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US Inflation, Senate Passes the Baton, White House and OPECThe key event of the current week in general and yesterday in particular is the publication of data on consumer inflation in the United States. YoY growth is still 5.4%. That is, another confirmation that all these talks about the temporality of inflationary processes are so far being broken about reality into small pieces. An interesting fact about yesterday's data. The jump in inflation in June was explained by a sharp rise in prices for used cars (and it was so, since the rise in prices for them in June exceeded 10%). But what is characteristic, in July, the rise in prices for used cars was minimal (about 0%), but inflation remained largely at the same level - 5.4% y / y. But yesterday, for some reason, everyone decided that a smaller than expected rise in prices excluding food and fuel is a reason to breathe out with relief - there is no inflation problem in the United States. In this regard, the dollar was under downward pressure, gold rose, as well as stock markets. In our opinion, the markets are clearly mistaken in their reaction yesterday. The ring around the Fed is tightening. On the one hand, strong data on the labor market, on the other hand, inflation of 5.4% indicates one thing - the time has come to tighten monetary policy. Therefore, today we will buy the dollar and sell on the US stock market. Even though the Senate voted for both the Infrastructure Bill and the Budget Bill. But now the floor is for the House of Representatives, and it is on vacation until at least mid-September (although there is talk of an early exit on August 23). So for the foreseeable future, the issue of the infrastructure plan has been paused. Another interesting piece of news yesterday, primarily for the oil market, was the information that the White House called on OPEC and its allies to increase production more actively. Let us remind you that India was engaged in this earlier, and China is very dissatisfied with what is happening on the oil market. In general, a critical mass of dissatisfied people has formed. Today is interesting with data on manufacturing inflation in the US, as well as statistics on GDP and industrial production in the UK.
TVC:DXYLong
by Trade24Fx
1
Senate Voting, Stock Market Reaction, and Oil RisesThe main event yesterday was the Senate vote on the infrastructure bill. Since it was a hard-won compromise between Democrats and Republicans, there was no particular doubt about its success (the result of voting 69 - "for", 30 - "against"). Another thing is that a budget bill in the amount of 3.5 trillion went to him. And here the Republicans were no longer so positively disposed, since they consider it populist. Now the next in line is the House of Representatives. It would seem, the Democrats have complete control, but in fact, everything may not be so unambiguously a foregone conclusion, since the House Democrats want to tie their vote on the infrastructure bill to the budget bill. In general, everything is rather complicated and confusing and, probably, it makes no sense to delve into all the details, but it is easier to wait for the final facts and work with them. The reaction of the financial markets looks more interesting against the background of this news. The dollar was growing, but it is supposed to grow against the background of comments from a number of FRB heads about the need to start curtailing the FRS quantitative easing program, as well as data on the US labor market. The US stock market, it would seem, received another injection of positive in the form of planned fiscal stimuli and was supposed to renew historical highs. But the dynamics of US stock indices was mixed. The more traditional SP500 and DJI rose and hit all-time highs, but the high-tech Nasdak was down. Once again, hinting that he simply physically cannot grow. So, the time has come to sell. Everything was pretty positive on the oil market. Although optimism is clearly premature. The number of new cases of diseases in China has reached the highest level in the past six months. Recall that last week it was the outbreak of the pandemic in China and the restrictive measures taken in connection with this that put pressure on oil and pushed it down. Now the situation has worsened, but oil is growing. It’s illogical. And if so, then we sell oil on an illogical growth.
FOREXCOM:NAS100Short
by Trade24Fx
1
Flash Crash in Gold, Falling Oil and Rising CryptocurrenciesThe most interesting thing on the financial markets happened yesterday with gold during the Asian session. Flash crash is rare enough to be called something trivial. On the other hand, gold and other assets have repeatedly become objects of planned attacks, market manipulations, banal technical failures and other reasons for flash crashes. Based on the timing of the fall in gold, everything looks extremely trite: summer, Monday, the low liquid Asian session are ideal conditions for flash crashes. In general, you should not write off gold from the accounts. It could have reached the key support of 1680. It did. On this it is worth putting an end to the issue of panic and calmly look at the situation. Has anything changed in market sentiment? No. Basic fundamental background? Ultra-soft monetary policies in place. Biden's infrastructure plan is on its way, which means fiscal incentives are here with us. That is, everything that pushed prices in the financial markets in the last year or so is relevant. The fall in gold cannot be attributed to the outbreak of a pandemic either, because it is a safe haven asset. In total, thanks to gold, which made it possible to buy yourself cheaper. In general, commodity markets have been under strong downward pressure since last week, and gold purchases can be hedged by, for example, oil sales. Until recently, the oil market ignored the growth in OPEC + production and the increase in the number of cases of COVID-19. But at some point, my nerves broke down and everything fell apart. The latest data on China's trade balance showed that oil imports were declining for the third month in a row, which, coupled with a sharp drop in road traffic in the country (up to 30%) due to restrictive measures, finally undermined the strength of buyers. But everything grows with the prefix crypto. Comments by Musk, Katie Woods and others at Day B did their job, and faith returned to the cryptocurrency market again. But faith is a very shaky ground that can easily burst into reality, for example, in the form of new taxes on cryptocurrency transactions in the United States, discussed in the infrastructure plan bill, or stricter regulation, or another outbreak of concerns about the unsustainability of mining. Overall, the current growth is a great sales opportunity.
FOREXCOM:XAUUSDLong
by Trade24Fx
1
Week in a Glance: NFP, Bank of England, Infrastructure PlanThe main event of the past week, without a doubt, was the publication of the data set on the US labor market. They were waiting for them with a sinking heart, since the preliminary signals from the ADP numbers were openly frightening (+ 330K with a forecast of + 800K). Recall that the importance of the data was due not only to the fact that they characterized the current state of affairs in the US economy, but also because they are one of the basic markers for the Fed. So, the data on Friday came out just great. The average hourly wage has grown more than forecasts and past values, which is an indirect sign of a shortage in the labor market and an active struggle between employers for workers. The unemployment rate fell sharply, which only confirmed the excellent shape of the US labor market. Well, the cherry on top was the NPP data: they came out better than forecasted and grew by more than a solid 943K. So it’s not surprising that the US dollar was not growing at all. The stock market is more complicated. On the one hand, an economy in great shape is a reason for growth. On the other hand, the Fed now has a reason for an earlier tightening of monetary policy. As a result, some of the US stock market indices were growing, and some were declining. The Bank of England left the parameters of monetary policy unchanged. As expected, no revelations were announced. Accordingly, there was practically no reaction from the markets. Another important event of the past week was the passage of the bill on the infrastructure plan in the US Senate. On Sunday, the final vote for the Senate took place and now it's up to the House of Representatives. Well, the reporting season, having passed its peak, slipped into the sunset. However, the overall picture remains unchanged - this season remains one of the best in recent decades. The coming week is interesting primarily with inflationary data from the US. If they again confirm the continuation of the inflationary spiral, then together with the data on the US labor market, they may drive the Fed into a corner. Of the basic positions for the week, perhaps, it is worth noting buying the dollar on the foreign exchange market, selling on the US stock market, selling oil on the commodity market.
TVC:DXYLong
by Trade24Fx
2
Expecting NPP Data and How to Make Money in USDCAD Pair?The Bank of England yesterday left the parameters of monetary policy unchanged. This was expected, since it would be risky to tighten monetary policy when inflation is not yet going through the roof (as, for example, in the United States), but economic recovery due to the delta is in question. Well, there is nowhere to mitigate it, plus you simply need space for possible maneuvers in the future (after all, it can always be worse than now). The pound practically did not react to this decision. However, today the situation in the GBPUSD pair, as well as in other dollar pairs on the foreign exchange market, may change dramatically. The data block for the US labor market is of increased importance in the current environment. Recall that the Fed is afraid to tighten monetary policy, fearing to harm the economic recovery. Therefore, strong NFP numbers will be a double positive for the dollar. On the one hand, there is a positive signal from the economy, and on the other hand, it is a reason to think that the Fed may begin to tighten monetary policy earlier than the markets expect. It is another matter that almost 900K NFP expected by the markets in the light of 300K + from ADP seems unlikely. And here the dollar can run into a double negative (see logic above). However, the correlation between NPP and ADP is traditionally rather weak (about 25%), so the level of uncertainty is quite high. For those who want to risk at a minimum and not bet on one or another outcome according to the data, we recommend that you pay attention that simultaneously with the data from the USA, a block of statistics on the Canadian labor market will be published. That is, the USDCAD pair is likely to face an explosion of volatility. In order to make money on it, it is worth placing two pending orders (buy stop, sell stop) in the USDCAD pair a minute before the data is released at a distance of 20 points from the price at that time. And then just wait until one of them works.
by Trade24Fx
1
Robinhood Is Now a Meme Share, ADP Perplexes, Oil DropsYesterday was rich in all sorts of events and new information. Let's start, perhaps, with the loudest one: the growth of Robinhood shares by some unrealistic 65% in the first minutes of trading. Recall that this is the same Robinhood, which went public last week and which turned out to be one of the most disastrous in terms of the results of price dynamics for companies of this size. What happened to the company in the last couple of days? By and large, nothing. Katie Woods with her ARK bought a fairly large block of shares, but, perhaps more importantly, the share was actively dispersed on Reddit. Looks like retail investors have found new fun to replace GameStop and AMC and its name is Robinhood. At least HOOD is the number one ticker on WallStreetBets Swaggy Stocks tracker. What does this all mean? That there was a great opportunity to earn money. Such ups are a great opportunity for more expensive and quick sales, and most importantly - guaranteed earnings. At least the experience of other meme-actions speaks about this. Common sense also speaks in favor of this: the current price / sales multiplier for the company is above 50 (!). For comparison, a very expensive and overbought Apple has less than 9. From the more global news of yesterday, it is worth noting the disastrous US employment data from the ADP. Naturally, they failed in relation to market expectations (growth was predicted by 695K, but in fact it was 330K), because + 330K is an excellent result. On the other hand, the data on the indices of business activity in the US in the service sector were unambiguously positive: the ISM Services index as a whole and in the context of its components turned out to be higher than expected and previous values. US oil inventories unexpectedly dropped last week, according to official data. Oil, which was already feeling unwell this week, has received a serious hole and may go to the bottom. The key to failure is a combination of an increase in oil production from OPEC + amid a new wave of the pandemic. Today is interesting primarily by the results of the meeting of the Bank of England. Monetary policy parameters are likely to remain unchanged. But in any case, the comments and assessments of the Central Bank are extremely important for the British pound.
NASDAQ:HOODShort
by Trade24Fx
1
Opium for China, Markets Rebuild Focus, SEC and CryptoWe've already written that the results of the last week are ideal for the growth of the US stock market. But he's not really growing. There is a feeling that the focus of the markets is shifting from expectations of a quick economic recovery to a new wave of the pandemic. It's just that while everything was happening somewhere in India or the UK, in the USA, with almost 70% of vaccinated people, it seemed that this did not concern them. But now, when the number of diseases per day in the United States has exceeded 100K per day (the current local peak reached on July 30) after 14K-15K, which were registered just a month before (June 22-23), investors are clearly pondering. And although it is incorrect to compare the potential damage from the current wave with what was a year ago, the general logic of the development of events is less obvious. And some states have already begun to take the first steps in this direction - we mean the restoration of the mask mandate. Moreover, sad news continues to come from China. They are bleak, primarily for the Chinese stock market, but what is happening today in the Chinese stock market may happen tomorrow in the US stock market. So, China continues to hit the tech lines. This time it went to game developers. A devastating article was published in the state publication, in which computer games were equated with intoxicating the brain with opium (the analogy was clearly not chosen by chance, given how painfully humiliating the opium wars were for China). Today is interesting primarily by the data on the US labor market from ADP, as well as by the indexes of business activity in the US. Given that the markets are now very concerned about the recovery of the US economy, the data will be of increased importance. For the cryptocurrency market, meanwhile, there are fewer reasons for growth. Yesterday, the head of the SEC (US Securities and Exchange Commission) Gary Gensler called on Congress to give the US Comptroller more authority to monitor the cryptocurrency market more closely. Actually, everything went to this. While the cryptocurrency market was a dwarf, regulators tried to ignore it and allowed anything. But those days are over. Considering that cryptocurrencies as a means of payment are primarily of interest to the shadow sector of the economy, the news that regulators are going to deal with them is extremely negative for the market as a whole, since it threatens one of the few arguments in favor of the existence of cryptocurrencies as such (meaning the function of the means payment).
BITSTAMP:BTCUSDShort
by Trade24Fx
Infrastructure Plan and Crypto, Powell Doesn't Last Forever, OilThe week began with a bouncy positive from the USA. It looks like the epic with Biden's infrastructure plan is heading for its happy ending. Perhaps not complete and final, but still. Senators say the $ 550 billion bill, the largest federal spending plan for public works in decades, will be passed within days. The plan, as it stands, includes about $ 110 billion in new spending on roads and bridges, $ 73 billion in power grid upgrades, $ 66 billion in railways, and $ 65 billion in broadband expansion. Recall that they plan to finance this holiday at the expense of cryptocurrency lovers. We are talking about tightening the reporting requirements for transactions with cryptocurrencies in order to tax them. Crypto brokers will be required to report digital asset transactions, including virtual currencies, to the IRS. And companies have to report cryptocurrency transactions worth more than $ 10,000. In this light, Bitcoin at 40K is a great opportunity to sell at a higher price. Last week, the Fed said its word very clearly and made it clear that the ultra-soft monetary policy of the US Central Bank is completely and completely satisfied. It would seem that the question is closed. But already in September the FRS may have a new head and possibly a new vision of the situation. In general, it is absolutely not worth relaxing as a buyer in the stock market, because the new chapter may well discern inflation with all that it implies. Yesterday was marked by oil sales. Apparently, the markets finally decided to pay attention to the fact that from August 1, production under OPEC + will increase by 400K b / d and will do this every month until December inclusive, increasing the total volume of production increase by 2 million b / d. Add to this weak data from China, hinting that the peak of the recovery has been confidently passed, and the economy is slowing down more and more, and we will get a 4% drop in oil by the end of the day.
TVC:UKOILShort
by Trade24Fx
8
Week in a Glance: Fed & US GDP, Earnings Season, Eurozone GDPThe past week turned out to be extremely eventful with all sorts of fundamental events of increased importance. The week began with a fall in the Chinese stock market, continued with the announcement of the results of the two-day FOMC Fed meeting, the publication of US and Eurozone GDP data, and all this was also accompanied by the peak of the reporting season, when the companies of the FAAMG group published their quarterly results. Not to say that the week gave more answers than questions. Let's start with China. Information that the country wants to make educational services a non-profit business, coupled with earlier calls to ban the listing of Chinese companies abroad, provoked a powerful wave of sales in the Chinese stock market. And although the financial regulator, at a meeting with bankers and investors, tried as best he could to extinguish the panic wave, saying that everyone misunderstood, downward pressure remains prevailing, infecting other markets with negativity. Even the US stock market last week failed to show everything it should have based on the results of the FOMC meeting and the reporting season. Everyone expected the Fed to admit the obvious last week - inflation was out of control and something had to be done about it. Instead, the US Central Bank launched an old record about unsustainable economic growth and the need to support the economy. In general, it is difficult to imagine more “pigeon” results of the FOMC meeting. But the reporting season, on the contrary, continued to delight and break records. Half of the SP500 index has already reported and 91% (!) of companies have exceeded analysts' profit forecasts. This is the best result since the 4th quarter of 2009. Failure to grow positive seems almost like a condemnation to current prices in the US stock market. Since the data on US GDP, published last week (came out well below analysts' expectations: 6.5% against the forecast of 8.5%) showed that the peak of the recovery is likely to have been reached and it is not as high as it seemed. This means that in the foreseeable future we will expect weaker economic data. In this regard, it will be extremely interesting to observe the data on NPP, which are traditionally published on the first Friday of the month. The eurozone, meanwhile, emerged from the recession, publishing very solid data on GDP growth rates. In addition to statistics on the US labor market, the coming week will be interesting for the results of the meeting of the Bank of England, business activity indices from the US, data on the Canadian labor market and retail sales in the Eurozone. In general, it will not be boring.
FOREXCOM:NAS100Short
by Trade24Fx
1
Failed US GDP Data, China Tries to Calm MarketsThe main event yesterday, after the extremely no results of the FOMC meeting, was the publication of preliminary data on US GDP for the second quarter of 2021. Seeing the published figures, the Fed's position becomes clearer. Everyone expected a powerful leap to the 8.5% region from the US GDP. In fact, it turned out 6.5%. Based on the forecast figure, the data came out completely and completely disastrous. Based on the average growth rate of US GDP in the pre-pandemic years, the numbers are excellent. But we are in a post-pandemic reality, and in it everyone was waiting for a quick recovery in the US economy, but it turned out to be far from so fast. And the figures for jobless claims show that it is very likely that the peak of recovery has already been passed. But this negative was offset by information from China. The China Securities Regulatory Commission met with major banks and investors to reassure them and iron out major corners such as banning Chinese companies from overseas from listing, and to clarify decisions regarding online education. Based on the dynamics of the Chinese stock market, investors were satisfied with the meeting. Another positive was the advancement of Biden's infrastructure plan up the legislative ladder. A procedural vote in the Senate with a 67-32 score in favor of the bill is a good indication that the infrastructural can pass the House by early next week. By the way, on this occasion there is interesting news for fans of the cryptocurrency: taxes on cryptocurrency will become one of the possible sources of funding for the infrastructure plan.
FOREXCOM:NAS100Short
by Trade24Fx
Fed is Still in Denial, and Giants Publish ReportsAs of this morning, almost everyone from FAAMG has reported with the exception of Amazon. The reporting was excellent, as expected. Double-digit revenue growth, sharply outperforming earnings forecasts - so much more to wish for. Not surprisingly, investor sentiment in the stock market has changed again. This was facilitated by a respite in a bloodbath in the Chinese stock market, as well as statements from the Celestial Empire that they still allow IPOs of Chinese companies in the United States (recall that it was China's dissatisfaction with an IPO in the United States that was one of the main reasons for the outbreak of the stock market massacre)... But it was far from complete calm, if only because everyone was apprehensively awaiting the results of the meeting of the Federal Reserve Committee on Open Market Operations. Recall that the latest inflation data drove the Central Bank into a corner. Well, how they drove. If we ignore inflation statistics, as the US Central Bank has done in recent months, then they have not been driven at all. Yesterday's results showed that the Fed is still at the stage of denial and has not made any progress towards the stage of adoption. Judging by the text of the final FOMC statement, one of the fastest economic recoveries in the history of the United States is still classified as "the economy is showing signs of improvement, but has not yet recovered." And there is no need to talk about inflation at all - it is still ignored by the Central Bank. Or not even worse. The Fed believes that inflation in the long term has not yet reached the target of 2% (they wrote this in all seriousness in the communique) and the Fed (it turns out) is doing everything possible to accelerate it to this very 2%. Let us recall the latest figures: consumer inflation 5.4%, industrial inflation - 7.3%. It is not surprising that with such a picture of the world, the Fed did not even think about raising the rate yesterday or even adjusting the parameters of the quantitative easing program. The reasons for this blindness are generally obvious. The Fed is afraid of the bursting of bubbles that could bury financial markets and the financial system as a whole. And they pull the rubber to the last. Judging by the reaction of the US stock market to the results of the FOMC meeting, they are doing very well. Among other news, it is worth noting the return of the dynamics of oil reserves in the United States to its usual course. According to the EIA and API, they fell again, recalling the shortage in the oil market. However, buyers were not strongly inspired and oil continued to drift near the top. As for today, in addition to Amazon reporting, we are waiting for preliminary data on US GDP for the second quarter. The data will most likely be great. But they still do not answer the main question. And it sounds like this: "What will happen next?" It is likely that the pace of economic recovery is at its peak. And everyone roughly guesses what follows the peak. But I don’t want to think about it yet. But you have to. So we also follow the jobless claims figures as the most efficient available indicator of US economic statistics.
FOREXCOM:NAS100Short
by Trade24Fx
7
The Chinese Stock Market Fall, Reporting of Giants and the FedThe Chinese stock market is in free fall this week. Which looks especially strange against the background of a general increase in risk appetite. But the fact remains, according to the results of yesterday, the size of the fall this week approached the level of 10%. To put it mildly, a lot. The reason was the information published over the weekend about the new rules regarding the educational technology sector. In particular, that now it should be a non-profit activity. For buyers in the US stock market, this is a pretty loud warning signal. And they heard it clearly yesterday, as the Nasdaq fell 2%. Although things could go according to last week's scenario, as yesterday's reports from Apple, Microsoft and Alphabet left no room for doubts and negative thoughts. In general, as we noted at the start of the week, you need to wait for at least tonight, when the mood can spoil the Fed or the end of the week, when the positive wave subsides and the markets can think about taking profits. But let's talk more about the Fed. The central bank is, by and large, cornered. After the latest data on NFP and other macroeconomic statistics, it will no longer be possible to hide behind the second part of the “double mandate”. The economy is showing too aggressive recovery rates to be doubted and argued for inaction by the fragility of growth. That is, the Fed is left face to face with inflation. We will remind, earlier in the US Central Bank they said that inflation is a temporary phenomenon, which means that it can be ignored, because it is not representative and is a statistical outlier. But recent data have shown that it is not only not decreasing, but is continuing to grow. This applies to both industrial inflation and consumer inflation. Is there any reason to expect inflationary pressures to decrease in the foreseeable future? Definitely not, it is enough to look at the graphs of the cost of container shipping and transportation of dry cargo (Baltic Dry Index), or the dynamics of commodity markets (Bloomberg Commodity Index) to understand the pressure on producers' costs will continue. This means that industrial inflation will grow, followed by consumer inflation. All this leads to one conclusion - it's time for the Fed to act. And while it is very unlikely that we will see concrete steps today, the conversations and discussions at the FOMC meeting can be extremely substantive. That is, the Fed can give a signal that they not only see the problem, but also recognize the need to solve it. If all this is so, then sales in the stock market can not be avoided. But the US dollar will have a good chance of growth.
FOREXCOM:NAS100Short
by Trade24Fx
1
Bitcoin Rise, Earnings Season Peak, and Tesla SurpriseThe most interesting thing happened yesterday in the cryptocurrency market. Last week, following a conference with the participation of Catty Woods, Elon Musk and a number of other hype lovers, it seemed that long-lost optimism returned to the cryptocurrency market. Which once again confirmed that the current prices for cryptocurrencies in no way reflect the fundamental value of the asset, but is an indicator of market sentiment. So, putting on rose-colored glasses again, crypt lovers again saw that the world of the crypt is beautiful and promising. In the old / new pink glasses, the news that Amazon had posted a vacancy announcement for the “Digital Currency and Blockchain Product Leader” was taken almost as information that cryptocurrencies are becoming a full-fledged means of payments in the Amazon ecosystem. Considering that Amazon is not Tesla for you in terms of the scale of commerce, everyone rushed to buy cryptocurrencies indiscriminately. It would seem that Tesla's case clearly showed how all this will end, but the memory of the markets, apparently, is measured in a few days, if they have it at all. It didn't take long to wait for comments from Amazon and the inevitable fall in prices in the cryptocurrency market. The company said that all these rumors do not correspond to reality and they do not plan to accept any bitcoins for payment at Amazon. By the way, how many cars did Tesla sell for bitcoins there? There is no official information. I wonder why? Maybe because bitcoin as an actual means of payment for the entire time of its existence has been used in 2% of cases out of 100% and, accordingly, there is simply nothing to report about. Perhaps this is all the result of a general wave of relief from the scare at the start of last week. Moreover, today the quarterly reports will be published by Apple, Microsoft and Alphabet. And by the end of the week, all of the five FAAMG will report. Considering how well these companies are in shape, as well as the segments in which they operate, optimism seems reasonable and somewhat inevitable. As a reminder, a quarter of SP500 companies have already reported and 88% of them showed results higher than analysts' forecasts. Tesla reported yesterday. The company's financial results were frankly surprising. Musk's call to cut the bones seems to have been heard. At least this alone can explain the growth in profits against the background of a decrease in revenue from the sale of regulatory loans, which have always been the only source of profit for the company. For the quarter, profit exceeded $ 1 billion on regulatory loan sales of $ 354 million. This is definitely a success. And the losses from the ingenious investment in bitcoins amounted to only 23 million. But Tesla's problem is that all this positive and positive in the foreseeable future has long been taken into account and recounted in the prices of the company's shares, which are still radically out of touch with reality.
BITSTAMP:BTCUSD
by Trade24Fx
2
Week in a Glance: Panic Attack, ECB and Britain's ProblemsLast week turned out to be very eventful, if not in terms of news, then in price dynamics, for sure. On Monday, the markets were naturally attacked by panic. As a result, the day became one of the worst for the Dow Jones. Tellingly, an attack of panic arose out of the blue: fundamentally, nothing foreshadowed trouble. The reporting season is likely to be the best for the US stock market since late 2009. Almost all of the reporting people easily beat the already very optimistic forecasts of analysts. Last week NetFlix, Snap, Twitter, Intel and many others did it. Given the groundlessness of Monday's fall, there is probably nothing strange in the fact that since Tuesday the US stock market has been growing almost non-stop, renewing new all-time highs. What is at least Nasdak above 15K. We have written about the insanity of current prices more than once, but the very fact that prices are detached from reality does not mean that they should fall today or tomorrow. Quite the contrary, this week the reporting season is at its peak. Reporting by tech giants Apple, Microsoft, Amazon, Facebook, Alphabet and others. Considering that the companies of the FAAMG group account for more than half of the capitalization of the Nasdaq, the index will most likely have no choice but to grow this week. Our idea in this regard: wait for Friday and actively sell Nasdak. The fact is that there will be no reasons for the growth of the Index after the last ones from FAAMG are reported on Thursday, and the data on US GDP for the second quarter will be published in the USA. Although in fact, everything may end on Wednesday following the meeting of the Committee on Open Market Operations of the FRS. Hints of an imminent tightening of monetary policy in the United States may well provoke a new attack of panic. What else is perhaps worth selling this week is the British pound. Last week, despite the growth of the British currency, the fundamental background for the pound was extremely gloomy. The new wave of the pandemic provoked disruptions in the functioning of the economic mechanism, resulting in empty shelves in supermarkets and a lack of gasoline at gas stations. Even a special term was invented for this phenomenon: "pingdemia" (if a person was seen in contact with a sick person, a special application sends him a signal - a ping - to leave in 10 days of self-isolation). And then there is the conflict with the EU over the Brexit agreement regarding the Northern Ireland protocol. In general, everything speaks in favor of selling the British currency. Last week, the ECB left the monetary policy parameters unchanged and was extremely peaceful in the sense that the Central Bank was more than satisfied with the ultra-soft policy.
Short
by Trade24Fx
ECB Is Stable, Jobless Claims Disappointing, Britain vs EUThe main event of yesterday was the ECB meeting results announcement. The main fear of the markets was that the Central Bank would start talking about tightening monetary policy. Although this fear was rather irrational. Unlike the US with its 5.4% consumer inflation, the situation in the Eurozone is much better. Their inflation rate of 1.9% is even lower than the ECB's target. By the way, about the ECB's target. A couple of weeks ago, the European Central Bank updated its strategy and now by their goal they mean not just the inflation rate of 2%, but also some reasonable deviation from it. That is, say, 2.5% inflation may well be ignored with the wording "deviation is permissible and does not require immediate intervention." Knowing this ins and outs, one could fully rely on the fact that the ECB would not change anything or announce imminent changes. Especially in conditions when the "delta" is fierce. So it is quite logical and natural, the parameters of monetary policy remained unchanged, and the ECB itself was very “dovish”. For the euro, this is a so-so signal, but the markets should have exhaled with relief, as the inevitable continues to drag on. The exhalation of relief was somewhat spoiled by the data on jobless claims from the US. The number of initial applications for unemployment benefits in the US rose rather unexpectedly above 400K and once again raised questions about whether the US economic recovery has reached a peak and whether we are expecting weaker statistics ahead. Another interesting piece of news is the skirmish between Britain and the EU. Britain wants to renegotiate the Brexit treaty on the Northern Ireland protocols. We will not describe in detail the groans of exporters and importers about this, we will only note that the issue of Northern Ireland and its borders was the main stumbling block on the way of the treaty between the EU and the UK. And Johnson's attempt to renegotiate the terms of the contract may be justified, but by and large it could have very bad consequences. The fact is that the EU has already dismissed the proposal to revise the conditions. To which Britain began to threaten the use of Article 16, which allows unilateral revision. And this can already be interpreted as a direct violation of the terms of an international treaty. Considering that Johnson himself signed it, it will not be possible to attribute such actions to the mistakes of predecessors, so a very serious scandal is potentially brewing in the already strained relations between the EU and the UK. In total: we sell the pound on the rise.
Short
by Trade24Fx
1
Musk Forces Crypto Again, Markets Prepare For ECBThe B Word Conference was held yesterday. Its goal is to whitewash Bitcoin, which has recently been under the yoke of fundamental negativity and seller pressure. The speakers of the conference are a set of heavyweights in terms of influencing the immature minds of crypto investors: Kattie Woods (one of the most active adherents of the cryptocurrency market among institutional investors), as well as "our everything" Elon Musk, who either renounces the crypt or assures her of his love for her to the grave, - they tried to de-demonize the image of cryptocurrencies. Musk specifically stated that Tesla is currently the only publicly traded stock he owns, and that he personally owns bitcoin, dogcoin, and ethereum. And in general, cryptocurrencies are great, even though the mining activity is not environmentally friendly, but this is all due to the outdated proof of work protocol, but proof of state is another matter and in general it's time for Tesla to be friends with bitcoins again. In general, the noise was raised, and the rise in prices in the cryptocurrency market at the end of yesterday showed once again that there is no fundamental value under them - this is a pure hype product. In general, prices in financial markets continue to live in their reality. The sales on the US stock market have already been forgotten. Nobody even remembers about the new wave of the pandemic and the threats that it promises. Or take the oil market, for example. It would seem that the week started with sales against the background of fundamental negative (new OPEC + quotas), which was strengthened by data on oil reserves in the United States: they showed growth for the first time in more than 2 months. But this did not prevent oil from growing. Since this happened in sync with the growth of other risky assets such as the stock and cryptocurrency markets, obviously, we have a continuation of the "rally of everything". This means that divergences between the real economy and its projection in the minds of investors are increasing. The main event of today is the announcement of the results of the ECB meeting. If it were not for the new wave of the pandemic, one could talk about intrigue and potential tightening of monetary policy. But under current conditions, the status quo is the most likely scenario for the development of events.
TVC:UKOILShort
by Trade24Fx
3
Panic Subsides, Bezos Flies into Space, and Nvidia Splits StockIf yesterday the stock markets poured in for no particular reason, today they also grew in general without any special reason. In the sense that nothing fundamentally new in the news background happened. This is the specificity of price dynamics, behind which is not fair value, but human sentiments. The main event of yesterday from the point of view of the hype in the news background was the successful flight into space of the main rich man of the planet, Jeff Bezos. After that and Branson's flight last week, the era of space tourism can be considered officially kicked off. The capacity of this new market is measured in hundreds of billions of dollars (trillions by some estimates). So, Blue Origin and Virgin Galactic look like very promising shopping destinations. Especially when you consider that after Branson's flight, Virgin Galactic's share price lost about 50%. Just in case, we recall that private investment in space is still available exclusively through Branson's company. Another important event for the US stock market was the split of Nvidia shares. Stocks split 4 to 1. The motivation is typical: to make stocks more accessible to small investors. The antagonistic approach is the refusal of splitting in order to cut off all kinds of incompetent subjects from participation in the capital. The most prominent adherents of this approach are Warren Buffett and his Berkshire Hathaway. One share of the company is now worth about $420K. The reporting season in the US continues. The top event of yesterday was the publication of NetFlix results. They cannot be called breakthroughs: the profit came out even slightly worse than market expectations. The number of subscribers was formally higher than expected, but in reality 1.5 million is the weakest result for the company in recent years.
NYSE:SPCELong
by Trade24Fx
1
Doe's Worst Day Since October. What's Going On?Yesterday can hardly be called a summer day for the financial markets. There was no trace of the usual sleepy movement within narrow ranges. Stock markets tumbled, commodity markets followed. The cryptocurrency market, of course, could not pass by and was also declining at an accelerated pace. At the same time, safe-haven assets such as the Japanese yen or US Treasury bonds were in high demand. As you can see, the movements were massive. That is, we are not talking about the nuances of a particular market, but about general systemic issues. In short, we observed a movement (or maybe flight) of capital from risky assets to risk-free ones. The formal reason was the market acceptance of the fact that the delta strain has spawned a real new wave of pandemic, with all that it implies. For us, in the fundamental background, absolutely nothing has changed. We have been writing about the delta and its consequences for more than a month now, as well as about the fact that prices on the stock and commodity markets are far from reality and sooner or later they will have to move towards their fair value. So we think that what is happening is quite natural. The whole question is how destructive the panic wave will be. Note again that the underlying fundamental background plus / minus is unchanged. This means that the markets can calm down at any moment. However, next week the next meeting of the FOMC will take place, which may add fuel to the fire in the form of tightening monetary policy, if not in practice, then at least in words. And this week, the ECB, in turn, may puzzle the markets. As for our recommendations, they are unchanged: we continue to sell on the stock, commodity and cryptocurrency markets, buy the dollar and other safe-haven assets.
DJ:DJIShort
by Trade24Fx
10
Week in a Glance: US Inflation, Powell and the Reporting Season From the macroeconomic statistics and general importance viewpoint, the key event of the last week can be considered the publication of inflation statistics from the United States. We are talking about both consumer and industrial inflation. Markets were hoping for signs that inflation was starting to slow down. To a large extent, such expectations were associated with the comments of a number of FRS officials, who stated about the anomalousness and temporality of the latest inflation data. But the reality was quite different from expectations. Instead of lowering inflation, we have seen the inflationary spiral continue to unfold. Consumer inflation came out much higher than forecasts and the previous value, reaching 5.4% (yoy). Industrial inflation, in general, showed the highest growth rate in the entire history of observations, 7.3% (yoy). After such data, all attention was turned towards the speech of Powell, who was reporting to Congress. The fact that inflationary processes are uncontrollable is too obvious not to notice it. Nevertheless, Powell continued to bend the old line: yes, there is inflation, yes, it is much higher than the Fed's target, but the Central Bank will not do anything about this yet - it will dissipate over time. We have already written about the reasons for this position, we only note that it was difficult to demonstrate a more “dovish” position in the current realities. Formally, such a position plays into the hands of buyers in the stock market and sellers of the dollar in the foreign exchange market. But in reality, this position does not negate the fact of inflation and the need to tackle it, if not today, then tomorrow. Therefore, our recommendation remains unchanged: in the medium term, we buy the dollar and sell on the US stock market. Moreover, the latter, according to the results of the week, even despite the ultra-soft position of Powell, despite the excellent start of the reporting season, despite the good statistics from the USA, could not demonstrate growth. And if prices do not rise on a powerful positive, then this is a clear sign of their imminent collapse. The oil market last week clearly demonstrated how quickly and for no particular reason, unrestrained growth turns into despondency and a decline in prices. Although, probably, everyone who needed to know knew about the unscheduled OPEC + rally prepared on Sunday and the decision to increase oil production by 0.4 million b / d from August. So, medium-term oil sales are another promising trade idea, in our opinion. The current week promises to be much quieter than the previous one, but the ECB meeting, coupled with the reporting season approaching its peak, is unlikely to let you breathe out quite calmly.
NASDAQ:NDXShort
by Trade24Fx
Stock Market and "Dove" Powell amid Excellent ReportingThe start of the reporting season for the second quarter cannot be called anything other than excellent. Yes, each sector has its own reasons for growth: banks are growing due to write-offs from reserves, airlines due to the return of passengers, commodity companies due to higher prices for raw materials. But most importantly, financial performance is improving across the board at a pace that exceeds market expectations. If this kind of start is multiplied by the extremely "dovish" rhetoric Powell voiced during the testimony in Congress this week, we get ideal conditions for the explosive growth of the US stock market. And there is still a record pace of economic recovery in the United States. Jobless Claims, for example, came out yesterday at 360K, which is the lowest since the start of the pandemic. What do we have in fact? Black weekly candlesticks in SP500 and Nasdak. Naturally, the question arises, if the market cannot grow on such a frank positive, what will it do when the positive becomes less or even negative appears? In our opinion, all these are signs of an impending collapse of prices in the stock market. So, our recommendation “sell” is becoming more and more relevant every day. Among other news of the day yesterday, it is worth noting statistics from China, which, although it came out generally higher than analysts' expectations, is nevertheless much worse than the data for the past period, which suggests that a quick recovery is being replaced by a simple recovery and, in general, there is a feeling that China's economy is losing momentum. As a result, non-residents sold 10 billion yuan ($ 1.7 billion) worth of shares in Chinese companies on Wednesday, a record high since September. That is, the first rats are already starting to flee from the ship.
NASDAQ:NDXShort
by Trade24Fx
5
Powell At the Bargaining Stage, OPEC+, Inflation in the USAThe US inflationary data another piece showed that the situation continues to deteriorate rapidly. Manufacturing inflation showed the highest value in the entire history of observations. Naturally, after that, everyone listened with double attention to the speech of the head of the Fed, Jerome Powell, in Congress. Recall, before that, he was at the stage of deep denial, arguing that the current inflation in the United States is a statistical anomaly and a temporary outburst of data. Judging by his yesterday's comments, the stage of denial is beginning to move to the stage of bargaining. On the one hand, the head of the FRS continues to argue that inflation in the United States is an extremely temporary phenomenon. On the other hand, Powell said that inflation is not moderate, but well above 2%. That is, it recognizes the fact of inflationary pressures. But in the end, we'd still slip to the old mantra, what else needs to be seen, that this is a temporary shock, etc. One of his remarks about timing was interesting - he said a phrase about the six months that need to be monitored for inflation. Well, the more interesting it will be to find out the opinion of other FOMC Fed members, which they will voice in a couple of weeks at the next meeting of the Committee on Open Market Operations. In general, despite the continuation of the "dovish" rhetoric on the part of the head of the Fed, the current conditions are favorable for medium-term dollar purchases and sales in the US stock market, because with such data tightening of the FRS monetary policy looks inevitable, the only question is when is the stage of bargaining transforms into the stage of acceptance with all that it implies. What else can be sold besides the US stock market is oil. Yesterday it was reported that Saudi Arabia and the United Arab Emirates agreed and OPEC + is back in business. Well, as agreed, in fact, they accepted the terms of the UAE, which will now work with the production base not 3.17 million b / d, but 3.65 million b / d. Recall that this unlocking means that from August production will grow by 400K b / d, and this will be so every new month until December 2021. That is, in six months, OPEC + will increase production by 2 million b / d. Also, the increase in UAE quotas is the opening of Pandora's box. Iraq has already stated that they want that too. And today, we can hear about new people who want to increase production with reference to the UAE precedent.
TVC:UKOILShort
by Trade24Fx
1
Dollar and Inflation, Reporting Season StartYesterday, US inflation data reminded markets that a tightening of the Fed's monetary policy is increasingly on the horizon. Over the past couple of weeks, amid comments from a number of FRB heads, the markets have decided that the previous inflation figures are a statistical anomaly that is temporary in nature. Well, yesterday's data showed that nothing is more permanent than temporary. 5.4% growth in consumer prices is the highest inflation rate in the last 13 years. But the markets believed and hoped that the rate of price growth would be less than 5%. But it didn't work out. The reaction of the financial markets was quite natural. The US dollar was growing and the stock market was under pressure. In general, the dollar has excellent chances for growth by the end of this week and it is not too late to buy it. As, however, and selling on the US stock market. It should be noted, however, that the start of the reporting season is great. JPMorgan Chase and Goldman Sachs easily beat analysts' forecasts. We wrote yesterday that strong trading and investment areas, coupled with write-off of reserves, are the key to a sharp increase in profits. That both banks demonstrated yesterday. PepsiCo, on the other hand, has become one of the beneficiaries of the opening of restaurants and the general return of the United States to the norm: the demand for the company's products has risen sharply, provoking significant improvements in both revenue and profit. Today promises to be no less eventful in addition to the continuation of the reporting season (reported by Bank of America, Wells Fargo, CitiGroup, BlackRock), inflation statistics will be published from the UK, as well as the US (this time manufacturing inflation). In addition, the Bank of Canada will announce its decision on the parameters of monetary policy, and Jerome Powell will begin his two-day address with a semi-annual report on monetary policy in the US Congress. Our basic trading ideas are unchanged: buying dollars, selling on the stock market, looking for points to sell oil.
TVC:DXYLong
by Trade24Fx
US Reporting Season and Crisis of China's Technological SectorThis week starts the reporting season in the United States. If you believe the forecasts of analysts, it can be the best since 2009. As expected, the quarterly profit of companies from the SP500 index will increase by 64% (it was better only in the fourth quarter of 2009 - then the growth was 109%). It is not surprising that against the background of such expectations, buyers in the US stock market continued to buy and drive stock indexes to new vertices. What sectors will be height leaders? It is enough to remember the schedule of any of the product indexes to understand - the energy sector and the sectors of the materials. It is here that experts are waiting for the maximum increase in prices for stocks. As for this week, the banks are reported on the start of the season. Those of them who have serious trading departments almost certainly demonstrate rapid growth (Goldman, Bank of America, etc.). But more banks focused on traditional deposit and credit services will feel less comfortable: the ultra-naughty monetary policy is eating margin and does not give financial results to excavation. However, the removal of funds from reserves will allow, albeit artificially, but to increase profits. So the positive attitude of the markets as a whole is justified. But where recently there is a very positive attitude, so it is in the technology sector of China's stock market. After the authorities of the Middle Kingdom began betraying the DIDI for their listing in the United States, alone became the other IT giants. As a result, according to the Bloomberg calculations, an equilibrous basket of three Chinese Internet giants (Bat - Baidu Inc., Alibaba Group Holding Ltd. and Tencent Holdings Ltd.) over the past 12 months fell by about 2%. For comparison: briefcase of similar companies in the US - Facebook Inc., Amazon.com Inc., Apple Inc., Microsoft Corp. and AlphaBet Inc. (FAAMG) grew by 40%. Although again, if someone is scared to take a clean short position on the US stock market of the US stock market (a bubble around the bubble has been inflated for a long time), now there is a good opportunity for Hedge - buy Bat and sell Faamg. Moreover, today, consumer inflation data in the United States can remind markets for the tightening of the Fed monetary policy. And then Faamg will definitely not last.
NASDAQ:NDXShort
by Trade24Fx
4