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“If you could kick the person in the pants responsible for most of your trouble, you wouldn’t sit for a month.” – Theodore Roosevelt

Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.  

A flurry of trade deals announced over the weekend and this morning has futures surging, with the S&P 500 indicated to open up about 0.8% and the Nasdaq indicated to rally more than 1%. It should be noted, however, that current levels are off the overnight highs. With most of the announced deals being connected to Asia, that is where the biggest gains were seen overnight as the Nikkei rallied 2.5% while China gained more than 1%. European stocks have been much more subdued this morning as the STOXX 600 is just marginally higher and major benchmarks on the continent trade on either side of the unchanged line.

With investors taking more of a risk on approach, treasury yields are higher, with the 10-year yield moving back above 4% to 4.03%. Crude oil is fractionally lower along with gold as it tries to recover after breaking a streak of nine weekly gains last week. Finally, after a rough go of it in recent weeks, Bitcoin is up again after a strong weekend, taking it back above $115K while Ethereum is up over $4,100.

As mentioned above, gold ended a streak of nine straight weekly gains last week during which it rallied more than 25%. Since 1975, it was just the fifth time that gold traded higher for at least nine weeks and the first such streak since August 2020. Of the four prior streaks, only one in 2007 lasted longer (12). Of the four prior streaks, after the first down week that ended the streak, gold continued lower over the following three months three times for a median decline of 4.6%, and a year later it was lower three out of four times as well for a median decline of 7%.

As shown in the chart below, gold’s decline last week was a sharp reversal from record highs hit just last week and was one of the larger drawdowns we have seen in the commodity over the last year. Despite the decline, though, gold remains well above its 50 and 200-DMAs.