were in palladium and Ethereum which fell 3.6% each. Long term treasury bonds fell 2.4%, making them the next worst performing asset in the table.