The story of yesterday is I believe a combination of
- the news that AAPL that will repatriate large sums of cash to the US and announced the creation of 20,000 new US jobs
- the beige Fed book that stated employment tightness
Both are indication of a healthy economy, but also the propensity for the Fed to raise rates at the end of January.
This is the reason why the US$ indicates a possible bounce here against the Euro and the Yen. Note that the US$ bounced exactly at 14:00, when the beige book was published.
As a consequence, we can start to detect some weakness in Copper and the PM sector.
ABX shows much selling here
On the energy front, even though oil is still high, it could easily weaken if the US$ bounces.
Note how weak the Canadian dollar looks here (Trade issues are in the background)
Conclusions:
Instead of chasing markets higher, it could be interesting to short gold miners IF the US$ bounces.
Also note that many defensive sectors are weak, including fixed income sectors.
KMB for example looks to be under selling pressure. Earnings are next Wednesday. hence, I will not take a position, but will keep an eye on the cosmetics sector.
The 10Years' selling will continue to put a lid on the fixed income equities.
