The dollar is still the dominant trading currency

The tri-annual currency survey is out, and some may be surprised by the results. The US dollar remains the dominant trading currency. It is involved with 89.2 percent of turnover, up slightly from 88.4%. Nevertheless, there is an increase in CNY trading to 8.5 percent from 7 percent. This increase is coming at the expense of GBP and EUR trading.

Overall trading volume is higher, despite the talk of deglobalization and reduced global trade, and the trading is more dispersed, with reporting banks representing less than 50 percent of the total trading.

 

FOMO cannot last forever

 

The overall equity market again showed positive returns with the SPX up 3.65% for the month and up 14.83% for the year. Following the market decline earlier in the year due to the tariff scare, the market has consistently moved higher, with the MAG 7 currently accounting for around 35% of the total market capitalization of the SPX. If you take out the MAG 7 the remaining stocks have almost flat-lined over the last decade as displayed in a Goldman Sachs graph.

The talk of bubbles abounds as it should, but there is also the FOMO effect. FOMO affects all investors who have not invested in MAG 7 and wish they had. FOMO is a by-product of a bubble. FOMO keeps bubbles alive, but like all bubbles, it cannot last forever. If you have FOMO, then it is likely too late.