Get started

Newsbackground

Moderna, BitCoin records, China, OPEC and IndiaFollowing Pfizer, another pharmaceutical company (Moderna) is filing for US vaccine registration. At the same time, the company noted that its vaccine is 100% effective in severe disease. United Airlines, meanwhile, transported the first shipment of Pfizer's Covid-19 vaccine from Brussels to Chicago O'Hare International Airport. Against the background of this information, buyers of cryptocurrencies and Bitcoin in particular experienced another heightened optimism. This resulted in new all-time highs for Bitcoin. Despite the apparent madness of what is happening in general, it fits into the general outline of the behavior of financial markets in recent times. China, as usual, added some optimism to the markets yesterday, when reported an increase in manufacturing activity in November, which became the ninth month of growth in a row. We are talking about the purchasing managers index in the manufacturing sector (PMI) for November (52.1 against the forecast of 51.5). India tried to return the optimists to the ground. Its economy at the end of the third quarter (GDP decreased by 7.5%) confidently entered the stage of a technical recession. On Monday, the UK and the European Union warned each other that time is running out for a Brexit trade deal. The funniest (or saddest) thing is that one of the key stumbling blocks - fishing - provided only 0.03% of the British economy in 2019. That is, Britain may fail the deal with the price of a trillion in trade turnover because of 0.03% of GDP. Since this is beyond common sense, we continue to believe that the sides will reach an agreement, which means that the pound will receive its injection of positive and a reason for growth, albeit short-term. The OPEC meeting was unsuccessful yesterday and should continue today. Although some reports have postponed the talks until Thursday, as key players continue to disagree on how much oil they should pump amid weak demand due to the coronavirus pandemic. Sources said that Russia has offered OPEC + to start increasing production by 0.5 million barrels per day every month since January. Obviously, against the background of such information, oil can only be sold.
TVC:USOILShort
by Trade24Fx
Week in a Glance: AstraZeneca, risky assets and NPP aheadLast week has traditionally started with the vaccine news. This time, AstraZeneca reported effectiveness of 70%, but for a half dose, that is, potentially by increasing the dose, it is possible to bring the effectiveness to 90% +. Why is AstraZeneca important? The fact is that this particular vaccine claims to be the most massive in the world. With a price of $ 4-5 per dose, as well as ease of distribution (you can store in an ordinary refrigerator), the AstraZeneca vaccine has the largest market capacity - about 4 billion doses worldwide. That is why the financial markets perceived the information from AstraZeneca very positively. As a result, a massive exodus from safe haven assets to risky assets began. Bitcoin almost reached 20K, Musk became the richest person on the planet after Bezos, stock markets rushed to new all-time highs, greed level reached 92 out of 100 (CNN's Fear and Greed Index). In our opinion, markets have traditionally passed off wishful thinking and tomorrow (which may not exist) as today. After some skepticism about the results from AstraZeneca surfaced, the company announced additional global testing. In general, it is worth recalling that the massive use of vaccines will not begin until the third quarter of 2021, which means that, given the planned seasonality of the pandemic, you should not expect a radical solution to the problem before summer. So, the last week's gain is extremely unstable. Actually, losses in the cryptocurrency market on Thursday from 15% to 30% for various tokens confirm this. That is why our position is unchanged: we sell risky assets, as well as oil, and buy gold. The coming week may be decisive for the oil market. OPEC + meets on Monday-Tuesday. Markets have already fully incorporated into the current price the fact that from January the voluntary production cuts will not change and instead of the planned 5.8 mln b/d it will remain at 7.7 mln b/d. The point is that the fact is not yet there. In addition, statistics on the US labor market will be published at the end of the week. Given that November turned out to be an exceptionally pandemic month, there is every reason to expect weak data, which may remind financial markets that the present is not as cloudless as it seems to them.
TVC:USOILShort
by Trade24Fx
Thanksgiving Day in the cryptocurrency marketIn yesterday's review, we warned that a thin market in the face of a significant number of bubbles in financial markets could provoke spikes in volatility or even flash crashes. If you look at the results of Thursday for the cryptocurrency market, it seems that we were not so far from the truth. Ripple lost about 25% (!) during a day, Bitcoin and Ether about 15%. And while other bubbles are still with us, ranging from Tesla and Nio to the US stock market in general, it is quite possible that the markets are starting to feel shortage of "fools" with all the ensuing bubbles. Among other news, it is worth noting the extension of restrictive measures by Germany until December 20 against the background of a record number of cases, which exceeded 30K per day. Germany did not tighten the measures, but the experience of the same France shows that with a sufficient level of severity it takes only 3 weeks to take the situation under control. Consumer confidence, meanwhile, is declining in both France and Germany. Exxon Moblie is gearing up for tough times. They revised their own estimates of oil prices in the next decades by 11% -17%. The company expects the damage from the pandemic to persist for much of the next decade. Britain and the EU continue to negotiate a trade agreement. So far, traditionally, it has been unsuccessful, exchanging mutual threats. European Commission President Ursula von der Leyen said Thursday that the EU is ready for the possibility of Britain leaving the bloc without a new trade agreement. Britain in turn said that they did not need a deal "at any cost". Nevertheless, according to the participants in the negotiation process, its end is close. According to one information about the success of the negotiations will be announced at the weekend, according to the other - next week. Let us recall our trading plan for this case. We wait for positive news, being long in the pound, after that we wait 1 or 2 days to work out the news, fix the profit on the long position and simultaneously open the short one.
NYSE:NIOShort
by Trade24Fx
ECB, US data and Thanksgiving DayToday is a holiday in the United States (Thanksgiving Day). So, the markets will be “thin”. Low liquidity is a great opportunity for those looking to crash the market. Moreover, there is something to collapse: from the cryptocurrency market bubble to the US stock market. And in this case, even a formal reason for the start of the movement is not needed. Just a light kick on days like this is enough to trigger the flash crash mechanisms. The ECB tried to remind markets yesterday that the reality is not as joyful and cloudless as it seems this week. The Central Bank of Europe has warned that European banks may face a wave of defaults on loans, and in order to somehow protect themselves from this, banks are advised to increase reserves. In addition, the ECB said that the some assets may collapse at any moment. Yesterday's data from the US (which had a double doze due to the weekend today) also tried to bring the markets back to the ground. Primary unemployment benefits came out much worse than forecasted and higher than the previous value. That is, the outbreak of a pandemic in the United States, despite the absence of a full-fledged lockdown, does not go unnoticed for the economy. US GDP for the third quarter was left unchanged. France, meanwhile, said it would start collecting a tax on digital services. So digital giants like Amazon, Facebook and others can get their wallets ready. According to official data, oil stocks in the United States decreased by 0.75 million, which, due to the insignificance of the number, should not be interpreted as a signal of a deficite in the oil market. The fate of the oil itself, apparently, will be decided at the OPEC + meeting November 30 - December 1.
FOREXCOM:XAUUSDLong
by Trade24Fx
Bubbles are growing, Musk is richer than GatesThe start of the week was again marked by a sharp jump in the level of greed in the financial markets. Just take a look at the CNN Fear and Greed Index to be convinced (the index is in “extreme greed” zone). Naturally, this provoked a massive exodus from safe-haven assets (gold alone lost over $ 75 per ounce in a couple of days). Well, if it has disappeared somewhere, it must arrive somewhere. The markets do not even try to be selective, to give preference to relatively undervalued assets. On the contrary, the most overvalued and overbought assets are bought. Bitcoin approached 20K, Tesla - 550 (as a result, Musk overtook Bill Gates and became the second richest man in the world). And nobody worries that even less than a year ago, they did not give 4K for the same Bitcoin, and $ 75 for Tesla (price adjusted for the August split). In general, there is nothing criminal about the rise in asset prices. But what has changed in the world of cryptocurrencies? Were they allowed everywhere, and became full-fledged and commonly recognized payment instruments? Or maybe Bitcoin was introduced as a payment instrument in Google or Facebook? Maybe Testa has increased production tenfold and become a world leader in car production? The answers are too obvious to be voiced. But the saddest thing is that no one asks these questions. People buy assets simply on the basis of the principle: growth was yesterday and it will be today and it does not matter why it happens, the main thing is: it happens. The outcome of this approach is obvious. It has been clear since the 17th century, when the Dutch were no less active in buying tulip onions than Bitcoin is now. But nowadays very few people study history. In the US, meanwhile, Trump, though reluctant, admits defeat and prepares to leave the White House. Biden continues to form his team. The appointment of former Fed chief Jannette Yellen as Treasury Secretary seems like a good idea. Today a large set of statistics from the US will be published. The fact is that tomorrow in the States the official holiday (Thanksgiving Day). So, the data is published for two days at once. It includes revised figures for the US GDP, as well as data on durable goods orders and jobless claims, personal income and new home sales.
Short
by Trade24Fx
2
Another Groundhog Monday, JPMorgan Chase predicts collapseFor the last three weeks on Mondays, we've seen variations of the same thing. Two weeks ago on Monday, Pfizer announced 90% + effectiveness of its vaccine. Moderna said last week on Monday that their vaccine is 94.5% effective. And yesterday the British AstraZeneca made its contribution to the Monday vaccine race news. Their vaccine, however, turned out to be weaker - just over 70%. But on the other hand, you can add to the dose and increase the effect. Plus, the vaccine from the British is much cheaper and as simple as possible in terms of storage and transportation (it can be stored in usual refrigerator). If the Pfizer vaccine costs forty dollars (for two doses needed for the effect), then an injection from AstraZeneca will cost 4-5 dollars. As usual, the markets reacted extremely positively to this information: safe-haven assets were losing value (dollar, gold, yen fell in price, and the yield on US Treasury bonds grew). If you believe the analogies, then today the attention of the markets will switch to numbers for sick and lockdowns, and we will see reverse price processes. For example, Canada's largest city, Toronto, with a population of 3 million, is in lockdown for 28 days. Moreover, the latest data on business activity in the Eurozone (for November) drop below 50, that is, business activity in the service sector is declining (for the first time in the last 5 months). Against this backdrop, France and the UK announced a gradual easing of restrictions because of significant progress in the fight against the pandemic. JPMorgan Chase predicts a local collapse of the global stock market. They base their predictions on simple calculations: traditional investment funds tend to maintain a 60 to 40 distribution between stocks and bonds in their portfolios. But due to the sharp rise in stock prices, the proportion has been distorted recently and stocks dominate. If, by the end of the year, investment funds decide to return to the basic ratio of 60 to 40, they will have to sell off shares for about 300 billion. It is unlikely that the market will be able to “eat” such a volume without consequences. There was a local turmoil on the oil market yesterday related to the information of a military strike by Yemeni Houthi rebels on an oil storage and distribution center in Saudi Arabia. And although the information has not yet been officially confirmed, all this is very similar to the events of a year ago, albeit on a much smaller scale.
DJ:DJIShort
by Trade24Fx
Week in a Glance: between vaccines and lockdownsIn the last couple of weeks, the markets have been torn between two topics: news from the vaccine race and the epidemiological situation in the world and the United States. Moderna said its vaccine is 94.5% effective, and final test results for the COVID-19 vaccine developed by Pfizer Inc. showed it is 95% effective. At the same time, the FDA (US regulator) will consider the issue of the Pfizer vaccine for emergency use on December 10. Recall in this light that Pfizer's revenues from vaccine sales in 2021 may grow by $ 10+ billion, so the company's shares are a good candidate for purchases. Despite such a clear positive, stock markets were unable to continue their growth. The fact is that it will take months before the large-scale vaccination begins. In addition, the current situation with the pandemic in the world and in the United States, in particular, is extremely threatening. Over the past two weeks, the number of hospitalizations due to COVID-19 in the United States jumped by almost 50% and reached a record value of about 80,000. Against this background, local authorities continued to tighten measures to restrict social activity. So, this week we will continue to look for sell opportunities in the US stock market. An interesting event of the past week was the decision of the Central Bank of Turkey to raise the rate at once by 4.75%. Now it has reached 15%, which can naturally lead to the formation of a carry trade in pairs with the Turkish Lira. It makes sense to think about mid-term purchases of Turkish Lira. Another news of the week was the information that Tesla will join the S&P 500 on December 21. Quite naturally ($ 11.2 trillion Index funds would have to include Tesla shares in their portfolios) Tesla shares jumped, keep on blowing an already huge price bubble. Given that at the end of the week the question of stimulus in the US resurrected again, and the UK and the EU were again unable to complete negotiations (this time due to the coronavirus disease of one of the EU negotiating group members), stimulus in the US and Brexit that could become top topics of the current week.
DJ:DJIShort
by Trade24Fx
Surprise from Turkey, carry trade and pandemic chroniclesPerhaps the main event of yesterday was the rate hike by the Turkish Central Bank. This is not the key Central Bank of the world. However, it is not typical that the Central Bank from a G20 raises the rate by 475 (!) basis points. As a result, the rate became 15% and this is already more than a serious reason for the emergence of a carry trade in pairs with the Turkish lira. And if Turkey does not scare away investors, then the lira has every chance of forming an upward trend in the foreseeable future. Especially when you consider that China this week placed government securities at a negative rate. This has never happened before for emerging markets to be placed in the minus. 2020 has once again confirmed its uniqueness. So, Turkey looks like an even stronger contrast against this background. Considering that there is too much money now (just take a look at the bubbles in the stock markets, the US housing market, and the cryptocurrency market), the temptation to get instead of minus 0.15% plus 15% might be too great to resist. But in general, the pandemic continues to attract the attention of the markets. Optimists are watching the vaccine race (the AstraZeneca Plc vaccine has sparked strong immune responses in the elderly, and Moderna Inc. begins production of its vaccine in Europe later this month). Pessimists - for the news of lockdowns and figures on the number of cases, hospitalized and deaths. The number of hospitalizations due to Covid-19 in the United States is record in 28 states. California has declared a curfew. At the same time, schools were closed in New York, and New York subway is operating at 25% of its capacity and is going to be reduced by 9,000 people, which will lead to a reduction in transit services by 40-50%. Yesterday's data on jobless claims in the US came out rather mixed. Continuous claims are still decreasing, but the initial ones stopped the positive trend and began to grow. In general, these data don't seem like a reason for joy.
Short
by Trade24Fx
Pfizer again, plus some Boeing and BrexitAfter the US elections, the focus of the markets shifted to the pandemic and news from the world of vaccines. So the news of the day again was the information about the final results of the COVID-19 vaccine trial from Pfizer Inc. Recall, according to preliminary data, the effectiveness of the vaccine was 90%. Since then, Moderna has announced that their vaccine is 94.5% effective. But according to the final results from Pfizer, the effectiveness of their vaccine is 95%. Most importantly, since testing is complete, Pfizer is about to apply for a US emergency acceptance. According to Pfizer, the vaccine committee meeting will take place in December. That is, about a month remains to wait until an officially approved and effective vaccine appears on the shelves. But do not forget that it will be months (rather quarters), before its widespread use begins and a turning point in the pandemic takes place. US regulators intend to allow the Boeing 737 MAX to fly again after a nearly two-year pause. As a reminder, this aircraft was Boeing's most financially successful until two fatal crashes in 2018 and 2019. But given the scale of the crisis in the airline industry and its rather bleak prospects, the news failed to trigger a steady rise in Boeing's stock. Note that just a few days ago Bill Gates said that according to his forecasts, after the pandemic, the number of business trips will decrease by more than 50%. Before the pandemic, it was business travel that accounted for half (!) of US airlines' revenues. It is reported that France has agreed that its fishing rights in UK waters will be limited after the end of the transition period on 31 December. Note what exactly is one of the most serious obstacles on the way to a Brexit deal.
NYSE:PFELong
by Trade24Fx
Tesla in kings, US data and local lockdownsOn December 21 Tesla wil be included in the SP500 index. The decision is rather strange, but, apparently, deliberate (in September, the index committee had already refused to include the company in the index, but now they have decided to do this). It's strange because it creates purely technical difficulties for the index committee - Tesla, with its capitalization near $ 400 billion, creating an imbalance in the index. It's strange because now index funds and ETF funds (with total assets up to $ 11 trillion) will have to buy Tesla shares even if they really don't want to do it. It's strange because Tesla is a classic price bubble that is about to burst and what will happen to the entire index because of this we don't even want to think about (nothing good for sure). In general, it is not clear why SP did this, but they did. Meanwhile, the head of the investment company Hercules Investments, James MacDonald, said he expects the S&P 500 to decline by 20% in the near term. In principle, just the collapse of the Tesla bubble may be enough for this. Yesterday's data on retail sales in the United States was not very encouraging. They rose 0.3% in October (after rising 1.6% in September). It is obvious that the situation will deteriorate further. Since the executive branch in the United States is partially paralyzed due to the results of the elections in the United States (Biden cannot do anything yet, and Trump no longer wants to), one cannot count on a nationwide lockdown. But local authorities are increasingly tightening measures in a desperate attempt to stem the rise in the number of cases. Against the backdrop of such news, the optimism caused by the news from Moderna has somewhat faded. Accordingly, the growth of stock markets stopped, as well as oil prices growth. But it is too early to talk about any kind of reversal. However, we note that the fundamental background for this is more than favorable. US Oil stocks according to API increased by 4+ mln barrels. This is not something gamechanging. But still, additional reason to sell Oil from the current prices.
NASDAQ:TSLAShort
by Trade24Fx
New injections of optimism and the deal of the centuryLike last week, this one started with news from vaccine developers. And if last Monday it was Pfizer with its 90% efficiency, then yesterday Moderna was the generator of optimism. Its vaccine is 94% effective. But at the same time, unlike the Pfizer vaccine, which must be stored at -80 degrees, the product from Modern can be stored in usual home refrigerators. This means that it is easier and more convenient to use it. The data from Japan and China added optimism as well. Japanese GDP in the third quarter grew by 21.4% (forecasts was 18.9%). China reported growth in industrial production and retail sales (even compared with the same period last year). Another reason for the uplifting mood was the news that China and 14 countries of the Asia-Pacific region signed on Sunday the largest trade agreement in the world (covering almost a third of the world's population and global gross domestic product). That is, the markets have a feeling that things are not so bad now, but in the long term everything will be great for sure. We continue to consider this position to be at least premature. Europe in lockdown (full or partial). As a result, for example, the freeway operator Vinci reported on Friday that traffic in Europe dropped 48% in the first full week of November. And with China, everything is far from so simple. In the corporate sector, defaults on debts are growing. Even state-owned companies, which were previously considered practically risk-free, are under threat. As a result, problem loans in the banking sector rose to a record 2.84 trillion yuan ($ 429 billion) as of September 30, according to the Chinese banking regulator. So, our main positions are unchanged: we sell on the stock markets, buy precious metals, sell oil and look for points to buy the dollar.
TVC:USOILShort
by Trade24Fx
3
Week in a Glance: Pfizer and the pandemic, Brexit and oilThe event of the past week was Pfizer's announcement that their vaccine is 90% effective. Many took this information as a victory in the fight against the pandemic. As a result, Monday became one of the most active trading days of the year, during which there was a massive exodus from safe-haven assets and an equally massive inflow of capital into risky assets. But then it was reported that CEO Albert Burla sold most of his shares right after the vaccine efficacy news was announced on Monday (with a daily high of around $ 41.99 on Monday, he managed to sell 132,508 shares at $ 41.94 a share). His actions, naturally, raised suspicions that everything is not so clear with the vaccine and Pfizer's prospects for selling it in the amount of 1.3 billion doses (!) in 2021 might be far from reality. Pandemic statistics contributed to a decrease in optimism in financial markets. The total number of cases in the world has reached 54 million, and the daily increase is now 650K +, of which over 180K is given only by the United States. Such statistics for the United States naturally intensifies conversations about the need for a nationwide lockdown in the United States as the only way to bring the situation under control. So, it’s too early to relax and buy risky assets. That is why this week we will be buying gold and silver, selling on stock markets, selling oil. And some words about the oil market. Despite the growth of the asset, associated with expectations that OPEC + in January will not increase production by 2 million b / d, the overall fundamental background remains extremely gloomy. OPEC and IEA monthly reports indicated that the second wave of the pandemic will inevitably hit the demand in the oil market. At the same time, the sharp increase in production in Libya speaks in favor of the fact that oil sales are the only logical trade plan in the current conditions. Formally, the coming week promises to be rather calm, which, however, may change at any moment. In theory, trade negotiations between the UK and the EU should end this week. Besides the pandemic, lockdowns will remain in focus. The earnings season in the US is almost over, but is still in progress.
FOREXCOM:XAUUSDLong
by Trade24Fx
USA closes, Europe suffers, IEA revises We have already written several times that the pandemic situation in the United States is becoming less and less controllable every day (160K+ new cases per day already). Currently, there is only one way to stop the worsening of an already dire situation - lockdown. The idea for a nationwide lockdown in the United States was voiced by Dr. Michael Osterholm, President-elect Joe Biden's coronavirus advisor. But while Biden has no authority, these are more intentions than part of the reality. In reality, a wave of local lockdowns and tightening measures in the USA began. For example, in New York, gatherings are limited to 10 people, bars and restaurants must close every evening at 10:00 pm. San Francisco has again banned indoor dining starting next Sunday, suspended high school reopening, and limited gyms and movie theaters to 25 percent of capacity. Note that these are half measures, which means they will not be able to quickly change the situation for the better. At the same time, Europe shows that lockdowns work. For example, in France, the number of new cases since the introduction of the lockdown has almost halved. Thursday was not the best day for the pound. UK GDP data for the third quarter came out slightly worse than experts' expectations (15.5% against expectations of 15.8% growth). In addition, information about another change in the deadline came from the Brexit fields. Let us remind you that this week the parties were supposed to complete negotiations and sign a trade agreement. But in fact, everything is postponed at least to the next week. As expected, growth in the oil market stopped. Following the rather pessimistic OPEC forecast for the oil market, the IEA published even gloomier estimates. The agency now expects demand to fall by 8.8 million bpd in 2020 (versus 8.4 million bpd in last month's report). Separately, the report noted that the vaccine is unlikely to significantly increase oil demand until the second half of 2021. Plus, the weekly data on US oil stocks from the EIA unexpectedly showed a fairly significant increase.
TVC:USOILShort
by Trade24Fx
Risky sentiments amid pandemic records, OPEC reportIn the first 10 days of November, 1 million (!) people were infected with COVID-19 in the United States. As a result, the number of patients with coronavirus in US hospitals has exceeded 60,000. It would seem that it’s time for investors to think about a possible second lockdown in the United States after Europe. Instead, they are running out of safe haven assets (US Treasury yields are at their highest levels since spring). Equity markets are correspondingly storming historic highs. And if the last couple of days investors have tried to bypass the shares of high-tech companies, then yesterday it came to them. Recall that after the news from Pfizer, investors decided that the world will soon return to normal, which means that preference should be given to value stocks (which are now relatively undervalued), rather than growth stocks (now significantly overvalued). As a result, at the start of the week, value companies around the world as a whole demonstrated the maximum growth in the entire history of observations relative to growth companies. Russia, following Pfizer, announced a 90% + effectiveness of its vaccine. This statement looked somewhat ridiculous on the information that in the Altai Territory three doctors vaccinated with the Sputnik V vaccine contracted the coronavirus. On the oil market, all attention was focused yesterday on the monthly OPEC report. The cartel has lowered its own forecast for oil demand in 2020 (by 300 thousand barrels per day - to 90.01 million bpd). In general, the rise in oil prices in the past couple of weeks is a reason for oil sales. Today promises to be quite busy in terms of macroeconomic statistics. UK Q3 GDP, Eurozone Industrial Production in September and traditional weekly US jobless claims statistics, as well as official US oil stocks data.
TVC:USOILShort
by Trade24Fx
2
EU attacks again, cannabis market and RepublicansAfter the euphoria that reigned in the financial markets related to the news from Pfizer (according to data analysed by Reuters, nearly $2 trillion changing hands on Monday), the markets calmed down somewhat on Tuesday. Both new pandemic records and the statement by Republicans that they support Trump's desire to challenge the election results returned to reality. Markets took this as a hint that the Republicans are unlikely to become much more compliant after the elections, and the Democratic edition of the stimulus bill will not be able to pass in a short time. Weak data from ZEW on business sentiments in the Eurozone and Germany, as well as EU threats to impose new taxes on digital companies, also did not contribute to the growth of optimism. In addition, the European Commission launched an attack on Amazon, accusing the company of "distortion of competition", illegal data collection, misuse and other deadly and not very deadly sins. The change of power in the United States means quite a lot of tectonic and not so much shifts in the financial markets and not only. We have already written that the stocks of cannabis producers may again be in the spotlight, as it was already in the fall of 2017, when Canada legalized cannabis in the country. In the end of 2017 the shares of companies like Canopy Growth, Aurora Cannabis, GW pharmaceuticals have grown exponentially in a matter of months. So over the last month, the first two have already added about 100% to their October prices and, apparently, this may be just the beginning. The US House of Representatives is set to vote in December to legalize the use of cannabis. At the same time, in a number of states, during the latest elections, referendums were also held on the legalization of medical or recreational marijuana. Since the vote was successful, there is reason to expect the opening of one of the largest cannabis markets in the world. And this cannot but lead to an increase in the shares of companies that are world leaders in the production of marijuana: Canopy Growth and Aurora Cannabis.
Short
by Trade24Fx
3
Flash of optimism from Pfizer and oil expectations from OPEC+Markets were greeted Monday in high spirits over Biden's victory in the US Presidential election. But the real excitement began when Pfizer said its experimental vaccine was more than 90% effective in preventing COVID-19. Markets took this almost as a victory in the fight against the pandemic. Accordingly, the safe-haven assets were sold out, while risky assets, on the contrary, were actively bought. The wave of optimism was not stopped by the information that the results were published on a very small sample, if not negligible (a total of 94 cases), nor the fact that the vaccine must be stored at -80 ° C, which can create serious logistical problems. Unfortunately, no one bothered to ask the main question, what does this news change here and now? And the answer is obvious - nothing. Here and now and in the horizon of the coming months, this will in no way solve the problem with the pandemic. But the problem is here and now. It's been a week since the lockdowns were announced in Europe, so what? The number of new cases in France, which has one of the most severe lockdowns, did not decrease, but increased significantly. This means, at best, that the lockdown will be extended. As a result, Goldman Sachs revised Europe's forecast for the fourth quarter from 9.1% growth (!) to a decline of 8.7% (!!!). The United States is literally one step away from a new lockdown. It's very strange that no one thinks about all this. Especially if you remember other recent news. For example, the European Union has raised tariffs on American goods by up to $ 4 billion. Or the updated forecasts from Goldman Sachs, which lowered their forecast for growth in the United States for the first quarter of 2021 by 2 times (!) from 7% to 3.5%. In this regard, we continue selling risky assets, including the US stock market, as well as buying safe haven assets, including the US dollar. The oil market was also optimistic yesterday. The general positive sentiment was superimposed by the information that OPEC + is seriously considering the option to postpone the increase in production, as the renewed pandemic strikes a new blow on demand in the oil market.
DJ:DJIShort
by Trade24Fx
1
Week in a Glance: US elections, central banks, NFP and pandemicThe main event of the past week was the US elections. And they were rather surprising. The Blue wave, widely expected by experts and analysts, has failed. The name of the new President was not announced until Saturday - the candidates were extremely close. But in the end, Biden won. Although Trump has not given up yet and is going to sue. So, we have the worst-case scenario. Especially when you consider that the Democrats have lost a number of seats in the House of Representatives, and the Senate, it seems, will remain under the control of the Republicans. In general, despite the optimism that prevailed in the US stock market all week, we consider it clearly premature. The risks are quite material and very significant. Other events, naturally, faded against the background of the elections, but this did not make them less significant. The pandemic set new records both in the world and in Europe and the United States. And if Europe has already closed, then the United States has so far been focused on the elections. But the steady excess of 100,000 new cases per day makes a return to this question inevitable. This means that the damage to the economy is inevitable. In this light, the revisions towards lowering their forecasts for economic development by the EU have become quite indicative. The Central Banks of Australia, England and the USA met during the week. And if the latter have not yet begun to change the parameters of monetary policy, the Reserve Bank of Australia lowered the rate and for the first time introduced a quantitative easing program, and the Bank of England increased QE size in UK. That is, the central banks have already begun to act, which only confirms how serious the situation is. The statistics on the US labor market came out better than forecasted, the markets ignored it, firstly, there was no time for this due to the elections, and secondly, in the light of the future lockdown, it is still not representative, since all past trends will be instantly crossed out. Based on the mentioned above, we expect that the current week will be sobering for the markets, that is, stock indices will go down where they belong, oil quotes will go down, and the dollar will strengthen.
DJ:DJIShort
by Trade24Fx
2
Worst-case scenario, Bank of England, Fed and NFP aheadThe events surrounding the US elections are developing according to the worst-case scenario. And it is very strange to see a flash of optimism in the financial markets. Biden is winning (looks like), but Trump has already said he will challenge the election results. Given that the country is essentially divided into two poles, the discontent of Trump supporters may well lead to a full-fledged crisis in the country. It is enough to recall the massive protests within the BLM movement this year to understand one simple thing: pandemic, lockdown and economic crisis released all the negativity that had been accumulating in people for years. So, news like this: "About 200 Trump supporters, some of whom were armed with rifles, gathered on Wednesday near a polling station in Phoenix, Arizona" should not be taken as part of a paranoid conspiracy theory. Today or tomorrow, this may become a new reality, in which all these BLM movements and looting associated with it seem like child's play (about 70 million people voted for Trump). Taking into account all of the mentioned above, we believe that buying in the US stock market and actively selling the dollar, the markets are very mistaken and the situation can turn around literally at any time. Speaking of other events of the day yesterday, we note the lack of progress in negotiations on Brexit, as well as the decision of the Bank of England to increase the volume of purchases of assets by 150 billion pounds (195 billion dollars) to 895 billion pounds. The Fed decided not to change anything yet. They are waiting for the outcome of the elections, as well as the development of a pandemic situation. According to the autumn forecast from EU, the economy of the Eurozone in 2021 will grow by only 4.2% instead of the previous estimate of 6.1%. The data on jobless claims in the United States came out on the whole quite good, but there is not much to be happy about either. However, today the official statistics on the US labor market will be published, which traditionally arouses heightened interest in financial markets.
Short
by Trade24Fx
Blue Wave Failure, Ma's Challenge, and ADP DataThe results of the US elections, in fact, multiplied by zero all the forecasts and poll results, according to which the "blue wave" was supposed to cover the country. In real life, we have essentially a fiasco of the Democrats. According to some analysts, the credit for this is the record data on US GDP for the third quarter and a comb of macroeconomic statistics for the third quarter. This explanation, in our opinion, is more than doubtful, because the GDP figures for the third quarter were published too late to radically change the balance of power in the election race. The most obvious explanation for what is happening is the theory of the silent voter. That is, those who vote for the Democrats openly and actively talk about it (which creates the illusion of the total superiority of their party); Trump voters prefer to keep quiet, but at the same time they go to polling stations and vote for their leader. What do the current results mean for the financial markets? To begin with, it's uncertainty. Trump has already announced that he will legally challenge the election results at least in Wisconsin. This means that the outcome of the elections will not be obvious for quite a long time. Asa result, stock markets might change their current upward direction, the same is true for the commodity markets and other risky assets. Dollar has chances for recovery. The last days have been very difficult for one of the richest people in China and the world, Jack Ma. The IPO of his brainchild Ant was postponed, and Alibaba shares in just one day (Tuesday) fell more than 8%. The China Banking and Insurance Regulatory Commission plans to discourage lenders from using the Ant platform, which has recently become a full-fledged replacement for small bank lending. In terms of macroeconomic statistics, yesterday is interesting primarily with data on employment in the US from the ADP. The figures came out much worse than forecasts, which, against the backdrop of fears of the second wave of the economic crisis, cannot but cause heightened fears. As a reminder, this Friday official statistics on the US labor market will be published. The sharp increase in US oil inventories very well coincided with the local weakness of the dollar and the general increase in optimism in the financial markets, provoking a significant increase in oil quotes this week. Well, this is a great opportunity to sell an asset at a higher price. Today promises to be very eventful. In addition to the topic of the US elections, participants in financial markets will closely follow the decisions and comments of the Bank of England, as well as the Fed. Well, traditionally, in recent months, data on jobless claims in the United States will be an object of increased interest.
TVC:USOILShort
by Trade24Fx
US elections: current results, expectations and implicationsThe main event of yesterday for the US and financial markets in general were the US elections: a new President of the United States, 35 Senators, and 435 Congressmen. The favorites in the race were the Democrats, who were expected to take control of not only the White House, but the entire Congress. Currently Biden leads, but results are not as impressive as they should be. What does this mean for certain assets and markets in general? The Russian ruble may suffer even more, as new sanctions from the United States are likely and a general deterioration in the already rather strained relations. By contrast, cannabis stocks could skyrocket on expectations of U.S. legalization. So companies like Canopy Growth or Aurora Cannabis could see double digit growth in the foreseeable future. As for the US stock market as a whole, the situation is twofold. On the one hand, Biden promised to raise corporate tax, which will hit the financial results of US companies and is a problem for the US stock market. On the other hand, the question of stimulus will re-emerge. The Democrats advocated their most extreme forms. So the injection of a positive is not excluded, but a lot will depend on what position the Democrats will take when they will be responsible for a huge hole in the budget. The Reserve Bank of Australia yesterday, as expected, cut the rate from 0.25% to 0.1%. It is possible that this will be the first step in a series of monetary policy easing by other central banks. We remind that on Thursday the Bank of England and the Fed will announce their decisions. From the point of macroeconomic statistics Wednesday will be interesting first of all by the ADP data. Markit PMI indices from the Eurozone and the USA will be objects of interest as well.
Short
by Trade24Fx
2
Blue Wave, Lockdowns, Israel and Libya Yesterday can be called the calm before the storm. At the very least, there were no particular reasons for the recovery that were observed across the entire spectrum of financial markets. Europe is closing more and more. Austria, Spain, Italy, Greece, Belgium and other countries have already joined France, Great Britain, Germany, Ireland or are at the stage of accession. The obvious candidate for joining this list is the United States, which last week reached a new all-time high of 100K new cases per day (Anthony Fauci's prophecy came true). Looking at all this, we would like to discuss the case of Israel, which introduced the lockdown on September 25th. No one understood why Israel went to the second murder of the economy. But the fact is that if at the time of the lockdown start the number of new cases per day exceeded 10K, then just in a month it dropped to 500 cases per day, that is, 20 (!) times less. So, Israel is a clear illustration of how everyone should have acted a month ago, and also why further lockdowns are inevitable. Today, despite all the optimism of vaccine manufacturers, lockdowns are the only way to bring the pandemic under control. We have written about the economic consequences of lockdowns more than once. Let's just note that yesterday's growth in oil prices is a reason for buying and nothing more. Especially considering the latest news from Libya. In just 3 weeks, the country was able to increase production from 100K b / d to 800K b / d and is not going to stop there for now. As for today, its main event, without a doubt, is the US elections. Judging by the polls, the analysis of bookmaker bets and the modeling results, the so-called "blue wave" is coming, that is, the Democrats have every chance to take control of not only the White House and the House of Representatives, but even the Senate. And this means tectonic shifts in everything. So, “2020” is unlikely to stop in the foreseeable future.
TVC:USOILShort
by Trade24Fx
Week in a Glance: European lockdowns, US GDP and earnings seasonThe past week turned out to be extremely eventful with very important fundamental events. Its main result was a radical change in market sentiments. Neither record GDP growth rates in the US and the Eurozone, nor excellent reporting by US corporations could change the negative mood. We will talk about this and much more in today's review. After it became finally clear at the start of the week that there would be no new stimulus before the elections in the United States, and the second wave of the pandemic totally covers Europe and the United States, market sentiments changed radically. The massive exodus from risky assets triggered a sell-off in the stock and commodity markets. In the foreign exchange market, the dollar was restoring its previously lost positions. An additional injection of negativity was given by France and Germany, which announced new lockdowns. During this weekend UK and Ausrtia joined them. And if Germany is still talking about a partial restrictions (restaurants, bars, cinemas, theaters and some other similar objects are closed), then France is breaking bad, introducing measures similar to those provided in the spring. The French Ministry of Finance estimates that it will cost the country a 15% drop in economic activity. Negative sentiments could not break either the record figures for GDP growth in the US (+ 33.1%) and the Eurozone (+ 12.7%), or excellent reporting from leading US corporations: Amazon, Alphabet, Facebook, Apple and many others. The commodity markets were also under pressure. In particular, the oil market, for which last week was remembered for a sharp increase in oil stocks in the United States, the announcement of an increase in Libya's production to 1 million barrels per day and a ripening split in OPEC + (Iraq, the United Arab Emirates (UAE) and Kuwait do not want to maintain production restrictions in 7.7 million b / d in 2021). The central banks of Europe, Japan and Canada did not try to turn the tide and left the parameters of monetary policies unchanged. The ECB, for example, decided to take a break until December, when, apparently, a decision will be made on further easing of monetary policy. The coming week is not going to be easy. Everything will begin with the elections in the United States (Presidential and Parliamentary), will continue with the announcement of the results of the meetings of the FRS and the Bank of England, and will end with statistics on the US labor market. Perhaps these events will be able to reverse the current trends and sentiments, but for now, other things being equal, we continue to sell on the US stock market, as well as on the commodity markets. In the foreign exchange market, we give preference to buying the dollar.
DJ:DJIShort
by Trade24Fx
1
Recovery day is over and uncertainty lies aheadThursday was a recovery day after Wednesday's sales. The reasons for the pause were the peak of the earnings season in the US, as well as the US GDP data. US GDP growth in the third quarter exceeded the average expectations of analysts and amounted to a record 33.1%. However, this figure should not be taken as a sign of the end of the problems in the US and world economies. US GDP is still in the red for the year. Given how the situation with the pandemic is developing, there is practically no chance that the US economy will end 2020 in positive territory. But China will most likely end the year in plus. But even this victory is very questionable. Because the rate of growth that is expected will be the lowest for China over the last 40 years. In general, everything is bad everywhere. And the earnings of Apple, Amazon, Alphabet, as well as Facebook, which has traditionally exceeded analysts' expectations, should not be taken as a change from recession to growth. The third quarter and the growth of the economy in it are not the merit of the economy as such, but of money injections from the US Government (CARES act) and the US Federal Reserve. The problem is that since August the US has been living without artificial feeding. The question of stimulus is closed before the elections, and what will happen after them is still unknown. The ECB, as expected, did not change the vector and parameters of monetary policy in the Eurozone yesterday. In fact, the decision was postponed to December - expansion of the quantitative easing program or even more radical measures to support the economy are expected. So the euro continues to be under pressure from pandemic news and information about new restrictions. However, today the euro may receive support from the data on the Eurozone GDP. After yesterday's US data, there is every expectation of exceeding forecasts. But then again, today's data will change little in general. The next month or two (at best), the European economy will suffer heavy losses.
DJ:DJIShort
by Trade24Fx