Category

News

Morning Stock News

Collapse of the US dollar

By | News | No Comments

Gold   1856,61
(+0,82%)

EURUSD   1,1541
( +0,09%)

DJIA  26748,50
(+0,08%)

OIL.WTI  41,55
(+0,02%)

DAX   13095,27
(+0,01%)

On Tuesday, something happened that should have happened sooner or later. The dollar collapsed again to all kinds of assets: stocks, currencies, commodities. The peculiarity of Tuesday is that some of the assets made new highs, which had not happened for a long time.


EUR/USD

EURUSD

For example, the pair EUR/USD broke the most important level at 1.15 and rose to the values we saw 1.5 years ago. The growth of the European currency was further promoted by the adoption of the EU budget. European leaders, after long negotiations, agreed on it at the level of about 1 trillion dollars for 7 years. This is a powerful positive for the EURO. It shows that, despite all the disagreements, European countries have managed to tackle the main challenges together.


S&P 500

An important outcome of the day was the consolidation of the S&P 500 index above the opening of this year. While the situation, compared to the beginning of the year, looks simply terrible. In one of the upcoming mailings we will compare in more detail what is happening in the world economy now. And what happened on January 1, 2020. Crazy growth in stock markets only confirms the flight of investors from the U.S. dollar. More and more economists say that the Fed has printed much more money than the American economy can digest.


Bitcoin

Only one asset class reacted sluggishly to Tuesday’s events. We’re talking about cryptocurrencies. Although bitcoin came out of the consolidation of recent days, the movement was weak. There is no certainty that the price will not fall back to the levels of $9100-9200. Why is the first cryptocurrency refusing to rise? It seems to us that the situation will not change until the psychologically important $10,000 level is broken. Investors and speculators believe in this development less and less. And only confident fixation above this value will change the point of view of market participants.


What’s waiting for us today?

14:30 Basic Consumer Price Index in Canada for June
16:00 U.S. secondary housing market sales for June
17:00 Address by ECB Vice President de Gindos.


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.

Stock broker

Countdown to the Red November

By | News | No Comments

21.07.2020 – Special Report. Deadline Sunday, 26 July: 100 days to go until the election of the US President. Apparently, the Democrat Joe Biden with his announced new socialist policy is uncatchable ahead. The bears are already celebrating. But maybe the surveyors simply haven’t learned anything new and Donald Trump manages the triumph – and then a completely different red wave rolls over the USA. Remember: The color of the Republicans is red. We will shed light on the background and the consequences for Wall Street.

United Socialist States of America

In the best survey collection available, that of RealClearPolitics.com, Biden is in the lead with a good 8 percentage points. Amazing, because the challenger has recently adopted some extreme left-wing positions: immediate tax increases for companies, phasing out fossil fuels, using taxpayers’ money for abortions, and of course free health care for illegal migrants. He also promised to stop the deportation of illegal criminals during the first 100 days of his term of office. Which is why star author Joel B. Pollak also hints at the possibility of revolution in his new book “Red November”. He believes: Either the Democrats ruin themselves or they build the new United Socialist States of America. Not good for the stock market.

Goldman customers get nervous

Goldman Sachs suspects that after a Biden victory, corporate taxes would rise from 21 to 28 percent. Trump had cut the rate from 35 to 21 percent. This would be in addition to other Biden taxes and a dent in the gross domestic product. The investment bank’s clients were already quite nervous – a Dems victory would take 20 dollars off the earnings per share in the S&P 500, and then 150 dollars. The Gold Men said that it would depend on how the market assessed other factors – the US could adopt a less aggressive trade policy again and join international organisations.

VIX-Call in November

Goldman also expects considerable uncertainty after the election due to an extended counting in the course of the increased postal vote in Corona times – after all, new elections in Congress are also pending. We add: The postal vote is vulnerable to fraud. In any case, Goldman sees some volatility in the weeks after the election and advises against the December future in the fear indicator VIX (cut-off date: 18 December).

BlackRock is skeptical

Reuters recently stated that the number of bets against the US currency on the futures markets is higher than it has been for two years. Laffer Tengler Investments, for example, liquidated its dollar positions, as a victory for Biden would lead to slower growth and pressure on the US currency. The BlackRock Investment Institute lowered its ratings for U.S. equities on concerns about weakening fiscal stimulus and election uncertainty, according to Reuters. “The two parties are as far apart in their policies as ever, so the outcome will affect the markets,” BlackRock analysts concluded.

UBS and Helaba bearish on energy and financial stocks

A possible new regulation by a democratic government could also create a headwind for energy and financial stocks, UBS Global Wealth Management continued. “Biden would probably join the current international mainstream in terms of increased efforts to avoid greenhouse gases,” Helaba said.

Morgan Stanley neutral

Only Morgan Stanley ruled that it didn’t matter who won the election. In this way a tax increase would be balanced by a higher minimum wage and better health care. Foreign policy will also be less confrontational. There is also the issue of government spending: “investors may be too focused on the tax side of the equation, overlooking the support for aggregate economic demand from fiscal expansion”.

China-Appeasement ahead

Presumably, Washington under Biden would again turn to a more China-friendly policy, including the elimination of customs duties. All US stocks affected by this dumping would be allowed to go down. And China stock would probably go up. Even in Barack Obama’s administration under Vice President Biden, the People’s Republic was allowed to export cheap goods to the US undisturbed, and the US steel and textile industries suffered as a result. In return, son Hunter Biden, with the support of the Bank of China, was allowed to float Chinese shares on the stock exchange via the investment vehicle “Bohai Harvest RST (Shanghai) Equity Investment Fund Management” – a veritable license to print money.

Four options for the stock exchange

11) If Biden has a clear election victory and the Dems march through Congress, the stock market is likely to enter a long bear market.
2) An aggravated crash is likely to occur if Biden is pushed aside a few weeks after an election victory due to completely unexpected health problems and a vice president from the radical left wing takes over the presidency. The consequence of such a coup would be a red wave for stock market prices – then civil war would break out in America. By the way, the self-declared Socialist and Democratic Member of Parliament Alexandra Ocasio-Cortez has just called for taxes to be collected in future on book profits, i.e. not on realised profits – such a law would be a stopper for any investment!
3) If the situation remains tense for a long time because of disagreements in the absentee ballot and it is unclear for weeks who will win, then new unrest will probably flare up. Thus it becomes uncomfortable on the stock exchange. In this case an investment in the VIX would be the best option.
4) If Trump clearly wins, on the other hand, a new, strong bull market is likely to emerge – especially if the victory is accompanied by a Republican triumph in Congress.
The Bernstein-Bank keeps an eye on the matter for you and wishes you successful trades and investments!


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.

Morning Stock News

Can Gold fall to $1500?

By | News | No Comments

Gold   1819,67
(+0,13%)

EURUSD   1,1433
( -0,08%)

DJIA  26666
(+0,11%)

OIL.WTI  40,99
(+0,47%)

DAX   13083,35
(+0,01%)

On Monday, we saw another high in the gold market. By the end of the trading session the price had rolled back a bit. However, the closing price of the day also showed a 7-year high.


Gold

Gold

The yellow metal has only $100 left to pass, to the level shown in October-November 2011. Recall that the historical maximum is 1920 dollars per troy ounce.
We all understand the arguments why gold can rise to $2,000, and then $3,000. But let’s turn on the fantasy. Can gold go down dramatically? What kind of forces could push it to that? Is it possible to see the price of $1,500 again this year.
It seems fantastic. But nothing is impossible in the market. We can assume that several factors must coincide to move to the level of 1500$:
– The victory of doctors over the COVID-19 pandemic. Specifically, the creation of the vaccine
– John Biden will win the US presidential election.
– The inflation rate will rise sharply.
If all 3 points coincide, then: gold will no longer interest investors as a protective asset, international tensions will decrease, the central banks will have to raise interest rates.


S&P 500

The main US stock index rose to its highest level since February 2020. As we predicted last week, a large number of investors and speculators want to drive the price even higher. Investors hope that the huge infusion of money will lead to another year of growth in the stock market. And speculators want to make good money on shortstops.


Pound Sterling

The British pound suddenly grew strongly against the American dollar. However, both fundamentally and technically the picture is still bleak. From the fundamental point of view, the pound is pressed by the situation with the coronavirus. And from the technical point of view, the English currency, unlike the same EUR and Japanese Yen, is below the 200-day moving average.


What’s waiting for us today?

03:30 Minutes of the meeting of the Reserve Bank of Australia
14:30 Chicago FBI Business Activity Index June
17:10 Canadian retail sales for May


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.

Stock Trader

Constantly new crash warnings

By | News | No Comments

20.07.2020 – Special Report. The bulls can’t hear it anymore – but the warnings of a crash on the stock market are getting louder and louder. Especially the stellar performance of high-tech stocks makes the alarm sirens go off. One investor sees an “endgame”, others see the repetition of the dotcom bubble about 20 years ago or the financial crisis of 2008.

Nasdaq before the final phase

Clem Chambers made a particularly drastic statement on Forbes.com: “The Nasdaq is on its final run and is going vertical, a classic end of bubble move. This is trader heaven and turns into speculator hell for those who think that markets do grow to the skies.” Maybe the rally could last until Christmas or end tomorrow – if the Federeal Reserve doesn’t let the air out of the bubble, the final move could be fast. And then Chambers drew parallels with the dotcom crash of the 2000s: the government’s attempts to boost the economy meant that all the money was flowing straight into stocks. If the Nasdaq now takes off vertically, the final chapter of the process is initiated – and a destructive crash will destroy some of its assets. There is a danger that the current market will repeat the double blow of the 1930s.

Main Street versus Wall Street

Sven Henrich of NorthmanTrader.com also sounded the same note: “The gap between Main Street and Wall Street is widening. More than 50 million Americans are likely to become unemployed during the crisis. But the banks benefited from the government money. And the tech billionaires on the stock market witnessed their stocks continue to shoot up. Big tech, he said, had moved further away from the market than it had since the 2000 bubble.

Collective hallucination on the financial market

JPMorgan drew parallels with the 2009 crash, and in an interview with Bloomberg TV, Oksana Aronov, head of the Alternative Fixed Income Strategy department, said the Fed’s purchases had decoupled credit valuations from deteriorating fundamentals. European and American investors are trapped in a collective hallucination – market valuations are completely fabricated and synthetically created by central bank liquidity.
The manager warned of impending tax payments that could trigger a new crash. Even if there was a vaccine against Corona, she said, many small businesses would be without cash for months. Oksana’s conclusion: “Ultimately fundamentals will prevail”. The market is so overvalued that the Great Depression is just a walk in the park compared to the coming crash. Since the current financial system would then no longer exist, she advised investors to go for gold.

Huge valuation gap

Bank of America also made drastic statements with similar arguments. Chief Investment Officer Michael Hartnett wrote in his legendary “Flow Show” that never before has the gap between macro data and markets been greater – in other words, never before has the market been so fractured as it is now. This is mainly due to the global stimulus of 18.5 trillion dollars, and in particular the asset purchases by central banks amounting to 8.0 trillion dollars. And: “markets are up big because there was no Lehman”. So far, there have been no major bankruptcies, but the debt ratio compared to gross domestic product is much higher than in 2008.
Hartnett concluded: “the remarkable rally in credit and stocks may be closer to an end than a beginning” and “it is central banks, not bearish investors that end bubbles”. If the central bank issued the sell order for excessively rated bonds, this could lead to a final push for stocks before the collapse.

Warning from the Fed

And indeed, the Federal Reserve was implicitly sending out such a sell signal: “We may be seeing significant pricing disconnects between the market & economic fundamentals, which could result in sudden & sharp repricing,” said Federal Reserve Vice Chairman Randal Quarles. Before he joined the Fed, he was an investment banker at the Cynosure Group in Utah and The Carlyle Group in Washington, D.C.
We think: So maybe there will be a rude awakening soon. It’s striking that more and more professional investors are taking a warning. It looks like the attacks are getting closer. Traders and investors should not wipe these opinions lightly off the table. The Bernstein Bank wishes good luck!


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.

Morning Stock News

What are the threats to markets from the U.S. presidential election?

By | News | No Comments

Gold   1808,85
(+0,03%)

EURUSD   1,1441
( +0,12%)

DJIA  26397,50
(-0,61%)

OIL.WTI  40,45
(-0,66%)

DAX   12963,78
(+0,01%)

Everyone has long been tired of 2 topics: coronavirus and trade war between the United States and China. There is a new topic on the agenda, which will become more and more relevant every week. We’re talking about the U.S. presidential election in November 2020. And this is a very painful topic for the markets.


S&P500

S&P500

Why? According to recent polls, U.S. Democratic Party candidate Joe Biden is steadily ahead of Donald Trump. Critics may recall much of the current American president. But most people are annoyed by his failed policy towards the coronavirus epidemic.
What’s Donald Trump good at? He’s only effectively dealing with one problem – stock market growth. And both the supporters of the incumbent president and his opponents agree with that. It’s true that the U.S. hasn’t had an entrepreneurial politician in power for years. Who is not engaged in bureaucracy, but makes concrete and quick steps to improve the competitiveness of the American economy.
And that is a huge risk. If Donald Trump loses the election, there is no doubt that the topic of the stock market will move to the second, and maybe even to the third plan. Once again, endless investigations will begin into Russia’s interference in the 2016 election. There will be a debate about the fact that every American should have full medical insurance. The question of emigrants and the wall on the border with Mexico will be raised again, etc., etc.
What do markets do when attention is switched to something else? That’s right! They start to fall. So it’s worth putting this risk in the mid-term portfolio formation.


Japanese Yen

It’s been a long time since we’ve written about Japanese currency. Recently, it has been trading in a fairly narrow corridor. This means it does not arouse any interest among traders. At the same time, there are 2 points that are worth paying attention to.
1. Stock markets rose again very high after the spring fall. Even a small correction will be accompanied by a sharp decline of the dollar/yen pair. Moreover, the pair refuses to rise on the rise of stock markets (this is a very strong signal).
2. The American dollar itself keeps getting cheaper against all assets. At any moment, Japanese investors may decide that the dollar is too expensive against the Japanese yen.

And the end of the problem is that the chart has long been below the 200-day moving average. That is, in case of further decline of the pair, large hedge funds may join the game, which will put on the continuation of the trend.


What’s waiting for us today?

03:30 Decision of the People’s Bank of China on interest rate
08:00 Producer price index in Germany for June
17:10 Speech by a member of the Monetary Policy Committee of the Bank of England Haldane


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.

Morning Stock News

Social networks are enemies of the state?

By | News | No Comments

Gold   1798,545
(+0,10%)

EURUSD   1,1386
( +0,06%)

DJIA  26595,50
(+0,14%)

OIL.WTI  40,86
(+0,42%)

DAX   12904,74
(+0,01%)

What happened with the Twitter account hacking is like a joke. The scammers made about $150,000 and the public is angry about the bitcoin. Cryptocurrency is evil, because hackers got BTC on their account. So what’s the joke?


Gold

Gold

The joke is that by hacking into Twitter accounts of major politicians and businessmen, hackers can make hundreds of times more money. Like releasing information that Tesla’s company is declaring itself bankrupt. Including Ilon Mask’s account. A 10%-20% drop in Tesla shares (on news) could bring millions of dollars to option sellers.
But it’s nothing at all. Let’s imagine if these Twitter accounts were to speak out on some political topic. For example, that Hong Kong is separating itself from China. They’d be worth billions of dollars by now.
So making money is the last thing hackers were interested in. At least, there were two goals: to compromise Twitter and cryptos.


Indices

The stock markets responded to the situation above with a predicted decline. And then on the Euronews channel it was directly stated that the second wave of coronavirus came to Europe. The wave that was expected only in autumn, not in the middle of summer. What happens next?
One thing is very likely to happen. Even if very bad news continues to come out, the stock market will not collapse until the spring low. Investors saw what a big bounce was. And no one else will want to sell shares at lows to see them 10-20% higher in a month.


Gold

On Thursday, yellow metal quotes fell below $ 1800 again. On the chart above you can see an interesting candlestick formation. A new narrow corridor begins to form. It has 7 candlesticks so far. But nothing prevents this corridor, potentially, will last for another month. That’s what we’ve been seeing for the last year and a half. The gold stands in the corridor, followed by a leap upstairs and a new corridor.
The trend is getting stronger and stronger. There are practically no kickbacks over the previous highs. What do you think the analysts started talking about against this background? The discussion of the price of $3000 per troy ounce is yesterday’s day. Some analysts say that in the next 2 years gold will grow up to $4000 per troy ounce.


What’s waiting for us today?

10:30 Speech by ECB representatives
11:00 Eurozone Consumer Price Index June
14:30 Started house construction in the United States in June
16:00 US Michigan University Consumer Confidence Index July


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.

Morning Stock News

Are American banks doing okay?

By | News | No Comments

Gold   1809,715
(-0,02%)

EURUSD   1,1406
( -0,05%)

DJIA  26655,50
(-0,43%)

OIL.WTI  40,89
(-0,22%)

DAX   12915,99
(+0,01%)

Goldman Sachs’ net profit for the US economic pillar increased by 2.2% or $6.26 per share in the second quarter. Last year, the figure for the second quarter was $5.81 per share. How could this have happened?


S&P500

S&P 500

Analysts assumed that the bank’s profit would be 2 times less. Indeed, against the background of economic problems due to coronavirus, it was the most likely result. Because of mass bankruptcies of American borrowers.
However, this very mass bankruptcy did not happen. Huge support measures were provided to the business by the US government. Which means that U.S. companies were paying their debts properly. Moreover, due to the situation with the coronavirus, even those firms that could not pay debts earlier were paying off their debts.
The American stock market grew on this news at the beginning of the trading session. Investors are beginning to realize that the reporting of other banks can be much better than expected. The main American index is now in the area of its historical maximum. There are 2 more days till the end of the week and we can see a confident consolidation above this level.


Canadian Dollar

After an interest rate decision and a Bank of Canada press conference, the CAD rose sharply against all currencies. However, we did not hear anything new that could affect the rate. The economy is weak and interest rates will be low for a long time. And most sectors of the economy will be assisted.
So why did the Canadian dollar show such a strong movement? We believe that investors were laying down a stronger monetary easing scenario. And if it didn’t happen, then against the background of growing oil, the CAD is again becoming a promising commodity currency.


Swiss Franc

On Wednesday, the Swiss franc fell sharply. On the one hand, good news from the American banking sector contributed to this. On the other hand, there is a growing belief that this year we will see a coronavirus vaccine.
But there is also a reason why we have repeatedly drawn the attention of our subscribers. Pay attention to the chart of USD/CHF pair. The levels 0.93 and 0.94 have been the long-term support for 5 years. Yes, sometimes the price went down, but it bounced very quickly, passing up 3-5 figures. Therefore, the first expected target is 0.95 and the second is 0.97.


What’s waiting for us today?

03:30 Unemployment rate in Australia for June
04:00 Chinese GDP for 2nd quarter
08:00 UK unemployment rate for May
13:45 ECB interest rate decision
14:30 US retail sales for June


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.

Morning Stock News

Nobody else believes in the dollar?

By | News | No Comments

Gold   1806,24
(-0,15%)

EURUSD   1,1395
( -0,05%)

DJIA  26775
(+1,08%)

OIL.WTI  40,44
(+0,07%)

DAX   12772,75
(+0,01%)

Tuesday was the most interesting day in the Forex market. All data released in Europe was worse than forecasted. And in the U.S., consumer price data was higher than the analysts’ forecasts. In theory, the dollar should have strengthened. Instead, it fell sharply.


EUR/USD

EURUSD

The decline was also recorded in relation to all risk investments and commodity futures. If you follow the chart above closely, you can see that the EUR/USD pair is once again approaching a strong resistance zone. Over the past 2 years, a strong reversal has occurred several times at these levels. In addition, the price fell several points at once. But the more the same scenario is repeated, the stronger the exit from this scenario can be.


Pound Sterling

In England, very poor GDP figures are published for the second month in a row. Our spring forecasts are fully confirmed. After it turned out that the island offered no protection against COVID-19, the next problem was very acute. The same location on the island has led to an even greater production and logistics crisis than in the EU. All connections were interrupted. Most British people deeply regretted the choice made in the referendum.


Oil

Despite the news from South and North America, where the coronavirus situation is assuming a catastrophic scenario, the oil refuses to sink. It is already clear that the tourist season that has begun is in danger. Most tourists will not leave their country. And the resumption of a large number of scheduled flights is a dream.
Nevertheless, the oil is at the same level as 40 days ago, when it looked as if the corona virus had retreated with the arrival of the heat. Why is this happening? There can be only one answer. Production of the black gold has dropped sharply in recent months. This applies to the OPEC+ agreement. As well as countries like the USA, whose oil companies have reduced their production due to a sharp drop in demand.
Perhaps the oil industry has succeeded in finding a new balance between supply and demand. In which case, a long flute awaits us all summer long. And only then will everyone see whether the second wave of the coronavirus will reach the countries of Asia and Europe. And if it does, we can expect the biggest drop in oil to 20-25 dollars a barrel.


What’s waiting for us today?

05:00 Bank of Japan decision on interest rate
08:00 British Consumer Price Index June
15:15 U.S. Industrial Production for June
16:00 Decision of the Bank of Canada on the interest rate


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.

Trade

The bears are waiting

By | News | No Comments

14.07.2020 – Special Report. The S&P500 has just made the short leap into the annual plus. Was there something? Corona, maybe? Right – a second wave is imminent. And the company’s second quarter results could be horrible. In addition, the Federal Reserve could stop supporting the market. A number of pessimists have just spoken out about this. We are analyzing their statements.

The Fed warns

One of the most cited factors in the financial market at present is the fact that the Federal Reserve could simply step out of support for the market for a short time. In fact, the US budget deficit of $3 trillion has now reached the level of 14 percent of gross domestic product – the highest level of national debt since the end of the Second World War. The question is whether and how the Fed can and will continue to support the economy.
In fact, an important functionary has expressed himself in this very direction. Robert S. Kaplan, the president of the Dallas Fed, warned that emergency loans “won’t be left in place indefinitely”. He further stressed, “he is a believer that we will need to get back to more unaided market function without as much intervention from the Fed. We’re just not at that point yet. So, at some point, the Fed’s cheap money could dry up.

The Black Swan flies in

And the legendary Nassim Taleb also provided a bearish undertone. The creator of the Black Swan told CNBC that he does not expect a V-shaped recovery, which most investors believe in. We think: the charts say otherwise. However, according to Taleb, the rise in the market seems odd to him, as Covid-19 infections and deaths have increased. Although the masters of money printed this as if there was no tomorrow, this would not help.
Taleb expects that the fear of Corona would continue to plague the economy and the markets for some time to come. His conclusion: investors should not operate in the market without a “tail risk hedge”. We translate: A hedge for a completely unexpected and seemingly impossible event at the long, low end of the probability curve. Nassim Taleb literally: “If you don’t have a tail hedge, I suggest not being in the market [as] we’re facing a huge amount of uncertainty…

Crash warning ahead

And the readable blog “Motley Fool” also reminded investors that now was a good time to restructure the portfolio. Because there is a decoupling between the performance of the market and the real economy. Although millions of Americans live on unemployment benefits, the market has entered a rally. It said literally: “It’s evident at this point that another crash will happen; the only question is when. Here’s why investors should be bracing for a possible crash as early as this month.” So, at the end of July there’s the threat of a crash – we are excited.

Only a few stocks are supporting the rally

With this we let another bear have its say in the end. Bank of America Merrill Lynch warned against over-investment in the financial market – the value has now reached 5.6 times the US gross domestic product. Never before, however, has the market been so fractured, the BofA continued. If the S&P 500 consisted only of “tech, health care, Amazon, Google”, the price would be 4173, and if the S&P included “everything else”, the price would be 2924.

spx

We think: In fact, a gigantic misallocation of capital concentrated in a few big tech stocks. And thus the danger of a correction increases – if something is wrong with one of the few winners – balance sheet fraud, slump in sales, political squabbling – the whole market suffers.

The Golden Cross

As always, the counter-opinion remains: The bulls have just received support from the chart analysis. The “golden cross” has been shown – this is the crossing of the 50-day line from below over the 200-day line. Historically, this is bullish for stocks, according to Lance Roberts of RealInvestmentAdvice.com. Bloomberg celebrated the event by saying, “The S&P 500 is sending a technical signal that has marked the end of every bear market in modern history.” The event has occurred 25 times in the last 50 years. However, in a few years it was also a false signal.

It’s all up to Corona

Our conclusion from all this: Much, if not everything, depends on the corona development. Should a second wave ride in the sand, the stock market will have further upside potential. We advise investors not to look at the reported cases – they are subject to diligence or political denial in the tests. In other words, a country like the US, which carries out an enormous number of tests, will be at the top of the list here; China, on the other hand, which does not publish credible data, is way behind. The only two known factors are the number of deaths in relation to the number of inhabitants. If they are reported correctly, they are the right indicator. The question remains as to how the conflict between America and China will escalate.
The Bernstein Bank is keeping an eye on it for you!


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.

Morning Stock News

Will the stock market continue to grow?

By | News | No Comments

Gold   1797,485
(-0,27%)

EURUSD   1,1344
( +0%)

DJIA  26001
(+0,05%)

OIL.WTI  39,27
(-0,73%)

DAX   12561
(+0,01%)

As we estimated yesterday, the S&P 500 index opened with a gap up – at 3198.00. The US Federal Reserve continues to pump the stock market with new money. Investors are well aware of the current state of most American companies – the world economy is stagnating after quarantine.


S&P500

S&P500


Indices

The U.S. stock market showed slight growth during trading on Monday. And the Nasdaq updated its all-time high. Optimism for investors is being added by applications for the development of a vaccine against COVID-19. Good corporate reporting shows that unemployment situation did not reduce consumer demand as much as expected.
Particular attention this week will be focused on the reports of major Wall Street investment banks. The main risk is the massive delinquencies in loans, negatively affecting the bank balance sheets.


Gold

On Monday, gold continued to be in an upward trend. It looks like it seeks to test the local high of $1829.80 per troy ounce, which was reached on July 08.
The growth of yellow metal is justified. The coronavirus is not improving in any way and the US dollar is weakening against other currencies.


Bitcoin

Despite the growth of gold, the stock market and oil, Bitcoins are still in a narrow corridor. Today, the first cryptocurrency reached a price high of $9343. The longer the narrow corridor compresses, the stronger its exit in one direction or another. The last time such a low volatility was observed was at the beginning of March 2020, when the strongest fall followed, to the levels of $3500.


What’s waiting for us today?

08:00 Harmonized Consumer Price Index in Germany for June
08:00 UK GDP for May
11:00 Business sentiment index of ZEW Institute in Germany for July
14.30 US Consumer Price Index June
15:30 Address by the Governor of the National Bank of Switzerland Jordan River


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.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.