The charts that matter: bitcoin is surging to a new record high

Welcome back.

First things first, keep an eye out for a very special podcast landing in your inbox on Monday morning – Merryn has interviewed one of our favorite financial market analysts, Russell Napier. I won’t give you any spoilers here – suffice to say, you have to listen. Don’t go into 2021 without it! Look out for it, Monday morning, first thing.

In the current issue of MoneyWeek, we look at IPO fever – is it really such a bad thing in a decade that has seen equity markets being let down as a place to raise capital? – and our regular writers give their top tips for the year ahead. That includes me, and I can only say that I hope I do better than I did last year … get your first six issues for free here if you don’t already subscribe.

Also in this week’s podcast, after a succession of City guests and professionals and people you might actually want to hear, I join Merryn again to talk about V-shaped restorations, investment ideas for 2021, and how it has all been a very strange year in more than one way. Merryn also interviews a couple of entrepreneurs to find out how start-ups have coped in what certainly felt like a very hostile environment. Listen here.

Oh and only on podcasts – if you have the time or leverage and the option to do so, leave a review (preferably a five-star one) on whatever podcast platform you’re using. It’s not just for our egos – the more good reviews we get, the more listeners we attract, and the more resources we can invest to develop the podcast to make it even better .

Speaking of IPOs, that’s the essence of our latest video “Too Embarrassed To Ask”. So if you’re confused about what an IPO is, or why it’s happening, you can dispel that confusion in just over two minutes of viewing by clicking here.

And let’s just say – this will be the last Saturday edition of Money Morning until January 9th. But your daily Money Morning will march forward through 2020 for longer.

Anyway, here are the links for this week’s editions of Money Morning and other web stories you may have missed.

Now for the week charts.

The charts are what matters

Gold it came back this week as the most important event of all – the latest Federal Reserve meeting – passed by with no indication that the Fed will even consider raising interest rates until inflation is well and truly upon us. With a signal of intent clear, it is almost surprising that gold is not higher than it is.

(Gold: three months)

The US dollar index (DXY – a measure of the strength of the dollar against a basket of currencies of its major trading partners) slipped steadily after the Fed meeting, and it’s getting harder and harder for dollar bulls to maintain the idea that this is a passing correction.

US dollar chart

(DXY: three months)

The Chinese Yuan (or renminbi) continues to rise against the U.S. currency (when the black line below rises, it means the yuan is getting weaker against the dollar). At some point, the Chinese will start to feel that this is a problem – not good for their manufacturers – but so far we have not reached that point.

CNY / USD chart

(Chinese yuan to US dollar: since 25 June 2019)

The product on US government ten-year bond little changed, but drift higher.

US Treasury bond chart

(US Treasury yield ten years: three months)

The product is on the Ten years from Japan stay nailed to the floor.

Japan bond chart

(Japanese government ten-year bond yield: three months)

The product is on the Ten year German bundle has increased perceptually from last week.

German Bunds Chart

(Ten Year Bundle Product: three months)

Copper it continued to rise as investors became increasingly convinced of the “green bubble, bonuses reflation” scenario for next year.

Copper price chart

(Copper: nine months)

The Australian Dollar it made further gains as it benefited from demand for goods and from a weakening US dollar.

AUD / USD chart

(Aussie dollar exchange rate against US dollar: three months)

Cryptocurrency bitcoin had a stellar week. It finally broke above the 2017 high, amid signs that it was going mainstream.

Bitcoin price chart

(Bitcoin: three months)

Weekly US unemployed claims it rose even further this week, coming in at 885,000, compared to 862,000 last week (revised up from 853,000). Economists had been hoping to get closer to 800,000. The four-week moving average rose to 812,500 from 776,000 the previous week.

US unemployed chart

(U.S. unemployed claims, four-week moving average: since January 2020)

The the price of oil (as measured by Brent raw) also increased higher this week as more investors bought into the reflation trade of greater importance than the long-term “we no longer need oil” trade.

Brent oil price chart

(Brent crude oil: three months)

Amazon drizzle again as the background music grows increasingly hostile to Big Tech, and because it’s not a reflation trade stock either.

Amazon's share price chart

(Amazon: three months)

In the meantime Tesla just held on as its promotion to the S&P 500 looms next week. I’m really curious to see what happens when it goes up to the “adult” index. Will that mark the peak? Will the strange shenanigans associated with options that have helped the stock not function properly? Will it be a case of “buying the news, selling the event”? We’ll find out soon, just in time for Christmas.

Tesla's share price chart

(Tesla: three months)

Have a great weekend. And don’t miss Russell Napier’s podcast – it will be in your inbox bright and early on Monday!

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