This week on Wall Street, markets are buoyant after record highs, with key events including the Federal Reserve's policy meeting, inflation and jobs reports, and a busy earnings season with major companies like Amazon, Apple, and Microsoft reporting. Investors will watch for economic indicators to gauge the Fed's next move amid ongoing economic recovery and inflation concerns.
The current correction in the S&P 500 ETF Trust (SPY) is likely just the beginning, according to an analyst. While some attribute the correction to seasonal factors, the author argues that macroeconomic data and fundamentals suggest a bearish outlook. Consumer confidence has declined, indicating a potential economic downturn, and the equity risk premium is low. Rising interest rates may lead to a slowdown in economic growth and pose challenges for growth stocks. Despite potential upside risks, the author maintains a sell rating for SPY in the medium term.
Bitcoin's recent rally above $30,000 is supported by strong macroeconomic data, but investors are questioning its sustainability. However, Bitcoin derivatives metrics show no excessive leverage from longs, indicating a healthy market structure. Professional traders have kept their leverage long positions unchanged, and Bitcoin futures traders have not added leveraged bullish positions. Therefore, BTC price can easily rally another 10% to $33,000 given sellers are currently scared to short it.
