More recently, in most cases, news has influenced investor behaviour. Now it seems that the news itself adapts to the fall or rise of key indices.
In fact, everything happens precisely because there is no specifics and it is not clear what is currently affecting the fall or rise in quotations. Even the US Federal Reserve itself does not know how the situation will develop. Because of this, the news is trying to adjust to the current market.
Autumn is coming, it’s getting colder, and the coronavirus will still be at the top of the news feeds. Governments will probably act a little differently now, because total quarantine is hitting the economy very hard. It is not yet very clear how they will save the economy.
On Friday, signals for recovery appeared on the American stock market. The S&P500 index rose 1.6% to 3298 and the DAX index fell 1.09% to 12469.
Further development of the situation will depend on many factors. First and foremost, companies in the USA are waiting for financial support from the government, which they have been unable to agree on for more than a week. In Europe, the situation is very bad with COVID-19, which is not allowing the economy to recover quietly.
The Federal Reserve has published data on its balance sheet. Over the past week it has increased by 28 billion dollars to 7.09 trillion dollars. This is the maximum value for the last three months. The growth in the Federal Reserve’s balance sheet will only contribute to the weakening of the US dollar. There are all the prerequisites that the euro will be adjusted to 1.17, which is a very important target at the moment.
Libya is increasingly beginning to surprise oil exporters. At a time when OPEC is going to reduce production and introduce new quotas, Libya is opening its ports to oil tankers in full swing. By the end of the year, exports could reach around half a million barrels per day. The price of oil remains under pressure. Following Libya, Iran and Venezuela could boost production, which would have an even greater impact on the market. So far, WTI oil has managed to keep at $40 per barrel, but it seems to be a matter of time.
What awaits us today?
07.00 Index of leading indicators in Japan for July
15.45 Statement by ECB Chairman C. Lagarde
16.30 Manufacturing Index from Dallas FRS in the USA for September
Important Notes on This Publication:
The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.