If you just woke up and are wondering what's happening with the markets, grab a cup of tea and buckle up.. let me explain:
🧵 What has really happened in the markets?

▶️ USDJPY is down 0.85% today and down 10.31% from 3rd July. The Yen has strengthened after the surprise 15ps rate hike to 0.25%.

▶️ Bitcoin is down 7.66% today after making some recovery. It was down 11.5% earlier today. Compared to last week's high, it is down 22% from$70k to $54.6k. Other cryptos are dumping harder.

▶️ The Nasdaq is down 2.13% today and down 13.25% from it's all-time high recorded on 11th July 2024. This is officially a correction and if it extends the losses to 25% drom, now we will enter a crash territory.

▶️ Last week on Friday, Warren Buffet declared that Berkshire sold 55.8% of its Apple stocks in Q1 and Q2. That's about 505 million shares.

▶️ Japan's Nikkei 225 index is down over 2% this morning. Last week on Friday, it dropped over 5%. The index is down about 20% since its all-time high of ¥42,493 on 11th July.

▶️ The Tokyo Stock Price Index (TOPIX) is down 5.73% today and down over 17% in the last 30 days.

▶️ The Korea Composite Stock Price Index (KOSPI) is down 5.55% today and over 11% in the last month.

▶️ The US 10-yr treasury is down -0.015 to 3.779% today. It was at 5% on 19th Oct 2023, and 4.7% in April this year.

If you are a beginner trader, you don't need to memorize all these candlestick patterns. Here's what you need to know:
🧵1/n A candlestick is a graphic representation of a summary of what price did within a defined period. E.g. a daily candlestick will show you the opening, closing, high, and low price for that day.

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Debunkng the Silicon Valley Bank (SVB) saga

Why did the SVB bank collapse? How does that affect the markets? What happens next?

Thread*
1/n It all starts with the Obama and Trump era when interest rates were suppressed to near zero and the stock markets rallied. The bull run created a lot of money looking for places to invest. Venture Capitalists established strong firms.

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Where is the yield coming from?

Take some time to think about this:
1. Kenyan 10-yr bond is yielding 14.3%
2. Commercial bank deposits are yielding 6-8%.
3. Sacco deposits are yielding 8-11%
5. Money market funds close to 10%.
4. Mobile banking apps..

Thread*
1/n Every financial institution in Kenya is offering some form of return if you agree to pack your money with them for a year or more.

The return from 99% of them are equal or below the 10-yr yield and very close to the inflation rate which read 9.2% in Feb.

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Things to know in the markets this week:

1. The US dollar index is up 1.27% on its first day of trading in 2023. It rallied from 103.22 to 104.54 representing a strong start for the USD as banks resumed business following a series of bank holidays during the festivities.
🧵 The EURUSD and GBPUSD pairs took the limelight as they broke lower on strong momentum and trading volume. The pound has however recovered most of the losses so far.

A 15% hike in electricity prices in Kenya will mean the following for the markets:

1. Reduced consumption of electricity and perhaps lower revenues for Kenya Power. Kenyans will get more economical with power and others will seek alternatives.

Thread*
1/n 2. Kenyans will be spending relatively more money on energy without an increase in their incomes. This implies less demand for consumer discretionary products.

NSE stocks in the consumer discretionary sector will take a hit.
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The advantage of being a FOREX trader in Kenya..
The sessions work for you.

Thread*
1/n The least volatile sessions happen when we are asleep. That's the Sydney and Tokyo sessions.

The Sydney session starts at midnight and ends at 8:00 a.m. This is when Australian and New Zealand banks are most active. AUD, NZD, and JPY pairs are most active in this session.

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Kenyans idea of investing in business:

0-100k: Bodaboda, mitumba, Mpesa, corner shop, street food..

100-400k: Chinese accessories, boutique, cyber cafe, taxi, branding, milk ATM..

500k-1m: barbershop, salon, fast food, itel franchise, agent banking, wines and spirits..

1/n 1m-3m: Mabati rentals, matatu, clothing brand, ex-uk imports, sand lorries, large format printing, garage, farming..

3m-10m: Property development, buying and selling land, 2nd hand vehicles, government tenders..

10m-50m: real estate, government tenders, clubs

50m-100m: same

We are strongly committed to reducing inflation to our target rate of 2%.

-Jerome Powell, Fed chair It will take time before the effects of the 75bps rate hike are felt in the economy.

Things to know in the markets this week:

1. Earnings season is back - Top stocks to watch:
Tesla, Netflix, J&J, P&G, AT&T, Goldman Sachs, Blackstone, Schwab, Philip Morris, Verizon, Abbott Labs..

Thread*
1/n Inflation is still hot and more data is coming in this week.

1. NZD - CPI Tuesday 12:45 am
2. GBP - CPI Wednesday 9:00 am
3. CAD - CPI Wednesday 3:30 pm

Consumer price index is a huge data point when Central Banks are making monetary policy decisions.

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This is probably going to get me in trouble. Buying a piece of land for say KES 3M, constructing a house for say KES 4M will probably save you KES 120k per year and I think that's a waste of resources and an unsound decision. This applies for the youth.

1/n As a youth, within KES 7m, there's loads of projects you can do to generate over KES 120k per year with KES 7m.

You don't have to take the minimum. The illustrated example is 1.7142% return on capital invested.

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KRA is looking to raise taxes by adding an inflation adjustment of 6.3%. What does this mean?

Thread*
1/n By setting a target rate, say 16% VAT on goods, if a product sells at KES 100, the government takes KES 16. However, due to inflation, if for instance KES depreciates by 6.5%, the KES 16 the state collects will not have the same purchasing power 1 year down the line.

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Here is a couple of articles to help you grab some pointers on crypto.

https://twitter.com/FxPesaKE/status/1570424748856987651

forbes.com/sites/rufaskam…

If you are a beginner Forex trader, you may get a long list of news items that affect currency markets from various sources. In reality, it's just 1: Central Banks.

Let me explain:
Thread* Fiat currencies, such as the US Dollar, the Euro, and the Kenya Shilling are primariry issued by the respective central banks. These national institutions determine how much of your currency is in circulation, thereby determining its scarcity and price.

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The Kenyan voting system is very similar to a blockchain. Voting was decentralized to reduce the single points of failure. Let me explain how:

Thread*
1/n A team of returning officers running a polling station would be compared to a node with party officials serving as the consensus mechanism.

On the Blockchain, a node is a copy of the ledger (voter register).

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Safaricom's CEO @PeterNdegwa_ should know and agree that M-Pesa is no longer Safaricom's greatest product. The product is the PEOPLE.

Before y'all come firing at me, listen to me for a moment:

1/n M-Pesa operates as a technological infrastructure that allows Kenyans (+other countries) to store, transfer money p2p, remit across borders, and make payments to merchants.

M-Pesa charges are the highway toll fee and nobody likes those.

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Recency Bias: What is it and how does it affect traders?

It is a cognitive bias that favors recent events over historic ones; a memory bias. Recency bias gives "greater importance to the most recent event".

1/n E.g. If you move to Park City, Utah, and after careful analysis of the average snowfall in January over 10 yrs realize that you need a 4-wheel drive car, and then then the same year, the Jan snowfall is below par and u don't need a 4WD, recency bias would prompt you to sell

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As a young and inexperienced Forex trader, there is an innate urge to trade against the direction of the market. You want to catch the tops and bottoms and often get frustrated when what you thought was the top fails to be the top and the price goes higher.

Let's solve that

1/n First, let's define a top:

This is a price level that's overextended from, say, a bullish trendline, moving average, or any other technical indicator. A swing high point

The trader wants to execute a sell trade right at the top to optimize profit.
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If after careful analysis, you realize that the USD/KES rate is going up, you can go to bank or Forex bureau and buy a stash of USD. When the rate goes up, you can go back and sell your USD for profit.

That's FOREX trading 8n simpler terms.

1/4 In Forex trading, you don't have to move, you sign up, download an app, deposit via M-Pesa and get instant access to loads of global currency pairs that you can speculate on.

At the click of a button, you can buy/sell a foreign currency pair such as USD/JPY.

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What are the saddest truths in life?

1. Everybody dies.
2. Truth is relative.
3. Everybody is exposed to time and chance.
4. We are NOT equal.
5. To the core, we are intelligent ANIMALS. Well, not so intelligent.
6. Love is violent.
7. Some promises go unfulfilled.

Thread*
1/n Started out as a reply, but I thought it could be an awesome thread.

Here:

https://twitter.com/BeingPillar/status/1529856056377151489?s=20&t=lyzLeE1USa_SDQYoMg0wbQ

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How to become a full-time FOREX trader in 2022.

Thread*
1/n The idea of becoming a full-time trader in 2022 can be exciting, and maturing into a successful one can be very rewarding. However, being a full-time trader is not merely a case of changing the employment status of your LinkedIn profile.

Work must be done!

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