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Feast in time of plague: the main result of 20202020 was an economic disaster, if not a catastrophe, as the global economy plunged into one of the worst recessions in history. Entire sectors of the economy, albeit temporarily, have practically ceased to exist: air travel, tourism, physical retail, restaurant business, etc. And against the background of all this, the US stock market (case of the Nasdaq Index) ends the year with growth by 100% (!), if we take the March lows as a mark, or by almost 50% if we take the start of the year. It looks somehow irrational. But there really is logic. Trillions to save the global economy and ultra-low interest rates have fueled the insatiable appetites of avid investors. Only the Central Banks of the USA, Europe and Japan have poured about $ 8 trillion. But there are other central banks and also governments. As a result, about $ 21 trillion was injected to save the world economy. Obviously, without these injections, the crisis would have been even larger and more destructive. But the cost of this salvation is too high. This is not only about the swollen balance sheets of central banks and a sharp increase in budget deficits and government debts, but also about the fact that a significant part of the aid went not to the real sector, but to financial markets. As a result, we have Bitcoin at 27K (while at the start of the year traders did not give it even 5K, and the funniest thing is that the January’s BitCoin as an asset does not differ from the December one), the Nasdaq Index is near 13K, copper at eight-year highs, and we are not speaking about Tesla, Nio and others like them. It would seem that if against the background of a record economic decline, the stock market was growing, then in 2021, with the economic recovery, it is even more doomed to growth. But if we recall the basis of the current growth, the conclusion does not seem so clear. Why? Because the Governments and Central Banks have already put all the cards on the table and even shook a few jokers out of their sleeves. There is practically nowhere to cut rates further or to expand quantitative easing programs, as well as to endlessly and uncontrollably increase budget deficits. The feast is over. And 2021 will be the year of the hangover. When it will be necessary to clean up the rubble: deal with public debt, budget deficits, central bank balance sheets, etc. That is, we have every chance of getting the reverse process, when money injections will be replaced by their withdrawal with all the consequences for overpriced markets.
DJ:DJIShort
by Trade24Fx
2
Another portion of steroid growth, and a new attack on MaYesterday in the financial markets were concentrated on the news that Trump had signed a stimulus bill for the US economy and on the expectations of the second attempt by the Democrats to increase stimulus checks from $ 600 to $ 2,000 (as Trump wanted). The U.S. House of Representatives had voted earlier to increase stimulus payments to qualified Americans to $2,000 from $600, sending the measure on to the Senate for a vote. While it is not clear how the measure will fare in the Senate. In general, there is nothing strange in the next round of growth in demand for risky assets. New all-time highs for the US stock market, Bitcoin at 27K +, the rise of commodity markets - these are links in the same chain. In this light, as well as because of another rate hike by the Central Bank of Turkey (last week they raised the rate by 2% to an incredible 17% for the present), it is perhaps worth recalling our recommendation to buy the Turkish Lira. The huge interest rate differential cannot fail to attract profit-hungry investors. So the chances of further growth in the Turkish Lira are pretty high (all these carry-trade things). At the same time, the markets no less habitually and traditionally ignored the potential and real fundamental negative. For example, experts predict that after the holidays it is worth expecting a sharp increase in the number of COVID cases and an intensification of the pandemic. The oil market continued to pretend that OPEC + would not inject an additional 0.5 million b / d of oil on January 1, 2021. They also tried not to notice Russia's desire to increase production by another 0.5 million b / d from February 1. China continued attempts to destroy Jack Ma's empire. Ma should not have criticized China's financial regulators and state-owned banks at a Shanghai summit on October 24. As a result, Ant's IPO was blocked, an antitrust investigation against Alibaba was initiated, and now Ant Group has been ordered to cut operations. The loss of a third of Alibaba's capitalization is Jack Ma's personal tragedy, but it is also a good opportunity for investors to buy shares of the company not at $320, but at $220.
Short
by Trade24Fx
2
Week in a Glance: Brexit, New Strain, US Stimulus, Tesla and XRPThe main event of the last week without a doubt is a trade deal between the EU and the UK. The sides reached an "agreement on zero tariffs and zero quotas." This outcome was the most likely, so nothing extraordinary happened. The problems of the UK do not end there: a new strain of the virus, the situation with the pandemic, lockdowns, damage to the economy - this is only a part of the negative that Britain will have to deal with at the start of 2021. And if the negotiations between the EU and the UK looked like a tragedy, then the epic with stimulus in the US looks more like an absurd comedy. Last week, Democrats and Republicans finally came to an agreement. Happy end? No, because Trump decided to remind everyone about himself and refused to sign the bill, agreed in both the House of Representatives and the Senate. Rationale - $ 600 stimulus checks is not enough, $2000 is needed. And after that even more ridiculous things began. The Democrats agreed with Trump's demand and wanted to re-vote the bill with checks for $2000, but the Republicans (!) blocked this initiative. In general, it was impossible to watch what was happening without laughing. Especially, after President Donald Trump signed the $900 billion coronavirus relief package on Sunday. On pandemic fronts, markets were focused on a new virus strain that had already made its way to Germany and the US, and news of new restrictions in the UK. Tesla's inclusion in the SP500 index was an important event last week. But a sharp rise in shares did not follow. On the contrary, on the first day of trading in the new status, Tesla lost about 6.5%. The scandal of the week can be considered the SEC's lawsuit against Ripple, accusing it of an unregistered placement of securities for $ 1.3 billion. As a result, XRP cryptocurrency lost over 60% of its value. The coming week will be the last week of the outgoing year. Given that this is a week of Christmas break in many countries, low liquidity will be present in the markets, which will remain an extremely explosive moment, coupled with a high probability of starting profit taking.
Short
by Trade24Fx
Why the pound didn't skyrocket on news of the deal?If yesterday was a semi-holiday day, today is a full one. Merry Christmas to all our readers. But for the British apart from Christmas there is another reason to be happy - a trade deal between the EU and the UK. The parties reached an "agreement on zero tariffs and zero quotas." But the pound reacted to this yesterday without significant growth. Let's figure out why and what to expect from him it in the nearest future. To begin with, the most likely scenario actually happened, leading analysts estimated it at 80%. Accordingly, it has already been largely incorporated into the price. If someone has forgotten, we remind you that in May the pound was worth 1.21, and last week it reached 1.36. 1500 points of growth (partially due to the weakness of the dollar), but this is the discounting of the markets for the deal. Plus, the treaty still needs to be ratified. And after months of nervous negotiations, many do not fully believe that from January 1, 2021, the EU and the UK will not use the WTO rules. Also, do not forget that the trade agreement is only part of the picture formed by Brexit and many of its elements are very unattractive for the UK economy (The Bank of England said that even with a trade deal, the UK's gross domestic product is likely to be hit by 1% because of the Brexit in the first quarter of 2021). The massive exodus of bankers and financiers from London, which risks ceasing to be the financial center of Europe, the transfer of production facilities by a number of manufacturers to Europe from Britain. Even trade agreements between the EU and the UK, despite the success of the negotiations, will change for the worse: food safety regulation and exporting rules to product certification will change. And there are only a fraction of the price that Britain will have to pay to exit the EU single market. In total, the upside potential of the pound is more than limited. At any moment, the attention of traders may switch to the pandemic situation in Britain, lockdowns and the country's economy in the foreseeable future, and then the only option that they will consider is selling the pound. So, we think current pound prices is an excellent selling opportunity. And thanks to the deal, that we can now sell not at 1.32, but at 1.36.
Short
by Trade24Fx
2
Brexit, US vaccination failure, China vs AlibabaThe main event yesterday, which in many ways gave rise to optimism in the financial markets, was the information that the UK and the European Union are approaching a post-Brexit trade agreement after months of tense negotiations. The deal is expected to be announced on Christmas Eve. The growth of the pound in the light of such news is quite natural, but its continuation seems to be very limited both in volume and in time. The fact is that the country is tightening the lockdown and spreading the toughest measures against the background of almost 40,000 new cases of coronavirus per day. At the same time, the number of registered deaths was 744, which is the highest figure since April. Note that with more than 68,000 deaths from the virus, the UK is one of the hardest hit countries in Europe. So, we will use the growth of the pound as an opportunity to sell it. Trump refused to sign the stimulus bill and left the White House to celebrate the holidays. So, either the legislators will urgently adopt the amendments and approve Trump's "Wishlist" in the form of increasing the amount of one-time checks from $ 600 to $ 2,000, or after 5 days without the President's signature, an automatic veto will be imposed on the bill. And that's not the only gloomy news for Americans on Christmas Eve. The vaccination process has so far been effectively disrupted. Of the 20 million planned in December vaccinated, there are only 1 million (!) so far. Plus, according to recent polls, 4 out of 10 Americans surveyed do not want to get vaccinated. Jack Ma was also unlucky yesterday with his Alibaba. China's state market regulator said Thursday that it has launched an investigation against Alibaba over monopolistic practices. Today is a shorter day in most financial markets, and tomorrow it is generally a day off.
Short
by Trade24Fx
5
33 misfortunes of pound, U.S. stimulus and Trump So far, the main loser of the week in fundamental terms can be considered the British pound, which literally fell upon all the misfortunes of the world. A new, more infectious strain of coronavirus has provoked almost the whole world to sharply limit contact with the island, which is fraught with both massive economic damage and disruptions in the supply of goods, including food. British economy in 2020 was in trouble without all these issues^ the country is going through the worst period since the Great Frost of 1709 (!). Analysts expect the country's GDP to fall by 11% in 2020. And that's the half of the trouble, because now the UK has a chance of a double dip recession. Recall, technically, a recession is a decline in GDP for two quarters in a row. For the UK it happened in the 1st and 2nd quarters of 2020. And now analysts warn that the fourth quarter 2020 may end in the red, and given the current tough restrictions, which will last at least a month, or even two, there is every reason to expect a decline in GDP in the first quarter of 2021. And, finally, everything is traditionally bad with Brexit. London made an offer to Brussels, which europeans should not refuse (meaning a 35% reduction in fish catch in British waters by Europeans instead of the starting requirement of 60%). But the EU rejected the offer, which plunged the already gloomy British into despondency. Boris Johnson, to finish pound, has ruled out extending the deadline for reaching a post-Brexit trade deal into 2021. In general, everything is not very good with the pound and its current prices seem to be extremely high against this background. This means that there is an opportunity to generate extra profits. We are talking about selling the pound. Primarily against a very oversold dollar. Trump also reminded about himself yesterday. It would seem that the stimulus package in the US has been agreed and voted on. All that remains is Trump's signature and $ 900 billion will practically knock on the doors of the US economy. But Trump unexpectedly said that this stimulus package is “a disgrace” and refused to sign it. In general, there is nothing much to be happy about today, which means we continue to sell European and American stock markets, oil and other Teslas with cryptocurrencies.
Short
by Trade24Fx
Merry Crisis and a Happy New Fear Yesterday was marked by a radical change in market sentiments. Greed was replaced by fear again (at least for some time). The VIX index added more than 30% (!), the US Treasuries yield during the day decreased by more than 5%, the CNN Fear and Greed Index lost almost a dozen points. The reason for this was the information that the mutated strain of coronavirus not only led to a sharp increase in COVID daily cases in the UK from 15K-20K to 30-35K per day, but also wants to break out from the island. As a result, many countries of the world are panicky closing flights to the UK. Europe is seriously thinking about a complete transport blockade. In general, the greed associated with vaccines has been replaced by a full-fledged fear associated with the unknown of a new strain of virus. What does this change in sentiments mean for prices in financial markets? In general, a massive exodus from risky assets and an increase in demand for safe-haven assets. So, there is nothing surprising in the fact that yesterday the stock and commodity markets were simultaneously decreasing as well as the prices in the cryptocurrency market. The growth of the dollar in the foreign exchange market also fits into this logic, since it serves as a safe-haven asset. Recall that the most vulnerable in this situation are the most "hype" assets like Bitcoin or Tesla. For Tesla, by the way, yesterday was the first day of trading as a full participant in the SP500 index with a weight of 1.69% in the index (the fifth largest) and, frankly, it ended not well (-6.5%). The decline in oil yesterday reached 5%, which again fully fit into the overall picture of what is happening. The main question of today is whether we should expect a continuation of yesterday, or this is all? The answer to it depends on many still unknown factors: the development of the pandemic situation, the efficiency of the existing vaccines for the new strain, as well as the mood of financial market participants. And do not forget that Christmas is close, which means that the “thin” market with a permanent threat of the start of profit-taking will in any case continue to remain a threat to buyers of risky assets.
NASDAQ:TSLAShort
by Trade24Fx
2
Week in a Glance: Moderna, Bitcoin, US Stimulus and Brexit The agenda on financial markets last week did not change much: they continued to monitor long-term projects (Brexit and US stimulus), rejoiced at new vaccines (this time from Moderna), watched the continuation of Bitcoin's movement into outer space, as well as ultra-soft monetary policies of the leading central banks (FED, Bank of England and Bank of Japan) and new pandemic records. There were no radical changes in market sentiments last week: the level of fear (VIX index) continued to remain at the lowest levels since the start of the pandemic. This means that the demand for risky assets prevailed in financial markets: stock markets and commodity markets demonstrated growth, but the greatest activity was recorded in the cryptocurrency market. In a couple of days, Bitcoin added about 20% to its price and updated historical highs. However, the higher you climb, the more painful you will fall. The last two Bitcoin bubbles bursts, with over 80% loss in value, began in December. So, do not be surprised if something unimaginable happens on the cryptocurrency market already this week. Oil grew last week. It was not stopped even by the rather gloomy prospects for the oil demand from both OPEC and EIA, which simultaneously worsened their own forecasts in their monthly outlooks. Again, if we believe that the likelihood of fixing profits at the end of the year is high, then this week oil, like the stock and crypto markets, may undergo massive sales. Or maybe not. The fact is that news about vaccines is consistently setting the market in a positive way. Another vaccine was approved in the US last week. This time from Moderna. That is, by the end of the month, 10-20 million people can be vaccinated in the United States. In addition, the markets were looking for a positive and found in the news about the stimulus package for the United States. On Sunday, Democrats and Republicans managed to reach an agreement, and today vote for a package of $ 900 billion is due. All week the attention of traders in the foreign exchange market was riveted on the news from the negotiation process between the UK and the EU. On Sunday there was a deadline, after which MEPs will no longer vote anything until 2021. Despite the statements about a breakthrough in the key issue of fishing, the parties do not have a deal yet and plan to continue negotiations today. The pound opened with a gap down today as a new type of the coronavirus was discovered in the UK. According to preliminary data, it is 70% more infectious. In Europe, countries are starting to restrict air traffic and are thinking about other measures to isolate them from the UK. The coming week will be half-holiday. Accordingly, there will be few fundamental events. But the combination of overbought and thin market at the end of the year is a highly explosive mixture. If ever there is a flash crash, it's this week. So, we are preparing for the most powerful corrective movements this week.
Short
by Trade24Fx
2
Bitcoin and Tesla, Pandemic and Macron, Moderna and BoEThe main event of the day yesterday is Bitcoin's super growth. In two days, the cryptocurrency gained 20%. We will not talk again about bubble in the cryptocurrency market - this is too obvious. We only note that the last two bubbles started to collapse in December 2013 and 2017, respectively. This does not mean that history will repeat itself this time, but December is the best fit for fixing profits. And profit fixation is perfect for the role of a needle, which will provoke a bubble deflation. By the way, both of the last bubbles ended with a loss of over 80% of the price. Bitcoin showed historical highs against the backdrop of new pandemic records. The maximum number of new cases in the world, the United States and Germany. The maximum number of deaths in the United States, etc. Even French President Macron caught the coronavirus. As a result, the European leaders are self-isolating. Another cause for concern was information about another allergic reaction to the Pfizer vaccine this time in the United States, as well as the loss of a large shipment of vaccines due to improper storage. But markets were more interested in the FDA's decision on the Moderna vaccine. As expected, approval was received. So, from next week in the United States will be vaccinated with two vaccines. In addition, the focus continued to be on the fate of US stimulus. As usual, a lot of talks on progress, but no deal on the table. From other news, we note that the Bank of England left the parameters of monetary policy unchanged. The data on the initial jobless claims in the US were again worse than forecasted and showed growth, recalling the consequences of lockdowns. Today, after the market closes, Tesla will be included in the SP500 index. We continue to consider this a stupid move from the index committee, which will cause problems to the index when the Tesla bubble collapses. By the way, over the past 31 years, when a large company was included in the SP500 index, its shares were declining by 7% over the next year. And the shares of the company, which at the same time was excluded from the index, grew by an average of 20%. So, lets sell Tesla and buy Apartment Investment and Management!
NASDAQ:TSLAShort
by Trade24Fx
6
About market optimism and why it is still prematureFinancial markets were full with optimism yesterday. Bitcoin surpassed the 20K mark, European indices (in particular, the German DAX) reached their highest levels since February 2020, US stock indices stormed historic highs, and oil reached the highest marks since March 2020. What made the participants of the financial markets so happy? To start with, general optimism has been a topic that has dominated the financial markets since late spring. So, in general, nothing fundamentally new has happened. In addition, the Moderna vaccine must be approved in the United States today, which continues to promise a bright future for the world as a whole. The data on business activity in the Eurozone, the UK and the US for December were far from disappointing. All this was superimposed by comments from EU officials about a progress in negotiations with the UK. In addition, following the meeting of the Federal Reserve Open Market Committee, the US Central Bank upgraded its forecasts for the growth rate of the US economy in 2020 (strange, but true). The FED now expects the economy to contract 2.4% in 2020, compared with a previous forecast of a 3.7% contraction. In 2021, the Fed expects the economy to grow 4.2% and 3.2% in 2022, up from previous estimates of 4% and 3%, respectively. The rates were left unchanged, but made it clear that their ultra-low values are for a long time (at least until 2023). As you can see, in general, there were enough reasons for optimism. On the other hand, there are many reasons for concern. US retail sales data reminded that the pandemic and lockdowns have a very concrete price to pay: US retail sales fell 1.1% in November, the first significant decline since April. Pandemic in the United States, despite the start of vaccination, does not think to subside - yesterday almost 250K new cases were detected and a new record should be expected by the end of today. In the world as a whole, the situation is even worse. The question of stimulus in the US is still open, and with Brexit situation is still not clear, as UK officials said key disagreements still exist. So, everything is far from so simple. Yesterday data from the EIA showed a decline in US oil stocks by 3.13 million barrels, which, however, was slightly less than analysts' expectations and in any case pales against the background of an increase in stocks by 15 million barrels last week. Today promises to be no easier than yesterday. In addition to the already mentioned possible approval of a vaccine from Moderna, the markets are awaiting a decision from the Bank of England on the parameters of monetary policy in the UK, data on jobless claims in the US will be published, as well as statistics on the housing market in the US.
FOREXCOM:NAS100Short
by Trade24Fx
Lockdowns, EIA Forecasts, Fed and Retail Sales AheadNews about vaccines gives positive sentiments, but they are clearly ahead of current reality. Here and now the list of knockdowns is expanding. Following Germany (the fourth economy in the world) and California (the fifth economy in the world), London is introducing a hard lockdown this week, next in line are New York, Italy and the Netherlands. Against this backdrop, it was logical that OPEC and EIA downgraded forecasts for oil demand growth rates. In particular, the EIA lowered its own demand forecast for 2021 by 170 thousand bpd. At the same time, the Agency noted that oil production increased in November and will continue to grow in December, because from January 1, OPEC + will increase oil production by 0.5 million bbl / d. Countries that are not members of OPEC + will continue to increase production. But the markets continue to ignore this, as well as the fact that according to API data, US oil stocks have been growing for the fifth week in a row. As a result, the price for oil increased yesterday. The reason is, in general, the same - expectations of a fast economic recovery amid victory over the pandemic (there is neither the first nor the second, and will not be in the foreseeable future). Yesterday was an interesting topic for US stimulus. U.S. congressional leaders reported substantial progress on Tuesday after two meetings of top Democrats and Republicans. Today promises to be extremely busy day both in terms of macroeconomic statistics and other news including FOMC meeting results. The top news in the field of statistics will be data on retail sales in the United States. Considering that the data are for November, rather weak figures can be expected. As for the Fed, the updated forecasts for the US economy from the Central Bank are of the greatest interest, since the parameters of monetary policy are likely to remain unchanged.
TVC:USOILShort
by Trade24Fx
2
Biden - President, Brexit hopes and oil issuesYesterday, the US electors, following the tradition of more than two hundred years, drew a line under the US Presidential elections. Biden is the President. But the winner will be officially announced on January 6, when Congress counts the electoral college votes. Markets now have no time for traditions and formalities. In the US, everyone is more concerned about the fate of the economic stimulus package simply because in a couple of weeks about 12 million receiving unemployment benefits are at risk of being left without additional financial support. The pound showed increased volatility as usual yesterday. Its growth yesterday is based on the hopes that an additional round of negotiations will finish with success. However, even if it is succeeded, you should not rejoice. London is on the verge of a complete lockdown, and the UK economy is at risk of being the main loser in 2020. Everything looks rosy enough for oil, which continues to grow steadily. And it doesn't matter that last week 2 out of 5 largest economies in the world decided to radically tighten restrictive measures with all the consequences. It doesn't matter that in a couple of weeks OPEC + will release an additional 0.5 million bbl / d to the oil market. It doesn't matter that Libya has increased production 10 times, and the United States has added an average of 0.5 million bbl / d over last two weeks, while China has sharply reduced oil imports. Nevertheless, all this exists and it will not be possible to ignore all these factors indefinitely. So, our position on oil is unchanged - we sell from the current ones. Moreover, just yesterday, OPEC published its monthly report, in which it lowered its forecasts of global fuel consumption in the first quarter of 2021 by 1 million barrels per day.
TVC:USOILShort
by Trade24Fx
2
Week in a Glance: pandemic and Pfizer, ECB, Brexit and stimulusFundamentally, the latest week can hardly be called calm and easy. New pandemic records in the USA and the world, the start of vaccination in the UK, the approval of the Pfizer vaccine for emergency use in the USA, Brexit, the results of the ECB meeting and the EU summit, stimulus in Japan and the USA - this is not a complete list of everything that happened. Last week, the pandemic showed new records in the number of new: worldwide it exceeded 700K, and in the United States - approached to 250K. And there is no feeling that the trend will be broken in the foreseeable future. The New Year holidays are already close, and they will almost inevitably lead to an outbreak of a pandemic. As a result, the “stay at home” order came into force in California, that is, bars, museums, cinemas, etc. will be closed, travel is prohibited and in generally citizens should stay at home. California is the 5th largest economy in the world (!). Plus on weekned Germany decided to start a tough lockdown. It should be noted that the light at the end of the tunnel is getting closer. Great Britain at the start of last week began vaccination. The use of the Pfizer vaccine in a number of cases provoked an allergic reaction, which somewhat narrowed the range of its use. Despite this, at the end of the week the Pfizer vaccine was approved for emergency use in the United States. The main source of news buzz last week was the UK and the EU, namely their negotiations on a trade agreement. Johnson's dinner with Ursula von Layden on Wednesday didn't help. And the parties went all-in, stating that, apparently, there would be no deal. The ECB, as expected, left the rate unchanged, but at the same time expanded the quantitative easing program: PEPP was increased by 500 billion euros and extended until the end of March 2022. And the EU summit adopted a historic budget of 2.2 trillion dollars and a stimulus package of 750 billion euros. A stimulus package worth $ 708 billion was adopted in Japan. It was only in the United States where the Democrats failed to come to an agreement with the Republicans about the adoption of a relatively small stimulus package (relative to the wishes of the Democrats) of 900+ billion dollars. The coming week promises to be no less eventful. Meetings of the FED, as well as the Central Banks of England and Japan, the final chord of the Brexit epic, stimulus in the US, approval of the Modern vaccine. And we have not yet talked about the mass of macroeconomic statistics that will be published this week.
XETR:DAXShort
by Trade24Fx
2
Vaccine Approved, ECB and EU injections, jobless claimsYesterday again was quite eventful day. UK reported GDP and industrial production for October. On the whole, the data came out rather good and, in some indicators, even better than forecasts. But there were few people willing to buy the pound after the Brexit situation continued to hang in the air. Plus Johnson threatened markets with no-deal scenario. The ECB, as expected, left the rate unchanged, but at the same time expanded the quantitative easing program: PEPP was increased by 500 billion euros and extended until the end of March 2022. So, it is not surprising that the euro was doing relatively well. The same cannot be said about the dollar. The data on jobless claims came out much worse than expected and soared to the values of a month and a half ago, recalling that lockdowns have quite a material price for the economy. Oil prices rose rather unexpectedly yesterday. Unexpectedly, because after the growth of oil stocks in the United States by 15 million barrels, it would be logical to go down, not up. Partially this growth can be explained with the attack on an Iraqi oilfield. But the damage was so insignificant that this barely can be called a game-changer. S&P Dow Jones Indices said Thursday it will remove a total of 21 Chinese companies from its stock and bond indices. The epic continues with stimulus in the USA. Treasury Secretary Steven Mnuchin said Republicans and Democrats have made significant progress. But there is no final decision yet and negotiations will continue today. Europeans, in turn, reached a landmark budget agreement Thursday after weeks of fraught negotiations, unblocking $2.2 trillion in funds. The agreement paves the way for the EU to put into effect a 750 billion-euro ($909 billion) pandemic relief package that will be financed by joint debt. The main reason for the growth of optimism yesterday was the FDA's decision to approve the Pfizer vaccine for use in the United States. So next week, mass vaccination will begin in the United States.
TVC:USOILShort
by Trade24Fx
4
Johnson's Dinner, China Deflation, ECB and OilYesterday was rich in all sorts of events. The Bank of Canada decided to leave the monetary policy parameters unchanged (as expected). Boris Johnson flew to Brussels for dinner with the head of the European Commission in a last-ditch attempt to break the Brexit impasse. Dinner ended without agreement. But negotiations will continue. The current deadline is Sunday. According to the negotiators, it is at this time that the final decision should be made whether a deal can be reached or not. Meanwhile, Honda was forced to suspend production at a large plant in England due to delayed parts supplies. That is, the British industry is at risk of disruptions since January. Without a deal, British automakers could lose $ 62.4 billion over the next five years. Pandemic fronts were traditionally ambiguous. On the one hand, the pandemic does not even think about fading away, and in the United States, the medical system is on the verge of collapse. But on the other hand, the FDA is due to approve the Pfizer vaccine today, and China has reported 86% effectiveness of their vaccine. But even the vaccine news background was clouded yesterday by information that UK health regulators warned that allergy sufferers should not take the vaccine developed by Pfizer and BioNTech after two UK health workers showed an allergic reaction to the drug after being vaccinated in the beginning of the week. And more news from China. The Celestial Empire reported a sharp drop in inflation (at the end of November consumer prices declined by 0.5%). Given that the markets are expecting the Central Bank of China to roll back stimulus, the news was somewhat puzzling. But when an explanation was found in the form of a sharp decline in pork prices, everyone calmed down a little and decided that deflation was a temporary phenomenon and is not a sign of systemic problems in the Chinese economy. The oil market received mild shock therapy yesterday. Oil reserves in the United States, according to official data, increased by 15.19 million barrels. Once again, more than 15 million barrels (!). Despite the fact that analysts had expected a decline of 1.42 million barrels. The difference is definitely shocking and reminds of the fact that in conditions of lockdowns, the demand for oil tends to decline. In our opinion, yesterday's drop in oil prices is just the beginning. Today promises to be extremely busy - the ECB meeting, statistics on GDP and industrial production in the UK, consumer inflation and jobless claims in the US, the FDA approval of the Pfizer vaccine we already mentioned above, as well as news from the Brexit and US stimulus fields.
TVC:USOILShort
by Trade24Fx
Musk follows Burry's advice at the peak of the global bubble The fact of the day is $ 100 trillion. This is the capitalization of the world stock market. Is that a lot? If we use the world GDP as a comparison base, then a lot. The last time the capitalization of the global stock market exceeded global GDP was on the eve of the 2007-2009 crisis, which nearly buried the entire global financial system. Last week we wrote about Burry's advice for the "good guy" Elon Musk to sell Tesla shares while they are still being bought at current "ridiculous" prices. You will laugh, but yesterday Tesla announced its intention to sell its shares for $ 5 billion. We just wondering what else needs to happen for Tesla fans to finally face the facts. Britain, meanwhile, is ahead of the rest. This time on the issue of vaccination, which officially started yesterday. We will remind, the United States must give permission for the vaccine against Pfizer on Thursday and in theory will join the UK at the start of next week. The oil market, meanwhile, is no fun. We wrote yesterday that China's exports literally skyrocketed by 21%. But imports grew by a very modest 4.5%. To a large extent, such a weak result is due to a sharp drop in imports of energy resources. This, in turn, is due to the fact that at the beginning of the summer, China has filled its storage facilities with cheap oil and now uses this oil, saving up to $ 20 per barrel.
NASDAQ:TSLAShort
by Trade24Fx
4
Brexit, China exports, European data and CaliforniaFrom the point of the price dynamics in financial markets, Monday was remembered primarily by the pound moves. Paired with the US dollar, the decline reached 200 points. The reason is obvious - Brexit. Markets expected that over the weekend the last contradictions would be resolved and the parties would begin to sign a trade agreement. Instead, the UK and the EU have confirmed their differences. Nothing new, but the problem is that the EU leaders' summit on Thursday will be the last real chance to sign and ratify the agreement before the end of the year. This means that the situation is heating up to the limit. Meanwhile, China reported a sharp increase in exports (21%) in November and once again gave the markets a reason for optimistic thoughts about the future. Although, according to high-frequency data from Bloomberg, the situation in economies where full or partial lockdowns are currently in effect is rapidly deteriorating. Not surprisingly, California (the world's fifth largest economy by GDP) announced a stay-at-home order over the weekend. That is, bars, hairdressing salons, museums, cinemas, etc. will be closed. Retailers are allowed to remain open with a 20% load. Travel is prohibited. The order will be valid for at least three weeks. But the markets continue to think positively. The issue of stimulus in the US is moving towards a happy ending. And in Japan happy end has already been reached. Japan on Tuesday announced a new $ 708 billion economic stimulus package to accelerate the country's recovery from its deep recession caused by the coronavirus. In addition, this Thursday, the FDA will review the Emergency Use Authorization (EUA) for the Pfizer coronavirus vaccine candidate. Moderna vaccine candidate is scheduled on December 17.
Long
by Trade24Fx
Week in a Glance: OPEC +, NFP, Pandemic and stimulusThe past week turned out to be quite intense in fundamental terms. At the same time, the general trends and sentiments in the financial markets have not changed: the level of greed continues to go off scale, as generates excessive the demand for risky assets. The main event of the week, perhaps, can be considered the OPEC + meeting. Despite the preliminary negotiations, on Monday the OPEC + participants were not ready for constructive actions and the meeting was postponed until Thursday. The results are as follows: from January production will increase by 0.5 million b / d. Further actions will be agreed monthly. Is this a victory for the bulls? Well, the very fact that oil production will increase somehow does not look like a triumph of buyers. Let us also remind that the markets were expecting a decision to extend the current volume of production cuts by 3-6 months. And while things could have been worse (with a 1.9mn b / d increase in production since January 1), we think the OPEC + results is an excellent reason for oil sales. Another important event of the week was the publication of official statistics on the US labor market. Figures from ADP on Wednesday warned that NFP may well be worse than expected. And so it happened: the data turned out to be 2 times worse than forecasted and once again reminded that the pandemic has a completely material economic price. In this regard, we note that the past week again turned out to be a record one in terms of the number of new cases in the world and in the United States, in particular. Around the world, the numbers were close to 700K per day, and in the US - to 240K. Still markets have not been confused with these figures and, in general, sentiments have not changed so far. However, we believe that the markets have deviated too much from the normal, which means that a correction is just around the corner. So, we will continue to sell in the stock markets. At the same time, we do not exclude that this week the optimistic mood stays unchanged. In the US, there seems to be some progress on stimulus issue. And although the sum announced is 2 times less than the previous minimum figure for the Democrats, even $900 billion may be enough to keep the demand for risky assets going off scale. Plus news from vaccine manufacturers can help maintain the proper degree of optimism. After all, it is this week that the US FDA is due to approve the Pfizer vaccine.
TVC:USOILShort
by Trade24Fx
2
OPEC+ results, Burry vs Musk, NFP aheadThe long-suffering OPEC + meeting finally finished yesterday. As a reminder, according to the plan, it was supposed to end on Tuesday with a decision to extend the current volume of production cuts by 3-6 months. But in fact, after the failure of the first day, it was postponed to Thursday. The results are as follows: from January, production will increase by 0.5 mln b / d. Further actions will be agreed monthly. That is, the decision whether to increase production in February by another 0.5 million will be made at the OPEC + meeting in January. Despite some growth in oil, we consider the results of the OPEC + meeting at least inconsistent with the basic expectations of the markets, which means that sales are more than relevant. Among other events of the day yesterday, it is worth noting unexpectedly good figures for jobless claims in the USA. That is, they are still several times higher than the pre-pandemic levels, but the very fact of a certain positive trend in the current environment is surprising. Especially on the eve of the publication of official statistics on the US labor market today. Yesterday's data on PMI indices in the services sector in Europe confirmed the thesis, which we announced earlier this week: factories and plants this time were not closed, respectively, the manufacturing component suffered a little. But the service sector absorbed most damage from the restrictions (Spain, Italy, France, Germany, the Eurozone as a whole - all indices are below 50 or even 40). So the US labor market may well surprise and surprise unpleasantly. Yesterday we wrote about Musk's letter of despair. And the reaction of the financial markets predators has come. Michael Burry, best known for the Big Short, as the man who invented credit default swaps tweeted that he had become a seller in Tesla shares and advised Musk to issue additional shares while prices are so ridiculous, because then it might be too late.
TVC:USOILShort
by Trade24Fx
6
Vaccination in the UK, weak ADPs and wise Musk's fearThe main news yesterday were traditionally related to the pandemic and vaccines. And no less traditionally they were rather ambiguous. On the one hand, the UK is the first in the world to approve the Pfizer-BioNTech COVID-19 vaccine. Vaccinations will begin next week after the country receives 800,000 doses from Pfizer's manufacturing center in Belgium. The country has ordered enough doses of the vaccine to immunize 20 million of its 67 million population. As a reminder, the US FDA is due to meet on December 10 to discuss whether to recommend an emergency authorization for the Pfizer / BioNTech vaccine, and the European Medicines Agency said it could grant an emergency vaccine approval by December 29. Currently, 22.5 million doses of Pfizer vaccine and 18 million doses of Moderna vaccine will be produced in December 2020. But this pot of honey was not without tar. The pandemic in the world does not even think to fade away. More than 200K new cases of infection were recorded in the United States yesterday, the number of hospitalizations is breaking records and the medical system is on the verge of collapse. Yesterday's ADP data came out much worse than forecasted (307K against the forecasted 410K) and confirmed fears that the US economic recovery has slowed sharply after a new outbreak of the pandemic. Considering that the main US labor market data will be published tomorrow, the reason for pessimism is more than serious. It is highly likely that today's jobless claims data will confirm these concerns. From local news, it is worth noting Musk's half-panic letter to his employees, in which he warned that Tesla shares would be instantly crushed, like a soufflé under a sledgehammer, if they did not find ways to reduce costs. Essentially, Musk affirmed that Tesla's profitability was and remains an illusion that requires more and more efforts to maintain over time. Why is Musk panicking right now? If you look at what happens to Nikola shares (they lost about 50% in the last week) or Nio (in just three days, the scale of losses reached 30%), it becomes clear why it is now, because Tesla, by and large, is next in line.
NYSE:NIOShort
by Trade24Fx
2
OPEC + failure, OECD forecasts and ADP data aheadSo far, the main event of the week is the current failure of the OPEC + meeting. Instead of the expected decision to extend the current voluntary production cuts in the oil market for another 3-6 months, we have confusion. So far it has not been possible to agree on anything. The UAE insists on a fairly simple thought: what is the point of talking about some terms of the deal if the deal is still not respected. And it is clearly not easy to object to this reasonable question in the framework of OPEC +. But hope dies last and the solution to the problem has been postponed until Thursday. Otherwise, the world continued to live on dreams of vaccines, imagining how soon everything will return to normal. We have already noted that reality will at best begin to match current expectations in the third quarter of 2021. Because here and now, over half a million people in the world are infected every day, and most of Europe is shrouded in a network of full or partial lockdowns. All this cannot but harm the economy. As a result, yesterday the OECD updated its own forecasts for the pace of economic development in the world and noted that the resumption of the coronavirus pandemic has dramatically weakened the global economic recovery. Downgraded global growth forecast for 2021 to 4.2% from 5% in September. And according to the S&P Global, the shock due to the coronavirus will more than double the default rate of companies in the US and Europe over the next 9 months (for example, in Europe, the default rate will rise from 3.8% to 8.5%). But who is interested in the opinion of some OECD or S&P Global? It is much more interesting to show historical highs in the stock market or in cryptocurrencies. Nevertheless, we continue to live in a paradigm where objective reality is no less important than subjective perception, and therefore today we will monitor US employment data from ADP. Recall that the main block of statistics on the US labor market will be published on Friday. It is unlikely, but still it can remind dreamers of what the economy is in fact here and now.
TVC:USOILShort
by Trade24Fx
1
Moderna, BitCoin records, China, OPEC and IndiaFollowing Pfizer, another pharmaceutical company (Moderna) is filing for US vaccine registration. At the same time, the company noted that its vaccine is 100% effective in severe disease. United Airlines, meanwhile, transported the first shipment of Pfizer's Covid-19 vaccine from Brussels to Chicago O'Hare International Airport. Against the background of this information, buyers of cryptocurrencies and Bitcoin in particular experienced another heightened optimism. This resulted in new all-time highs for Bitcoin. Despite the apparent madness of what is happening in general, it fits into the general outline of the behavior of financial markets in recent times. China, as usual, added some optimism to the markets yesterday, when reported an increase in manufacturing activity in November, which became the ninth month of growth in a row. We are talking about the purchasing managers index in the manufacturing sector (PMI) for November (52.1 against the forecast of 51.5). India tried to return the optimists to the ground. Its economy at the end of the third quarter (GDP decreased by 7.5%) confidently entered the stage of a technical recession. On Monday, the UK and the European Union warned each other that time is running out for a Brexit trade deal. The funniest (or saddest) thing is that one of the key stumbling blocks - fishing - provided only 0.03% of the British economy in 2019. That is, Britain may fail the deal with the price of a trillion in trade turnover because of 0.03% of GDP. Since this is beyond common sense, we continue to believe that the sides will reach an agreement, which means that the pound will receive its injection of positive and a reason for growth, albeit short-term. The OPEC meeting was unsuccessful yesterday and should continue today. Although some reports have postponed the talks until Thursday, as key players continue to disagree on how much oil they should pump amid weak demand due to the coronavirus pandemic. Sources said that Russia has offered OPEC + to start increasing production by 0.5 million barrels per day every month since January. Obviously, against the background of such information, oil can only be sold.
TVC:USOILShort
by Trade24Fx