The charts that matter: another big bitcoin crash

Bitcoin suffered another of its big corrections this week. Here's how that's affected the charts that matter most to the global economy.

Welcome back. 

This week, we turn our weary locked-down eyes to foreign holidays, and specifically to the airline sector. The idea that vaccines could bring the virus under control have made investors – and would-be travellers – optimistic, and the share prices of many airlines are back on the way up. Matthew Partridge takes an in-depth look at the sector and picks the best-placed shares to buy now.

In the podcast this week, Merryn talks to one of our favourite global economists, Dambisa Moyo. She talks about the future role of corporations vs governments at a time when public trust in big companies – not necessarily fairly, says Dambisa – is not particularly high. She also has a lot to say about the economic recovery (or lack of) from the pandemic, the strength of China’s economy, and the prospects for the UK and Europe. Listen to what she has to say here

This week’s “Too Embarrassed To Ask” video takes a look at Dogecoin, the cryptocurrency created specifically to poke fun at the whole cryptocurrency thing, which everyone is now taking seriously after some remarkable gains (and some big falls too). Watch that 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’s mini-rally continued. One reason, perhaps, is China’s continued appetite for it, as Dominic Frisby explained earlier in the week.

Gold: three months

Gold: three months

(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) turned up towards the end of the week.

DXY: three months

DXY: three months

(DXY: three months)

The dollar’s bounce is reflected in chart of the Chinese yuan (or renminbi) – when the red line is rising, the dollar is strengthening while the yuan is weakening. 

Chinese yuan to the US dollar: since 25 Jun 2019

Chinese yuan to the US dollar: since 25 Jun 2019

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

The downward drift in the yield on the ten-year US government bond continued for another week.

Ten-year US Treasury yield: three months

Ten-year US Treasury yield: three months

(Ten-year US Treasury yield: three months)

The yield on the Japanese ten-year bond also continued to drop.

Ten-year Japanese government bond yield: three months

Ten-year Japanese government bond yield: three months

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

The yield on the ten-year German Bund, however, continued its slow rise towards positive territory.

Ten-year Bund yield: three months

Ten-year Bund yield: three months

(Ten-year Bund yield: three months)

Copper’s positive mood continued as it headed back up, almost hitting its most recent high.

Copper: nine months

Copper: nine months

(Copper: nine months)

The closely-related Aussie dollar didn’t seem to share its enthusiasm, however, drifting downwards against the strengthening US dollar.

Aussie dollar vs US dollar exchange rate: three months

Aussie dollar vs US dollar exchange rate: three months

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

Cryptocurrency bitcoin plummeted this week –  a much bigger fall than we’ve seen in recent months. John explained in yesterday’s Money Morning how US president Joe Biden’s plans for higher taxes on “the rich” may have had something to do with it. If you missed, it, have a read of it here

Bitcoin: three months

Bitcoin: three months

(Bitcoin: three months)

US weekly initial jobless claims fell again – down 39,000 to 547,000, compared to 586,000 last week (revised up from 576,000). It’s the lowest number of claims since March 2020. The four-week moving average fell to 651,000, down 27,750 from 678,750 (which was revised down from 683,000) the week before. 

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

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

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

The oil price seems to be making its way back up.

Brent crude oil: three months

Brent crude oil: three months

(Brent crude oil: three months)

Amazon continued its modest retreat from its recent high. 

Amazon: three months

Amazon: three months

(Amazon: three months)

While Tesla continued to tread water.

Tesla: three months

Tesla: three months

(Tesla: three months)

Have a great weekend. 

Recommended

How to cut your car’s fuel bill as the price of petrol hits a record high
Personal finance

How to cut your car’s fuel bill as the price of petrol hits a record high

The cost of filling the typical car’s 55-litre tank with petrol is now around £105. Here, Saloni Sardana looks at ways to keep your refuelling costs d…
5 Jul 2022
Saga’s figures are heading in the right direction – so should you buy?
Share tips

Saga’s figures are heading in the right direction – so should you buy?

Saga the over-50s travel and financial services specialist, has been struggling for years. But now, with the pandemic behind, it it is planning for fu…
5 Jul 2022
Director dealings w/e 1 July: what company insiders are buying and selling
Stocks and shares

Director dealings w/e 1 July: what company insiders are buying and selling

Directors’ share dealings can often give investors an insight into the sentiment of company insiders. Here are some of the biggest deals by company di…
5 Jul 2022
Is inflation about to drop as recession takes hold?
UK Economy

Is inflation about to drop as recession takes hold?

Central banks are raising interest rates in an attempt to curb soaring inflation. But will that push the economy into recession? John Stepek looks at …
5 Jul 2022

Most Popular

Ray Dalio’s shrewd $10bn bet on the collapse of European stocks
European stockmarkets

Ray Dalio’s shrewd $10bn bet on the collapse of European stocks

Ray Dalio’s Bridgewater hedge fund is putting its money on a collapse in European stocks. It’s likely to pay off, says Matthew Lynn.
3 Jul 2022
Persimmon yields 12.3%, but can you trust the company to deliver?
Share tips

Persimmon yields 12.3%, but can you trust the company to deliver?

With a dividend yield of 12.3%, Persimmon looks like a highly attractive prospect for income investors. But that sort of yield can also indicate compa…
1 Jul 2022
The income investor’s dilemma
Income investing

The income investor’s dilemma

Pay attention to dividend growth as well as initial yield when picking income trusts, says Max King.
4 Jul 2022