In his first podcast of 2021, Peter analyzed the unusual day on Wall Street and explored a significant question: are we beginning to see the decoupling in the global financial markets that he’s been predicting for years?
The major indexes opened up but then closed sharply down on the day. The Dow Jones set a new record before falling 382 points. The S&P 500 set a record and then dropped 1.5%. The NASDAQ started strong, although it didn’t set a record, but then followed the other indexes lower, closing down 189.8 points.
Meanwhile, the dollar continued to show weakness against the euro, the yen and particularly the Chinese yuan. The dollar dropped just over 1% against the Chinese currency. Peter called this move “extremely rare.”
This has happened occasionally, but it’s very rare to see this big a move in that particular pair. You’re more likely to see the dollar move 1% against the euro of the Aussie dollar than you will against the Chinese yuan. But to see it happen on the first trading day of the year — I look back for 30 years and I couldn’t find a single day, first trading day, where you saw this big a move, the US dollar dropping against the yuan.”
Peter said he doesn’t think this is an insignificant move. He thinks it’s the sign of something bigger happening.