Monday, July 20, 2009
There is perhaps an element of poetic justice that on the 40th anniversary of the Apollo moon landing, risk assets of virtually every description are attempting a moon shot of their own.
News that CIT has avoided bankruptcy appears to be the catalyst, though as Macro Man observed last week, that presents a bit of a logical inconsistency, given that CIT's woes didn't put the slightest dent in equity prices to begin with.
Anyhow, it's always dangerous to stand in front of a market hitching a ride on a rocket, and the Spoos are now quite close to delivering a new closing high.
Of course, there's the small matter of the rest of earnings season to navigate, as well as Bernanke's Congressional testimony tomorrow. Might talk of an "exit strategy", and a concomitant further sell-off in fixed income, apply a bit of pressure to risk assets? Perhaps, though 4% ten year yields are a more obvious inflection point than, say, 3.70%.
In the meanwhile, Macro Man has de-risked a lot of his portfolio after last week's trading frenzy. For choice, he's more inclined to play FX carry than equities here; USD/TRY has broken some interesting chart levels and has attracted quite a bit of interest this morning.
Now that schools in Europe are (finally) out for summer, Turkey should see the usual seasonal inflow from the tourist industry, which could provide a further fillip to the already-buoyant lira.
Whether it shoots the moon is anybody's guess; from Macro Man's perspective, he's happy to stay lightly-risked and nimble. From his perch, this remains much more of a trader's market than a macro thematic one; in that vein, a space shuttle is probably a more useful vehicle than an Apollo rocket.