Weekly Report CFT - Monday 18, December 2023 - Bitcoin | Stocks | $ Dollar New Update

Weekly Report CFT Monday, December 18th, 2023
BTC and ETH paused their rally and slipped last week as the cryptocurrency market weathered a selloff earlier in the week, possibly validating the scenario of an overheating market, and digested the latest inflation and monetary policy updates along with concerns about the Ledger’s attack with BTC falling through the $41,000 and hitting a low near $40,190 on perpetual futures last Monday. BTC and ETH were trading near $41,930 and $2,220 on Friday, respectively shedding -5.1% and -5.9% over the week and bringing the YTD performances down to +153% and +85.4%, from +167% and +97% last week.
US Equities extended their rally to notch a seventh straight week of gains as markets welcomed the moderately cooling inflation CPI numbers and the Fed’s December rates decision to hold borrowing costs steady at 5.25%-5.50% and to signal it was finished raising rates. The dovish stance gave further traction to the narrative of a rate pivot and bolstered hopes of a rate cut potentially throughout the first half of 2024. Consumer price index declined to 3.1% - Core CPI 4.0% - on a yearly basis, from 3.2% in October - Core CPI 4% - in line with expectations. S&P and Nasdaq closed on Friday near 4,719 and 14,813, respectively notching weekly gains of +2.5% and +2.8% while the VIX index steadied near 12.2%, below its 200-Day MA currently at 16.3%.
US Treasury yields incurred a week of losses following the Fed’s dovish forward guidance with the 10Y yield suffering its largest decline - of -7.6% - since November 2022 despite Fed officials tempering the timing of a possible rate cut last Friday. The 10Y and 2Y yields closed near 3.91% and 4.45% on Friday from 4.23% and 4.72% the week before. The odds of the Fed keeping interest rates steady at a range of 5.25% to 5.50% in March 2024 are 75% from 43% a month ago, according to the CME FedWatch Tool.
DXY fell this past week with the Fed’s dovish remarks hampering the index’s upside potential despite the stronger US Services PMI released on Friday with December Composite PMI climbing to 51 from 50.7 the month prior - Services PMI rising to 51.3 VS 50.7 expected. DXY wrapped up the week lower, near 102.59 from 103.98 the previous week.
Oil price inched modestly higher as prices benefitted from a softening of the US Dollar although markets remain cautious with looming signs of a weakening global demand. The WTI ended the week near $71.7, from $71.2 the week before. WTI price is back above $73 today on growing concerns over the security of oil shipments following the Red Sea ship attacks.
BTC and ETH are up today, with BTC exchanging near $42,610 as markets shift their focus to this week’s agenda with Thursday’s revision of the US Q3 GDP and the Philadelphia Fed manufacturing survey followed by Friday’s release of the Personal Consumption Expenditures (PCE) for November, the Fed’s preferred gauge of inflation, set to take center stage this week. Markets will also keep an eye on the final 2023 Michigan Consumer Sentiment Index on Friday as well as on a few corporate earnings with Accenture, FedEx and Nike set to report among others. In the rest of the world, investors will look forward to the BoJ’s rate decision on Tuesday with rates expected to remain unchanged although the institution has been inching closer to ending its negative interest-rate regime.
Client Profits
We took profits on ADA and RUNE and closed our positions on ETH, BTC, and LINK at breakeven to free up some cash to have more room to better DCA our major positions (short) on SOL and AVAX.
Presently, our cash position stands at 43% of our Assets Under Management (AUM) so we could work around our big positions in case BTC was to back-test 44k or even pierce 48k by the end of the year.
BTC
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ETH
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Other markets
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DXY
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US Treasuries
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Bitcoin | Stocks | $ Dollar New Update
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