The charts that matter: tech stocks bounce as Biden throws cash around

In a week when US politicians approved $1.9trn in stimulus spending and tech stocks paused their selloff, we look at what’s happened to the charts that matter most to the global economy.

Welcome back. 

This week, we look at Joe Biden’s $1.9trn stimulus plan and ask whether it will fuel inflation around the globe – and what you should do about it. Cris Heaton looks at Vietnam, one of our favourite emerging markets that’s shaking off the Covid-19 crisis and looking better than ever. And David Stevenson looks at how the fast-growing cannabis industry is getting along, and how you can buy into it. If you’re not already a subscriber, sign up now and get your first six mags (plus a beginner’s guide to bitcoin) free.  

Our latest “Too Embarrassed To Ask” video looks at the two main types of pension scheme you’re likely to find yourself in – defined benefits and defined contributions – and what the difference is between the two  Find out more about it in our video here.

No guests in our podcast this week; it’s just John and Merryn chatting about the “great rotation” out of high-priced growth stocks, the likes of which you’ll find in the Nasdaq index, and into the cheaper, more unfashionable value stocks that you might find in the FTSE 100. They also talk about the new wave of young, tech-savvy investors dropping spare cash on stocks via their smartphone apps and wonder if they’re in the market to stay – and how they might affect it if they are. Have a listen to what they’ve got to say here.  

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

Now for the charts of the week. 

The charts that matter 

Gold rallied a little, but the downward trend may continue for a while yet.

Gold price chart

Gold price chart

(Gold: three months)

The US dollar index (DXY – a measure of the strength of the dollar against a basket of the currencies of its major trading partners) took fright and plummeted after hitting a three-month high last week.

US dollar index chart

US dollar index chart

(DXY: three months)

Despite that, the Chinese yuan (or renminbi) started to weaken against the dollar (when the red line is falling, the yuan is strengthening). 

USD/CNY currency chart

USD/CNY currency chart

(Chinese yuan to the US dollar: since 25 Jun 2019)

The yield on the ten-year US government bond stabilised.

US ten-year Treasury bond yield chart

US ten-year Treasury bond yield chart

(Ten-year US Treasury yield: three months)

The yield on the Japanese ten-year bond dropped back from last week’s little recovery.

Japanese ten-year government bond yields

Japanese ten-year government bond yields

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

And the yield on the ten-year German Bund also dropped back.

German 10-year bund yields

German 10-year bund yields

(Ten-year Bund yield: three months)

Copper stopped its recent slide and could be back on the rise. It’s likely to remain in high demand as the world comes out of lockdown to buy shiny new electric cars and suchlike.

Copper price chart

Copper price chart

(Copper: nine months)

The Aussie dollar – highly driven by commodity prices – turned back up too.

AUD/USD currency chart

AUD/USD currency chart

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

Cryptocurrency bitcoin is back heading to the moon, doubtless driven by all the digital art NFT mania currently sweeping the globe.

Bitcoin price chart

Bitcoin price chart

(Bitcoin: three months)

US weekly jobless claims fell by 42,000 to 712,000, compared to 754,000 last week (revised up from 745,000). The four-week moving average fell to 759,000 from 793,000 (which was revised up from 790,750) the week before. 

US weekly jobless figures

US weekly jobless figures

(US jobless claims, four-week moving average: since Jan 2020)

The oil price (as measured by Brent crude) corrected its correction, getting back on course.

Brent crude oil price chart

Brent crude oil price chart

(Brent crude oil: three months)

Amazon bounced back quite fiercely. There is some speculation that the Nasdaq rally is being driven by hedge funds covering their short positions, according to Bloomberg.

Amazon share price chart

Amazon share price chart

(Amazon: three months)

Tesla bounced along, too.

Tesla share price chart

Tesla share price chart

(Tesla: three months)

Have a great weekend. 

Ben

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