The charts that matter: another big bitcoin crash


Welcome back.

This week we turn our weary eyes to foreign holidays, and specifically to the aviation sector. The idea that vaccines could get the virus under control has kept investors – and potential travelers – optimistic, and many airlines’ stock prices are on the rise again. Matthew Partridge takes a detailed look at the sector and picks the best placed stocks to buy now.

On this week’s podcast, Merryn speaks to one of our world’s favorite economists, Dambisa Moyo. She talks about the future role of corporations vis-à-vis governments at a time when public trust in large corporations – not necessarily fair, says Dambisa – is not particularly high. It also has a lot to say about the economic recovery (or lack thereof) from the pandemic, the strength of the Chinese economy, and the outlook for the UK and Europe. Hear what she has to say here.

This week’s Too Embarrassed To Ask video takes a look at Dogecoin, the cryptocurrency specifically designed to poke fun at the whole cryptocurrency thing that everyone is now taking seriously after some notable wins (and some big falls). Check this out here.

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

Now for the charts of the week.

The diagrams that matter

goldThe mini rally went on. One reason may be China’s persistent appetite for it, as Dominic Frisby explained earlier this week.

(Gold: three months)

The US dollar index (DXY – a measure of the dollar’s strength against a basket of currencies among its major trading partners) emerged towards the end of the week.

(DXY: three months)

The dollar’s recovery is reflected in the graph of the Chinese yuan (or Renminbi) – When the red line rises, the dollar is getting stronger while the yuan is getting weaker.

Chinese yuan to US dollar: as of June 25, 2019

(Chinese yuan to US dollar: since June 25, 2019)

The downward drift in the 10-year US Treasury bond yield Continued for another week.

US Treasury Department ten-year return: three months

(US Treasury Department ten-year return: three months)

The Yield on the Japanese ten-year bond also fell further.

Yield on ten year Japanese government bonds: three months

(Yield on ten-year Japanese government bonds: three months)

The Return 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)

copperThe positive vibe continued as it went back up and almost reached its final high.

Copper: nine months

(Copper: nine months)

The closely related Aussie dollars However, he didn’t seem to share his excitement and drifted down against the strengthening US dollar.

Exchange rate between the Aussie dollar and the US dollar: three months

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

Cryptocurrency Bitcoin fell this week – a much bigger drop than we’ve seen in the past few months. John explained in Money Morning yesterday how US President Joe Biden’s plans to raise taxes on “the rich” might have anything to do with it. If you missed it, read it here.

Bitcoin: three months

(Bitcoin: three months)

US initial weekly jobless claims fell again – 39,000 to 547,000 from 586,000 last week (revised from 576,000). This is the lowest number of claims since March 2020. The four-week moving average fell to 651,000, a decrease from 27,750 from 678,750 (revised from 683,000) the week before.

US initial jobless claims, four-week moving average: as of January 2020

(U.S. initial jobless claims, four-week moving average: since January 2020)

The Oil price seems to be on the way up again.

Brent crude: three months

(Brent crude: three months)

Amazon continued its humble retreat from its recent high.

Amazon: three months

(Amazon: three months)

While Tesla continued to step on water.

Tesla: three months

(Tesla: three months)

Have a nice weekend.