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Victor Adair

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Victor Adair, author of The Trading Desk Notes, began trading penny mining shares while attending the University of Victoria in 1970. He worked in the mining business in Canada and the Western United States for the next several years and also founded a precious metals trading company in 1974. He became a commodity broker in 1977 and a stock broker in 1978. Between 1977 and his retirement from the brokerage business in 2020 Victor held a number of trading, analytical and senior management roles in Canada and the USA. Victor started writing market analysis in the late 1970’s and became a widely followed currency analyst in 1983. He started doing frequent media interviews in the early 1980’s and started speaking at financial conferences in the 1990’s. He actively trades his own accounts from The Trading Desk on Vancouver Island. His personal website is www.VictorAdair.ca.

Victor Adair Blog - The US Dollar rallied against virtually all currencies over the past two weeks The US Dollar Index hit a 20-year high last September but then trended lower (down ~12%) to support levels ~101. Net speculative positioning was very bullish on the USD leading up to the September 2022 highs. It had turned very bearish at the recent […]

Victor Adair Blog - Megacap tech continues to provide nearly all the YTD gains for the broad stock indices While small-cap stocks continue to underperform the broad indices and Megacap tech. Bullish stock factors: the recession has been postponed, and strong labour markets mean buying power for consumers, which means pricing power for corporations. We are at or near peak […]

Victor Adair Blog - Wicked bipolar sentiment swings across asset classes this week The DJIA was upbeat early Monday, building on last week’s late rally and hit 12-week highs. But then, more bad news from the banking sector started to spread, and the DJIA closed at the day’s lows. The banking worries intensified as the days passed (KRE fell to two-and-a-half-year […]

Victor Adair Blog - Without Megacap tech, stock indices have gone nowhere The broad stock market indices tumbled to new April lows Tuesday and Wednesday, but a strong surge on Thursday and Friday, fuelled by soaring Megacap tech, lifted the indices to new highs for the month. The Nasdaq 100 had its best monthly close since March 2021, with MSFT up ~40% […]

Victor Adair Blog - Stock indices stuck in a narrow range For most of April, the premiere American stock indices have been stuck in a narrow range as economic data and Fed speakers deliver mixed signals. Volatility metrics are at or below one-year lows, and some folks view 5%+ money market yields as a better investment than stocks. While American indices drift quietly sideways, European, Japanese […]

Victor Adair Blog - Who’s going to be right, and who’s going to be wrong? Federal Reserve speakers continue to deliver “mixed messages” about future Fed activities/policies. Some speakers have been calling for a “pause,” while others (most recently, FOMC Governor Chris Waller) believe monetary policy needs to be tightened further. On Friday, Waller said, ” Because financial conditions have not […]

Victor Adair Blog - Will the Fed choose financial stability over fighting inflation? Markets have been trying to guess when the Fed will stop raising rates for months. There are several “reasons” why the Fed might change policy, including “something important breaks,” the economy goes into recession, and/or inflation falls.   But it seemed that every time investors expected the Fed to […]

Victor Adair Blog - Supercap tech stocks soar, leaving the rest of the stock market behind The Nasdaq 100 is up ~24% from its early January lows to a 7-month high; the S&P is up ~8%, the DJIA is up ~1.5%, and the TSE is up ~3.5%. AAPL and MSFT are up >30% from January lows; TSLA and NDVA are […]

Victor Adair Blog - Classic signs of stress across financial markets The banking sector has been the epicentre of the “stress” which started over a month ago in the USA and then spread to the Eurozone. A couple hundred billion dollars worth of deposits have apparently left the banks in search of “safe havens,” and bank share prices have fallen. Canadian […]

Victor Adair Blog - Things break when interest rates have been near zero for more than a decade and then rise ~5% in less than a year! Today’s blog will focus on price action across markets; I’ll avoid commenting on “what’s wrong with banks;” thousands of new social media experts have already exhausted that subject. Interest rates declined in […]

Victor Adair Blog - Break something? The Fed has been raising interest rates for the past year to bring inflation down to its target range of ~2%. For the past several months, the market has been trying to guess “what would have to happen” for the Fed to either slow their pace of raising rates, stop, or start cutting rates. […]

Victor Adair Blog - The DJIA hit a 4-month low on Wednesday but then bounced – as fears of “higher for longer”interest rates diminished The 2-year Treasury yield hit a low of ~1/10th of 1% in August 2020 as the Fed slashed interest rates to counter the Covid Crisis. Some commentators suggest those were the lowest rates in 5,000 years. […]

Victor Adair Blog - Interest rates keep rising Incoming inflation data has been hotter than expected; forward markets are now pricing another 75bps increase from the Fed (25 bps at each of the March, May and June FOMC meetings), taking the terminal rate to ~5.4% by August, with modest declines from there into year-end. Short rates in June are […]

Victor Adair Blog - Interest rates rose again this week; stocks, bonds and gold fell while the US Dollar rallied I began last week’s Notes by pointing out that markets had been “fighting the Fed” for the past couple of months by expecting the Fed to “pivot” – to start cutting interest rates – by mid-2023 despite repeated warnings from Chairman Powell that the Fed […]

Victor Adair Blog - Key Turn Date – February 2, 2023 – The Fed Will Be Higher For Longer The market was “Fighting the Fed” for the past couple of months – the forward short-term interest rate market was pricing the Fed to stop raising rates in Q2 and to cut rates by ~50bps by December 2023 (and by ~200bps by […]

Victor Adair Blog - FOMO Alert! The Nasdaq had its highest weekly close yesterday since September, up ~13% from the 27-month lows made last October. This week’s close was 28% below the All-Time High made in November 2021. Inflation is falling and is expected to keep falling, so the Fed is expected to increase short rates (only) 25 bps this […]

Victor Adair Blog -   The Anti-dollar trade Last week I wrote: Gold bugs have believed for years that gold is the original Anti-dollar, but lately, the Euro currency has become known as the Anti-dollar…If a currency trader has a negative view of the USD, buying EURUSD is the go-to trade.   But if a trader/investor had a negative view of […]

Victor Adair Blog - Markets are expecting the Fed to cut rates this year, but the Fed says, “Don’t count on that.” This is the current SOFR (Secured Overnight Financing Rate) forward curve. It trades at a discount to par (zero interest rates), so a price of 95 implies a 5% rate. This chart shows that the market expects […]

Victor Adair Blog - “What’s the Fed going to do?” was the Big Question in 2022, but it won’t be the Big Question in 2023 The Fed raised short-term interest rates aggressively in 2022. The yield on the 2-year Treasury soared from ~0.9% in early January to ~4.7% in November – the highest yield in 15 years. Looking one […]

Victor Adair Blog - The Financial Times: Global Stock and bond markets lost more than $30T in 2022 The S+P more than doubled (up ~120%) from the Covid Panic lows in March 2020 to the All-Time Highs in January 2022 as a combination of aggressive monetary and fiscal policies flooded markets with “money,” drove risk assets higher and spawned unforgettable acronyms like […]

Victor Adair Blog - Market sentiment: the Big Question has changed For the past several months, the Big Question has been, “When will we get Peak Fed?” The sentiment was that Peak Fed would be a “green light” buy signal, and risk assets were bid up in anticipation of that magic moment arriving.   More recently, another Big Question began to weigh on market sentiment, “When will […]

Victor Adair Blog - Crude oil and gasoline prices hit 12-month lows WTI, Brent, and Nymex gasoline front-month futures traded at their lowest prices in twelve months this week. Crude oil intra-market spreads also demonstrated weakening demand, with nearby months now in contango (prices for deferred delivery are higher than spot prices) after more than two years of backwardation. Share […]

Victor Adair Blog - Markets react to a “slowing” Fed Leading up to Powell’s scheduled Wednesday speech, some market participants were likely positioned for a re-appearance of “tough-guy” Powell – the man on a mission to bring down inflation and damn the consequences.   But Powell sent those participants scrambling to reverse their positions when he said, “it makes sense to moderate the […]

Victor Adair Blog - The DJIA closed at a seven-month high this week The DJIA closed higher for seven of the last eight weeks. It rallied ~5,600 points (19%) from its two-year lows on October 13 and is now only ~7% below its January All-Time Highs. All of the stock indices had a terrific rally from the March 2020 Covid […]

Victor Adair Blog - The “too far, too fast” moves have stalled In several of my Notes over the past few months, I’ve made the point that traders have been hunting “Peak Fed Hawkishness” – because they believe that will the best time to “Buy The Dip.” I’ve also made the point that they’ve been hunting for that “magic moment” without success – because Jay […]
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