Far East Capital Newsletter
Sweaty palms as interest rate speculation dominates
6 Mar 2021

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Sweaty palms as interest rate speculation dominates

On the broader front the stock markets continue to be negatively affected by interest rate speculation that has caused them to retreat from their highs. Comments by Jerome Powell pushed bond yields to a 12 month high, above 1.6%, and 200% above the August lows and our Sentiment Oscillator has turn negative.

Once again there is no way of telling whether this is a correction and a consolidation or a major turning point, so markets will be dominated by a more cautious psychology that will involve profit taking for the immediate future.

The speculative end of the market has been very volatile this year, initially with spectacular gains that have been almost unbelievable, except that seeing is believing. The EV and alternative energy stocks went through a bubble that seems to have quickly run its course, judging by the heavy falls in the last two weeks. These sectors will have additional runs as the year progresses, but you will have to get your timing right. The next two weeks are more difficult to predict. Liquidity still holds the key to market movements. There continues to be plenty of it around. 

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