Does Slow and Steady Win the Race?

A new report out of the UK today states that young workers in England will need to save as much as 20% of their paycheck in order to receive a pension that is 66% of their monthly salary once they retire.

This is nearly an impossible task for most, especially those with outstanding student debt.

My friends, this is unsustainable.

Janet Yellen has stated that we are not likely to see another financial crisis in our lifetimes. I have a feeling that she just isn’t seeing the bigger picture.

We hope that technology will be a major factor to improve the situation and raise living standards. We hope that blockchain can help improve the economy drastically but there really aren’t any guarantees there.

@MatiGreenspan
eToro, Senior Market Analyst

 

Please note: All data, figures & graphs are valid as of July 20th. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

Stock markets continue making new record highs as volatility remains near record low levels. Here we go again….

Most major stock indices around the world are up in the last 24 hours. The gains vary from region to region but most are between 0.25% to 0.5% in green territory.

Wall Street rejoiced at Morgan Stanley’s quarterly profits report yesterday. A much-needed win for the financial sector to wrap up a not so hot second quarter for the big banks.

The @TheBigBanks CopyFund that we set up a year ago has seen tremendous growth since inception. However, since the beginning of the year has been more or less flat.

This chart shows the CopyGund in blue against the S&P500 in green. Does slow but steady win the race?

Bank of Japan

Just as I’m writing to you the Bank of Japan Governor Haruhiko Kuroda is wrapping up his monetary policy statement. No major changes, just a minor tweak in inflation forecast.

Kuroda managed to soften the Yen just a bit but overall sounded very upbeat. Most of the central banks of the world are currently on a path to tightening their monetary policy but the BoJ seems very happy to continue beating their bonds into submission.

Japan remains the most aggressive central bank in the world at the moment in their effort to weaken the Yen. Indeed, I have a feeling that their decision to legalize bitcoin may have been in part with the goal of keeping the Yen weak.

Here we can see that the USDJPY is at a critical junction. Near the center of the range (blue lines) if Kuroda manages to cause a turnaround today, he could conceivably create a new support line on the dotted yellow line, which could in turn, lead to a breakout of the top blue line at a later time should the Yen continue to weaken.

What else?

Ethereum up 50% from its lows on Sunday!

Though the crypto market is in red so far this morning, we’re certainly up off the lows by now.

The president of the European Central Bank will be speaking today at their interest rate decision meeting. Most analysts expect this meeting to be a bore. No change in rates or outlook with the consensus expecting changes next month.

Conceivably, Mario Draghi could decide to give us a bit of a surprise today so it pays to pay attention.

As always, let me know if you have any questions or comments and keep up the great feedback!

This content is provided for information and educational purposes only and should not be considered to be an investment advice or recommendation.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.