Maybe it is a bottom, retail earnings impress, crypto rally stalls

If it looks like a bottom, acts like a bottom, and trades like a bottom, then it probably is a bottom. ​ Bear market rally calls are suddenly becoming quiet these days. ​ The risks of the Fed sending the economy into a recession are easing as inflation is slowly coming down. ​ The Fed’s soft landing seems achievable and that has allowed this rally to continue. The Fed’s minutes will confirm the Fed’s dependency on the next round of inflation data, which should suggest that another massive 75-basis point rate hike is very much still on the table. ​

US stocks rose after decent retail earnings as a mixed round of economic data still supports the Fed to go big with tightening in September. ​ Walmart did better than many feared as that profit warning earlier this month set the bar low for them. ​ Home Depot impressed and raised some questions whether the housing market is really cooling as quickly as many were expecting. ​

Tech is getting hit hard as chipmakers are facing a much weaker consumer that might not be buying expensive goods over the next few quarters. ​ Semiconductor growth is moderating and that is why Wall Street is seeing the unwinding of the overcrowded tech rebound.

Crypto hits a wall

The recent crypto rebound has hit a wall as retail traders continue to lick their wounds and institutions respect key technical levels. ​ Bitcoin can’t yet break above the $25,000 level, but it seems to be maintaining a bullish trajectory here. Pretty much everyone on Wall Street thought that the mid-June lows would get retested for bitcoin, but now it seems this dead-cat-bounce just doesn’t want to stop. ​ It appears the institutional money is mostly behind this recent rebound, which suggests it could have a better chance of lasting. ​

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya