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Win a THORWallet Premium card. 🎁
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1️⃣ Follow @THORWallet + repost
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Key Events This Week:
1. Weekly ADP Employment Change data - Tuesday
2. September S&P Manufacturing PMI data - Wednesday
3. September S&P Services PMI data - Wednesday
4. August New Home Sales data - Thursday
5. August Durable Goods Orders data - Friday
6. Total of 8 Fed Speaker Events This Week
All eyes are on oil markets this week.
The bull market is gaining momentum:
The 200-day moving average of the S&P 500 has now risen for 329 consecutive trading sessions, the 4th-strongest streak over the last 10 years.
This follows a previous 460-session run that briefly ended in April 2025 following "Liberation Day," bringing the combined streak to ~800 sessions, which would be the 3rd-longest since 1990.
For perspective, the longest such stretch lasted 1,448 days during the 2000 Dot-Com Bubble.
Historically, when the 200-day moving average was rising, the S&P 500 returned +8.5% per year on average since 1999.
By comparison, when the 200-day moving average was falling, the S&P 500 returned just +0.1% per year on average.
History suggests the bullish trend is far from over.
Investors are taking on more currency risk:
The exposure-weighted average currency hedge ratio across 6 major markets, including Japan, Canada, and Taiwan, is down to just 41%, the lowest since at least 2015.
This ratio measures the extent to which investors hedge against currency movements, meaning ~59% of their exposure was left unhedged.
This is happening even as hedging becomes cheaper, with 3-month US Dollar hedge costs for Yen-based investors falling to a 4-year low of 2.75%, from as high as 6.00% in October 2023, while costs for Euro-based investors declined to a 2-year low of 1.32%.
Investors have reduced their hedges as the US Dollar historically tends to remain resilient during periods of market volatility.
However, the case for staying unhedged is starting to weaken, as hedging becomes cheaper while the Dollar’s safe-haven appeal comes under pressure and concerns over currency debasement grow.
As a result, these investors, who collectively hold trillions in US assets, have little protection against a weaker US Dollar if the current trend continues.
Investors are increasingly exposed to US Dollar weakness.