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Jobless claims, pandemic in Europe and poisoning of NavalnyIn terms of news, Thursday turned out to be a rather calm day, especially against the backdrop of a busy environment on Wednesday. From the point of view of macroeconomic statistics, the data on jobless claims in the USA were of the greatest interest. Markets expected further improvement in the US labor market. The data came out mixed. On the one hand, the number of continuing claims dropped to less than 15 million, but on the other hand, the initial applications again exceeded a million. So, this is more of a reason for selling the dollar than buying it. The important news of the day yesterday was the poisoning of Russian opposition leader Alexei Navalny, as a result the latter ended up in a coma. Considering that this happened just when one of Russia's satellites, Belarus, may well leave the orbit of the Russian Federation, all this looks like a preemptive action of the Russian authorities in order to extinguish the flame of protest moods in the country in the bud. However, we will not delve into politics, we only note that for the Russian stock market and the ruble this is a negative signal, so you can try to make money on this news by selling the ruble and Russian stock indices. Meanwhile, the United States and China still plan to return to the negotiating table to review the phase one of the trade agreement. Let us remind that the meeting was supposed to take place last Saturday, but was postponed. Yesterday there was information (without specific dates) that the countries agreed on the need for a meeting. This news is especially important in the context of information from the World Trade Organization (WTO): The WTO "trade barometer" dropped to 84.5 points in June, and is now 15.5 points below the baseline of 100 points and 18.6 points below the June 2019 indicator. "Figures for June turned out to be a record low in the entire history of such statistics since 2007 and roughly correspond to the low point of the financial crisis of 2008-2009," - says the WTO report. This is about the state of the world economy as a whole. All these problems are caused by the pandemic. The pandemic situation in the United States continues to improve, but this is offset by a sharp deterioration in the situation in Europe. Spain is again the epicenter of the European pandemic (the highest number of cases since April was recorded). Germany is adding 1000 new cases for the third day in a row, and France has the highest increase in cases since the beginning of May.
Long
by Trade24Fx
FOMC minutes, OPEC +, Democrat’s Move and Inflation DataFrom the point of view of macroeconomic statistics, yesterday was primarily interested by inflationary data from the UK, Eurozone and Canada. Weak inflation in the Eurozone can be interpreted as one of the signs of an economic depression and, in general, is a negative signal for the euro. The FED has published the minutes of the last meeting of the FOMC. The tone was rather gloomy: the economy is recovering more slowly than it could be, especially the consumer sector. At the same time, the Fed was in no hurry to assure the markets that it is ready to act here and now to support the economy. Quite the contrary, the Central Bank has traditionally noted the importance of fiscal incentives. Negative rates are not on the agenda. With regard to yield curve control (an unconventional form of quantitative easing), the issue has been discussed, but remains open. It is not surprising that such minutes somewhat diminished the degree of confidence of buyers in the stock market and returned optimism to buyers of the dollar. Especially when you consider yesterday's information that the Republicans and Democrats still maybe ready to work out a compromise solution, which each of the parties can give out for a victory. Let us remind that the incentive package is a very serious argument in the election race and the size of the election dividends will depend on who appropriates its authorship. So, the Democrats said that they are ready for a compromise solution: a partial plan now and the rest after the Presidential elections. Given that the gap in the positions of Republicans and Democrats is about $ 2 trillion, this proposal has a real chance of being implemented. In this situation, both sides save face, and the economy will receive the injection of money it needs. In light of such news, today we tend to buy the dollar across the entire spectrum of the foreign exchange market. A meeting of the OPEC + Monitoring Committee took place yesterday. It did not bring any special surprises. OPEC + participants announced the introduction of penalties, according to which ineffective executors of the transaction will be obliged to compensate for 2.3 million barrels per day from a reduction in oil production. As a result, the level of the overall reduction in oil production in August and September should be more than the planned 7.7 million barrels per day. Meanwhile, US oil stocks fell by another 1.6 million barrels. Judging by the reaction of the oil market, none of this news was seen as a reason for growth. This only confirms our recommendation to sell oil at current prices.
Short
by Trade24Fx
1
Republicans plan, unabated pandemic and signs of insanityThe main event of yesterday was the Republican plan to help the US economy. By and large, this is a slightly modified version of their previous proposal, which now includes an increased unemployment benefit of $ 300 a week, money to help small businesses, additional funding for the US Postal Service, and protection of employers from lawsuits related to Covid-19. Considering that the total amount of aid is still near $ 1 trillion, we can safely consider this bill stillborn, since the Democrats will not support it (recall, their position is a $ 3 trillion aid fund). The situation with the pandemic in the world continues to cause no less concern. The total number of cases has exceeded 22 million, and new outbreaks of the disease are observed in a number of countries. In particular, Germany recorded the maximum number of new cases in the last 4 months, while South Korea also saw a sharp increase in the number of cases. However, the epidemiological situation continues to improve in the US and UK. As for the financial markets, the madness there continues. It takes especially concentrated and hypertrophied forms in the case of Tesla. The company, which shares priced less than $400 six months ago, is now quoted above $1800, and Elon Musk took the fourth place in the list of the richest people on the planet. Another striking evidence in favor of insanity in the financial markets recently provided the Norway Government Pension Global Fund. The richest sovereign wealth fund in the world lost $ 21 billion in the first half of 2020: Investment professionals are having hard times right now. The situation in the US housing market, which is experiencing a boom period against the backdrop of a pandemic and economic crisis, also evidences in favor of schizophrenia prevailing in the financial markets. At least that's what the latest homebuilder sentiment report suggests. It shows record levels of customer buyer traffic. That is, more and more people want to buy houses. But at the same time, the level of delinquencies on mortgages has sharply increased and is approaching record values unseen since the global financial crisis of 2007-2009.
Short
by Trade24Fx
1
Japan's failure, virus mutations and a pause in tensionsFrom the point of view of macroeconomic statistics, the main event of yesterday was the disastrous data on Japan's GDP. -27.8% decline in GDP (compared to the same period a year earlier) is even worse than in Britain. Naturally, the fall became the record in the entire history of observations. In general, this is further evidence in favor of the depth of the abyss into which the world economy has sunk because if the pandemic. However, all this cannot prevent the stock markets from further growing, increasing the gap between their prices and reality. We have already written that the global economy will take not months, but quarters and even years to recover. And this is for the case when the pandemic can be brought under control. But even this is questionable (the number of new cases is growing in France, Australia reports record number of new deaths, and in New Zealand elections were postponed for 4 weeks due to an outbreak), the situation exacerbated by news of the mutation of the COVID virus. In particular, scientists in Malaysia have discovered a new, more contagious strain of the virus. The only conditional positive is the postponement of the meeting between the United States and China on the review of the Phase 1 trade agreement. The meeting would surely end with a new round of tensions, so that the absence of a worsening of the situation is already positive. Gold returned to $2000, demonstrating that last week's "Black Tuesday" was a misunderstanding. Meanwhile, the oil market is preparing for tomorrow's meeting of the OPEC + monitoring committee, which is to assess the progress of the deal to limit oil production. Information about overfulfillment of the plan may well push the asset's quotes up, but news that some Irans or Nigerias are again violating can provoke oil sales.
FOREXCOM:XAUUSDLong
by Trade24Fx
1
Week in a Glance: US stimulus, UK GDP, pandemic and vaccinesThe main event of recent weeks remains the stimulus package for the US economy, which Republicans and Democrats still cannot agree. After Trump issued a series of executive orders that cut off funding for a number of key points, the parties clearly decided that there is no need to rush. And over the entire past week, they have regressed rather than progressed in the negotiation process. With this approach, they can be in a deadlock for a long time: until September or even longer. This is negative news for the dollar, especially considering that last week US retail sales and industrial production came out worse than experts expected. By the way, China reported another decline in retail sales, which suggests that the country's consumer sector has not yet recovered from the consequences of the pandemic. Meanwhile, the UK economy has officially entered a state of recession, demonstrating the highest decline in the country's history in the second quarter and becoming one of the worst in Europe (even worse than Spain with its -18%). The situation with the pandemic in the United States has improved significantly over the week, but in the world, it continues to remain consistently difficult, as the improvement in the United States was offset by a worsening in other countries. The news that Russia has an effective vaccine for the day rocked the financial markets, but most developed countries said that there was no trust in it, and in the United States they generally noted that they would not even prick monkeys for testing purposes. As for the coming week, in terms of statistics, it promises to be relatively calm. So, the markets will continue to follow the opposition between Republicans and Democrats, as well as the United States and China. In addition, another round of trade negotiations between the EU and the UK kicks off on Tuesday. The annual symposium at Jackson Hole will traditionally be kept in mind by financial market participants.
Short
by Trade24Fx
8
Deadlock in the US, gloomy oil demand, important data aheadIn terms of news, yesterday cannot be called a busy day. Plus, the news that came out was somewhat contradictory. For example, statistics on jobless claims in the United States came out better than forecasted: the number of initial jobless claims for the first time in several months came out below 1 million, and the number of people receiving unemployment benefits on a permanent basis fell to 15.5 million. But, on the other hand, Republicans with Democrats continue to be in a deadlock regarding the new stimulus package for the US economy. Or, for example, US oil stocks are declining, which is a positive signal for oil, but the International Energy Agency is reducing its estimates of global oil demand for almost every quarter until the end of 2021. And this in turn is a reason for oil sales. Our position on oil in the current realities: any asset growth should be used as an opportunity to sell. So far, the day started with a negative news: industrial production in China increased, but at a slower pace than expected by experts. But more importantly, retail sales reduced again. Thus, the Chinese economy still cannot fully recover from the pandemic. In this light, today's data on retail sales and industrial production in the United States will be of increased interest. If the data comes out better than forecasted, then the dollar has a chance for recovery, otherwise a re-test of local minimums seems inevitable.
TVC:USOILShort
by Trade24Fx
6
Recession in the UK, roller coaster of gold, US inflationThe main news of the yesterday in terms of macroeconomic statistics was the publication of UK GDP data for the 2-nd quarter. As expected, they not only confirmed the fact of the transition of the British economy into a state of recession, but also turned out to be one of the worst among developed countries and Europe in particular. So, the recommendation to sell the pound primarily against the euro remains relevant. Another important statistical information released yesterday was the data on consumer inflation in the US. The data came out above forecasts. In general, the intensification of inflationary processes may force the FED to tighten monetary policy. This can have an extremely negative impact on the US stock market (price bubbles will start to burst). However, here and now nothing has changed. What was shown by the dynamics of the dollar, which did not even try to grow on these data. Interesting things continued to happen in the gold market yesterday. After the sale on Tuesday, on Wednesday, the asset was recovering and, in general, there is nothing strange in this, because the global fundamental background did not change and what happened on Tuesday was a classic overreaction followed by a contrarian movement the next day. Republicans and Democrats continue to seek a compromise and can’t find it. The oil market received another formal reason for growth (crude oil stocks in the United States fell by -4.512 million barrels against the forecast of a decline of -2.523 million barrels, as well as a significant decrease a week earlier - by -7.373 million barrels), but most likely it will again be ignored. as it has been for several weeks in a row. In general, a big movement is clearly brewing in the oil market, but there are not enough tectonic shifts in the fundamental background. In terms of macroeconomic statistics, this day is interesting primarily with jobless claims data in the United States.
FOREXCOM:XAUUSDLong
by Trade24Fx
1
Gold's failure, Russian vaccine, more Trump ordersThe main event of yesterday was the maximum one-day drop in gold prices over the past 7 years. Considering how high the asset had climbed, it cannot be said that it was something incredible. But still a very impressive fall. As for the reasons, there was information that an effective vaccine against coronavirus was registered in Russia. President Vladimir Putin said one of his daughters had already received it. It is impossible not to note the doubts of experts about the adequacy of tests, especially after the words of the Russian Minister of Health Mikhail Murashko that the production of the vaccine will take place in parallel with its testing. Against this background, the information that the total number of cases in the world has exceeded the 20 million mark looked not so hopeless, especially given the fact that the situation in the United States continues to improve. Trump, meanwhile, seems to have gotten a taste for presidential executive orders bypassing standard congressional procedures. This time, he decided the time had come for a capital gains tax cut. Well, a record budget deficit resulting from a decline in revenues and a simultaneous increase in expenses by 50% - this is the right time to reduce the taxes. Meanwhile, the sentiments in the Eurozone and Germany continues to improve. The ZEW expectations index for the Eurozone came out at around +64.0 against the previous value of +59.6 points. As for the statistics on the UK labor market, it inspired pessimism: the employment rate fell at the highest rate since 2009 (three months before May, 220,000 jobs were lost). But today the data on the UK GDP will be published, which not only state the fact of the recession, but also promise to be the worst in Europe. In this regard, we remind our recommendation to sell the pound in the foreign exchange market.
FOREXCOM:XAUUSDLong
by Trade24Fx
5
US and China, 9 more months, stimulus, pandemic and poundThe world's two largest economies continue to balance on the brink of a new escalation: sanctions, closure of consulates, threats to ban Chinese social networks in the United States, etc. The most obvious problematic target in the nearest future is the phase 1 agreement between the United States and China. China has not yet fulfilled its obligations on imports from the United States (the percentage of fulfillment is less than 25%). Given how tense relations between countries are, there is every chance of a return to the good old trade wars between countries. In Germany, meanwhile, were wondered how long it would take for the economy to return to pre-pandemic levels. According to a survey of German companies conducted by the Munich-based Ifo, about 9 months. Beverage and pharmaceutical companies will be back on track within seven months, while the key auto sector is evaluating them in eight months. The sports and recreation industry, along with the arts and other entertainment-related businesses, will face the longest disruptions that will last until next summer. Meanwhile, the US pandemic situation continues to improve, but is still extremely dire. In the world as a whole, everything is worse, but even at the global level there is a feeling of reaching a second pandemic plateau. The US stimulus package is still underway. Republicans blame Democrats. Mnuchin, in particular, said that an agreement can be reached this week, if the democrats will be “reasonable”. Today is interesting thanks to the data on the UK labor market. In this light, we recall that on Wednesday the figures on the UK GDP will be published. Given how weak the data is expected to be, current pound prices seem like a great selling opportunity.
Long
by Trade24Fx
1
Week in a Glance: NFP, US stimulus, TikTok and Bank of EnglandThe past week has been extremely busy in terms of news. Formally, the main event of the week was negotiations between Democrats and Republicans on a new stimulus package for the US economy. But since the parties did not reach a compromise at the end of the week, this event becomes the main news of the current week. The Bank of England left the parameters of monetary policy unchanged and noted that it is not going to either soften them or even tighten them. The pound reacted relatively calmly to this. It is unlikely that it will succeed this Wednesday, when the data on the UK GDP for the second quarter will be published. The data promises to be devastating, which means the pound will be under pressure. So, the deal for the first half of the week for us will be selling the British pound across the entire spectrum of the foreign exchange market. Even against the dollar. The US dollar, which was under the most powerful downward pressure on Friday, rose rather aggressively. The reason for this was the US labor market data. NFP figures unexpectedly surpassed analysts' forecasts and exceeded 1.7 million. This, of course, does not mean that the crisis in the US labor market is over, but the correction in the dollar has matured a long time ago and the reason for its start is generally very good. Trump's threats to block Chinese social networks TikTok and WeChat if they do not sell their American business segments to US companies can be considered an important event of the past week. As a result, TikTok is in talks with Microsoft. Such actions by Trump may well take tensions between the United States and China to a new level. Meanwhile, the earnings season is fading. Despite the disgusting results for most corporations, they are still better than analysts' expectations, and as a result, the US stock market continues to grow. We have many times noted the irrationality of what is happening and the huge gap between the real world and prices on the stock market.
Short
by Trade24Fx
1
NFP, Bank of England, Trump and Goldman Sachs Yesterday started with the announcement Bank of England meeting results. Monetary policy parameters were left unchanged, with the decrease in the pace of bond purchases to 4.4 billion pounds per week from August 11. The main concern of the markets was that the Central Bank may take measures to tighten monetary policy soon. But the Bank of England assured that they would not tighten monetary policy in the nearest future. At the same time, they directly stated that no one was going to soften it yet. In general, nothing unexpected, the status quo remains. So, attempts to growth of the pound like yesterday's are nothing more than a reason for selling it. The only thing is that in conditions when the dollar is not in favor in the foreign exchange market, it is better to do it against the euro or franc. The main event of today, and of the week as a whole, is the publication of statistics on the US labor market. After the disastrous data from ADP and a series of weak statistics on jobless claims, we expect a significant deviation of the fact from the forecast, in downward direction. In theory, this could provoke a sell-off in the US stock market, and would also be another blow to the dollar. Trump issues executive orders banning TikTok and WeChat from operating in 45 days if they are not sold by Chinese parent companies. Goldman Sachs analysts, meanwhile, have generate an interesting idea that a successful coronavirus vaccine could turn financial markets upside down, triggering selloffs in bonds and high-tech stocks. We are especially interested in the second part - shares of high-tech companies. Little is thought about this now, but indeed, the return to the former reality means that the transition of FAANG companies to a new existence will at least be greatly extended in time, if not postponed at all. So, this fact must be taken into account in their price, which is now precisely based on the fact that the pandemic is a new reality with all the ensuing benefits for FAANG companies.
Long
by Trade24Fx
ADP Failure, Bank of England and Gold RecordsThe main event of yesterday was the frankly disastrous data on employment in the US from ADP. With the forecast of 1.2-1.5 mln new jobs and the previous value of 4.3 mln, in fact + 167K came out. This evidences in favor of the deepest depression in the US labor market and its inability to recover quickly. It is a very alarming signal ahead of the publication of official statistics on the labor market on Friday. This failure looks especially challenging against the background of the US PMIs, which go above 50 and show an increase in economic activity. Such situation can be explained by the fact that with its weekly payments of $ 600, the US government completely deprived most low-paid workers of the incentive to look for new jobs or return to old ones. So, it is quite interesting to see the new stimulus package. Recall that the Republicans want to reduce the amount of payments from $ 600 to $ 200, while the Democrats want to leave it at $ 600. A compromise is expected by the end of the week and it seems to be the dollar's last hope for at least a local correction. Otherwise everything looks extremely unfavorable for the American currency. Among other events, it is worth noting new historical highs in gold. We have already discussed the reasons for this growth before. As for the prospects, in the current reality, absolutely everything contributes to the further growth of gold. Another piece of news yesterday was the agreement between the United States and China to meet in mid-August to discuss the results of the first phase of the trade agreement and other contradictions. Negotiations can end very badly, up to the breaking of the first phase agreement. Today the main event of will be the announcement of the decision of the Bank of England on the parameters of monetary policy. Analysts and experts are not expecting any changes or surprises. Accordingly, the pound is unlikely to receive a positive injection.
FOREXCOM:XAUUSDLong
by Trade24Fx
1
Highs of world stock markets amid the crisisIt is very symptomatic that after the publication of the biggest ever recorded decline in US and Eurozone GDP, the global stock markets (MSCI world equity index) showed the highest values over the past five months and came close to the historical maximum. Buyers are not stopped by the economic crisis, or the disastrous earnings season in the United States, or the growing tensions between the United States and China, not the pandemic, and nothing at all. Absurdity is a key component of the current behavior of financial markets and everything related to them. Let’s take Microsoft and Tik Tok situation, as an example. Its emergence largely due to an ultimatum from the US government, but the US government also wants to get a share of the deal. At the very least, President Trump said that the US government should receive a share from this sale without specifying, however, how he imagines it. Republicans and Democrats have not yet reached a compromise. Against this background, Trump said that the Government can take a number of measures to save the economy, including a moratorium on evictions, the introduction of tax holidays, and additional unemployment payments. Trump can be understood, the situation in the US labor market continues to be extremely depressing even with the availability of weekly payments of $ 600. And since Monday, they are officially gone, which threatens a sharp drop in consumption. Considering that almost half of the temporarily unemployed believe that their jobs will not return (according to a survey by the Associated Press-NORC Center for Public Relations Research), additional payments from the authorities are practically their only chance for a more or less full-fledged existence. In this light, it will be extremely interesting to look at today's statistics on employment in the US from ADP and, of course, we look forward to Friday with data on NFP and unemployment.
DJ:DJIShort
by Trade24Fx
1
Banks are preparing for the worst, Microsoft and Tik TokOne of the most interesting moments in the current earnings season is the active reserving of funds by banks to cover possible losses from loan defaults. We are talking about tens of billions of dollars on a banking system-wide scale. What does this mean? In means that the fall in US GDP in the second quarter is far from the last bad news for the economy. The consequences of the pandemic are stretched out over time and banks are waiting for massive loan defaults to begin. In fact, the ongoing bankruptcy of large companies and entire networks in the United States speaks in favor of this. Bank losses, in turn, mean more expensive loans with more stringent conditions for obtaining them. This is exactly what the business exsanguinated by the pandemic lacks to make a decision to end the struggle. In this light, we cannot fail to note the growing gap between the US stock market, especially its technological sector, from reality: Nasdaq Index yesterday showed new all-time highs. But not even a week has passed since the data on US GDP were published. This was partly due to the news of Microsoft's desire to buy TikTok's operations in the U.S., Australia, Canada, and New Zealand. This potentially means the emergence of a serious competitor for other social networks like Snapchat and even Facebook. Meanwhile, the dollar is recovering somewhat in the foreign exchange market. It is clearly too early to bet on its growth. But the very fact that the rampant decline has stopped suggests at least that the situation has stabilized somewhat. Perhaps this is an attempt by the markets to discount for a future stimulus package for the US, which Democrats and Republicans have not yet been able to agree on.
FOREXCOM:NAS100Short
by Trade24Fx
Week in a Glance: GDP, FED, US stimulus, earnings peakLast week was the peak of the earnings season in the United States. On the one hand, tech giants have shown that not for all pandemic is a loss and the threat of bankruptcy. But on the other hand, the overwhelming majority of companies are losing revenues at a double-digit rate, and many at the same time record billions in losses at the end of the quarter. So, the current earnings season, despite some success so far, is one of the most disastrous in modern history. An even more depressing picture in this regard was detected in the dynamics of US GDP (-32.9% - the maximum drop in the entire history of observations). The situation in the Eurozone and Germany is somewhat better, but even there the rates of decline turned out to be double-digit and the highest in the entire history of observations. In general, the data is more than conducive to take profits in the stock market and to start a full-fledged correction. Last week was marked by record prices for gold, which almost reached $ 2000 per ounce. Again, the fundamental background was at its best, especially when you consider that the pandemic in the world cannot reach a plateau in any way and the number of new cases of diseases is very close to 300K per day. The dollar in the foreign exchange market was under strong pressure all week (except for profit taking Friday). The Fed is partly to blame for this: the Central Bank left the parameters of monetary policy unchanged and made it clear that ultra-soft monetary policy in the United States is for a long time. In addition, the permanent failures of negotiations between Republicans and Democrats over a new stimulus package for the United States, coupled with Trump's provocative tweet about the delaying of the Presidential election, only worsened the already gloomy fundamental backdrop around the dollar. In terms of news, the upcoming week will be quieter, but still very eventful - the data on the US labor market, as well as the announcement of the results of the Bank of England meeting would be the headliners.
FOREXCOM:NAS100Short
by Trade24Fx
1
Results of the crisis, earnings of giants and Trump initiativesYesterday was exceptionally rich in key macroeconomic statistics. In fact, it is now possible to sum up some intermediate results of the economic crisis caused by the pandemic. Germany's GDP in the second quarter fell by a record 11.7% (compared with the same period last year). The data came out slightly worse than expected. So, some weakness of the euro during the European session yesterday is understandable. Especially when you consider that the statistics on Eurozone GDP will be published today. The rate of decline will almost certainly exceed 10%. The whole question is how much. But the main loser was the US economy. In the second quarter, it lost 32.9%. This is the maximum drop in the entire history of observations. And although a sharp recovery in economic activity is expected from the third quarter, it is already obvious that the economy will not return to the pre-crisis level in the nearest future. The situation with the pandemic in the world continues to remain as negative as possible. In addition, when looking at the data on jobless claims, it becomes clear that the US economy continues to be in disgusting shape. Initial claims for unemployment benefits are above 1.4 million per week. As for continuous claims, they have grown significantly, exceeding the 17 million mark. Given such a difficult situation on the labor market, if the Republicans and Democrats do not agree about stimulus act, the consequences for the US economy could be as negative as possible. And they, meanwhile, have not yet found a common language. Donald Trump yesterday decided to finish off the already weakening dollar by voicing the idea of delaying the presidential election. And although this is generally unreasonable stuffing, many thought that there is no smoke without fire. Yesterday was also important because the tech giants reported: Amazon, Apple, Alphabet, Facebook. By and large, all of them, to one degree or another, are beneficiaries of the pandemic. This was confirmed by their strong quarterly data.
DJ:DJIShort
by Trade24Fx
4
Big Day, Fed Decision and Antitrust HearingsToday may well become the defining day for the US stock market for weeks ahead. The fact is that on Thursday, the US tech giants, which control almost half of Nasdaq's capitalization, are reporting on the results of the second quarter. In addition, US GDP data for the second quarter will be released today. The fall is expected to exceed 30%. A figure a few months ago, absolutely unthinkable, may well become a reality. Failure in the consumer sector (recall dozens of bankruptcies in the retail sector, drop in airline revenues by 80-90%, failure in the automotive market, etc., which ultimately led to estimates of a 30-35% reduction in US consumption in the second quarter) ) for an economy where 70% of GDP is generated by consumer demand, means that the figure of -35% in terms of GDP growth rates relative to the same period last year is generally achievable. It is likely that this could bring stock markets back to reality. Naturally, we are talking about a radical reduction in prices there. So today we are actively selling in the US stock market. Yesterday, the Federal Open Market Committee expectedly left the parameters of monetary policy in the US unchanged. Powell was quite categorical, saying that an increase in rates in the foreseeable future should not be expected. Meanwhile, the epic with a new stimulus package for the United States continues, and the parties are still moving away from consensus rather than approaching it. This puts pressure on the dollar, which is not going through its best times without it. The heads of the largest US corporations have been testified in Congress. So far, it has given nothing but news noise.
FOREXCOM:NAS100Short
by Trade24Fx
2
Republican’s plan, Fed, past and future volatility explosionsAs soon as we had analyzed the current situation in the precious metals market from the standpoint of the general fundamental background yesterday, a record for recent months volatility explosion in gold and silver prices was detected. Considering that there were no changes in the general fundamental background yesterday, we think yesterday movements were the result of technical moments, such as profit fixing and the involvement of that part of traders who catch reversal moments in price dynamics. Again, since the fundamental background is unchanged, we do not see any reason to revise our position yet. Thus, purchases of gold and silver only added to the relevance, and did not lose it. The main event of yesterday, outside the context of price dynamics, was the discussion of the Republicans' plan with the Democrats, since without their support it will not be possible to implement it in practice. So far, the gap between parties does not even allow to approach a compromise, but, in our opinion, it is inevitable - the whole question is what form it will take and when it will be reached. In this light, we continue to believe that the dollar has every chance of a correction this week. Today, the Fed's Open Market Committee will announce its decision on the parameters of monetary policy in the United States. Analysts are not expecting any changes. The point is rather in the comments on the future actions and plans of the Central Bank. Today the heads of the largest tech corporations in the United States will be interviewed at an antitrust hearing in Congress, which could potentially provoke a surge in volatility in the quotes of Amazon, Google, Apple and Facebook. By the way, they will all report on the results of the second quarter as early as Thursday. So there are very volatile days ahead of us.
FOREXCOM:NAS100Short
by Trade24Fx
2
Gold and silver records, pandemic and dollar problemsJudging by the dynamics of gold and silver in recent months, all the negative generated by the global economic system because of the pandemic is incorporated not in the stock market or in the foreign exchange market, but in the precious metals markets. In general, the fundamental background has probably never been so favorable for precious metals, especially for gold and silver. The pandemic, which is only getting worse every week (another outbreak in China and a sharp increase in Spain, a rapid deterioration of the situation in India, etc.) forces the most cautious investors to go into cash or safe-haven assets. Zero interest rates across all the world's leading central banks have made zero-yield assets (like gold) much more attractive than bonds (many government bonds yields are now negative). Huge injections of money from central banks and governments create a surplus of money in the markets, which in turn acts as a reliable basis for the demand for precious metals. The fall of the dollar in the foreign exchange market has recently been an additional factor in favor of the growth of gold and silver. And the last thing to consider: technically, gold and silver have formed stable trend structures that stimulate buyers. In general, it is not surprising that gold has reached the highest prices in history. It will be surprising if it does not try to hit the 2000 mark this week. Also, there is nothing strange about the 100% (!) growth of silver since March. And again, it will be strange if everything ends without attempting at least to touch 30. Meanwhile, dollar problems are getting worse. It is beaten systematically and methodically. To explain this, analysts talk about the growth of the euro and the Japanese yen, which are pushing the dollar down. We find this explanation more than dubious. However, analysts are understandable. By and large, there have been no globally new factors for dollar sales recently (the economic decline, protests in the US, a pandemic, and even tensions with China - all this was already long before the current dollar's problems). And what is happening with the dollar from the standpoint of cause-consequences relationships is really not obvious. Especially when you consider its status as a haven asset in the foreign exchange market. So it’s a little bit too soon to bury the dollar.
FOREXCOM:XAUUSDLong
by Trade24Fx
HELLA: Joint venture at Jianxing Zhejiang, 700km away from WuhanSideways movement presents low volume and in the past two years (2018 and 2019), HLE has entered July in a bearish mood. From the upside, the price is at 0.5 fibonacci retracement level although the head formed on June 8 surpassed 0.618 for a bit. From the down side (blue fib retracement), the price is at 0.236 level. A sharp fall beyond 0.382 level in the next 2 weeks would mean a bullish trend reversal. Causes for this to happen: Due to covid19 tensions and also US-EU trade war we may see a short-term (6 months) decay predicted by the Head and Shoulders figure finished on June 22. Deutsche Bank sticks neutral on HLE's target price at 30€ although JP Morgan offers buy rating until 41€. In addition, HLE seems not to be scared about a new virus outbreak in China and has established close relationships with Jianxing, in Zhejiang province, shaping a joint venture with Minth to produce radomes and illuminated logos. In Zhejiang (currently +30ºC) there were 1,269 covid cases, 1.52% of the total Chinese Mainland cases. Zhejiang is 1000 km away from epicenter Wuhan. If news about covid19 evolving in China continue to happen, HLE will be seriously damaged by it.
XETR:HLEShort
by alexinve
Week in a Glance: 750 billion for the EU, US vs China, earningsThe past week has been extremely successful for the euro. The reason for this, first of all, is the aid fund worth 750 billion euros. Instead of the prescribed 1 day, the EU summit lasted all weekend and even this was not enough to reach a compromise. It was only on Monday that the EU members came to an agreement: the total amount of grant aid was reduced from 500 to 390 billion euros, and the amount of loans is 360 billion instead of 250. The week ended with an additional injection of positive for euro: data from Markit indices in the Eurozone and Germany, were above 50 (means increase in the economic activity). The problem of stimulus is now facing the United States. Moreover, the Republicans and Democrats have literally a few days left to reach a compromise. So far, their positions are quite distant: Republicans are ready to vote for a package of $ 1 trillion, and Democrats are insisting on $ 3 trillion. So, this week all attention will be focused on this topic. The dollar, which was under the strongest downward pressure last week, canstop the fall this week. But for this, the United States must have a new stimulus package. The main cause for concern of investors last week was another round of escalation in relations between the United States and China. The states ordered China to close the consulate in Houston, and China, in turn, ordered the United States to close the consulate in Chengdu. It is very likely that the sides will exchange new blows this week. Earnings season is at its peak this week. Microsoft, Tesla, Intel, Twitter, At&T and many more reported last week. Airlines have routinely shown a drop in revenues by 80-90% and significant losses. Tesla posted its fourth consecutive quarter of profit, which gives it formal reasons for claiming a place in the SP500 index, although everyone understands that this profit is just on the paper, and the company itself continues to generate losses. This week we expect quarterly results from the rest of FAANG members: Amazon, Apple, Alphabet, Facebook, and after that the earnings season will start to fade. As for macroeconomic statistics, the week will be interesting primarily because of the US GDP data. Obviously, this will be the worst quarter ever. The question is how much. In addition, we are waiting for data on GDP in the Eurozone and Germany, as well as the announcement of the results of the FOMC Fed meeting. In general, the week will be extremely busy.
Short
by Trade24Fx
3
Stimulus, jobless claims, earnings season and BrexitAs usual for this week, the main news of the day were centered around the plans to rescue the US economy, the earnings season and, traditionally for Thursday, jobless claims in the US. As Democrats and Republicans have less time, the process of preparing a new stimulus package has intensified markedly. Republicans seem to have decided on their position: legislators have agreed with the White House on the amount of aid (1 trillion) and its main components. But so far there is no any legislative act, just as there is no agreement with the democrats. The news of today was a message from China about the closure of the US Consulate in Chengdu. In addition, yesterday there was another portion of negativity from the Brexit negotiations: Michel Barnier said that the current negotiating position of the UK makes a new trade agreement unlikely. This is about selling the pound against the dollar today, even though the latter is weak. On the fronts of the pandemic, meanwhile, things are still extremely bad. The number of new cases in the world has confidently passed the 15 million mark, and a number of countries have not even reached their peak in the number of cases. All this will inevitably lead, among other things, to economic consequences for the third quarter. So, we should expect the next downward revisions of the forecasts for the growth rates of the world economy. The situation in the economy is already quite difficult without it. The US labor market is giving clear signals that there is no sign of a quick recovery. Yesterday's data on initial jobless claims showed an increase in the number of unemployed (over 1.4 million new applications). In fairness, it should be noted that the number of people receiving benefits on a permanent basis has decreased (to 16.2 million). Meanwhile, the earnings season in the US continues and yesterday it gave more cause for concern than for optimism. Southwest and American Airlines have traditionally reported 80% + drop in revenues and losses of $ 1 billion and $ 2 billion for this sector, respectively. Twitter reported a 23% drop in ad revenue and reported a billion-dollar loss. And even AT&T showed weak data: revenues fell by $ 2 billion.
Short
by Trade24Fx
Tesla and Microsoft, US vs China and jobless claims aheadYesterday was primarily interesting for the reports from some of the most overvalued companies in the US stock market (at least, judging by the basic investment metrics): Tesla and Microsoft. Tesla, as expected by hook or by crook, was able to show profit, or rather its illusion. But this opens the way for it to be included in the SP500 index and is another reason for optimism among buyers. As a reminder, we do not share it in any way and consider Tesla shares a bubble that will surely burst. As for Microsoft, despite the good numbers, shares at the premarket were under pressure. The reason for disappointment is the decline in the growth rate of revenue from cloud services, which is the main driver of the company's growth as a whole. Among other news, it is worth noting the continued growth of tensions between the United States and China. This time, the escalation took place not in the economy, but rather in politics. We are talking about the closure of the Chinese Consulate in Houston. Markets are waiting for the reaction from China. It is obvious that the development of the situation will invariably move from the sphere of politics to the plane of the economy. All in all, there is little cause for optimism. As for the United States, the focus is not so much on the problematic relations with China, but on the fate of the new package of economic stimuli, which should replace the package under the CARES act. Democrats and Republicans are still far from a compromise and exchange threats and curses at each other through the press. Meanwhile, the clock is ticking, counting is already going on for days. The current week is extremely poor for important macroeconomic statistics. Nevertheless, today is an exception in this regard - weekly data on jobless claims in the last 3-4 months has caused increased interest in the financial markets. So far, the situation in the labor market does not confirm the hopes of optimists in any way: 1.3 million new applications for unemployment benefits and 18-20 million people receiving them on an ongoing basis indicate that there is no confident recovery yet. Given the number of companies that have filed and continue to file for bankruptcy, it is not yet possible to expect a sharp improvement in the situation.
NASDAQ:TSLAShort
by Trade24Fx
1