JAN 05. FED again…


[01/05] FED’s announcement changed a lot of things today. FED think, they might raise the interest rate sooner than their original plans. That means, their tapering will be speed up as well. Stocks market changed the direction right after this news. DJ dropped their highest numbers to the downside, ended 0.94% down. S&P fall 1.83% and NASDAQ big dropped 3.06% today. Big Tech firms lost big value today as this news triggered short term profit takers selling their positions. Apple, Amazon, MS and you name it, all downed big. Oh…Tesla dropped hard as well, still over $1,000 per share, no worries for Tesla stockholders but seems like, could tumble a bit more in near future. Apple and Tesla, these 2 companies are of course proud AMERICAN COMPANIES, and they are doing really good in business. Can you guess another common thing? Yes, they are doing really good in China. China is the 2nd biggest IPHONE selling market in the world after USA and Apple still produce 100% of their products in China. Really wonder why Chinese government is doing nothing to Apple after they’ve seen what US government did to Huawei. Because Chinese people so much in love with IPHONE? Tesla is the No1 EV company in China, and they opened new dealer shop in Xinjiang state. Well done, guys. So, proud. That’s the way of living, right? Crude oil broke hard as well after the FED’s possible early interest rate rising possibilities but ended at positive side of the day still. Brent oil ended at $80.90 per barrel, 80 cents up. Today’s high was $81.50. So, look like money is halting its flowing into the equity market for now. Where would it go from here? But we could find some kind of trend in the money market recently. When FED finished their monthly meeting at the 1st week of the month, all kinds of hawkish stories pulled off the market so hard for a few days. Then market is recovering so well to the end of the month, setting up another new high numbers. Equity market has been moving like that for about 5~6 months now. Let’s see what would happen after FED’s real action take in place. In Ag market, unlike yesterday, big reverse in corn and wheat market but not in soybean group. Soybean and oil up again. Malaysia is in flood with heavy rains, damaging their palm productions. That caused huge bull market in vegetable oil markets. Today’s 1.9% surge of Chicago soybean oils is surely related with this flooding in Malaysia. China was buying a couple of Brazilian bean cargos last night but generally quiet. Southern Brazil is still dry and looks like it’ll be no rain for rest of this week. Still, 2 factors are driving Ag markets into the bull cycle these days. One, drought in South America. Two, Chinese demand. Drought in SA is in progress, and we all know it damaging the crops for sure. However, this factor has been on the market over a month, getting tired of this old story. Bull market need new factor and that could be the one from China. They need more grains and oilseeds for sure. When are they going to start?



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