It's liquidity stupid!
Strong M2 growth in China, and to a smaller extent Brazil and India, add to the ongoing expansion of M2 in the United States and in Europe. Our Global M2 proxy continues to point to a broadly supportive liquidity environment for risk assets. The S&P 500 continues to follow the evolution of our Global M2 proxy with an 11-week lag. Bitcoin has desynchronized from our Global M2 proxy since mid-August but bounced up strongly last week. Will it catch up our Global M2 proxy (and rise toward 140k)? NB: liquidity is one risk assets driver among others. Past results do not guarantee future results
It seems that Russell 2000 small & mid caps ETF $IWM is joining the breakout party...
Source: Trend Spider
Foreign holdings of US equities have crossed above $20 trillion, a record high.
30% of the total US stock market is now held by foreign investors, the highest percentage on record with data going back to 1945. Source: Charlie Bilello, Bloomberg
What moves stock prices:
Source: Brian Feroldi
US technology stocks now account for a record 56% of total US stock market cap.
At the same time, defensive stocks make up just 16%, AN ALL-TIME LOW. This has NEVER happened. Source: Global Markets Investor, Topdown charts
The move of the week!
Pharma stocks just had one of their strongest days in years, with large-cap names surging 9% after months of being stuck under political pressure. The move came from a wave of policy and industry news that reshaped how investors viewed the sector almost overnight. Here are the 3 catalysts: 1/ Trump’s announced a 100% tariff on imported branded and patented drugs. At first, markets braced for the worst. But as details came out, it became clear that the biggest U.S. players like Pfizer, Merck, Lilly, and J&J were largely shielded thanks to their heavy domestic production. Instead of being hurt, they were in position to benefit. 2/ Pfizer then cut a high-profile deal with the administration to lower Medicaid prices in exchange for tariff relief. That eased regulatory fears and sent a strong signal that other companies could strike similar deals, giving the market confidence that the sector had a workable path forward. 3/ The White House rolled out TrumpRx, a direct-to-consumer pharmacy platform designed to cut out middlemen and bring more predictability to drug pricing. Investors loved the idea of a simpler, more transparent system that reduces uncertainty around future profits. This trade goes into the "value with a catalyst" bucket... Source: Stockmarket.news, zerohedge
October is historically the most volatile month of the year for stocks.
Source: Brew markets
The U.S. Securities and Exchange Commission (SEC) is reportedly developing a plan to allow stocks to trade like crypto on the blockchain
It will treat shares of companies like Apple, Tesla, and Nvidia as digital tokens similar to how cryptocurrencies operate. While the initiative has gained support from crypto exchanges and fintech platforms, it faces pushback from traditional financial institutions that profit from the existing market structure. According to a report by The Information, the SEC is already consulting with market participants on regulatory changes that would make these tokenized securities possible. Source: cryptonews.com
