News

A few days ago we were speculating about what would happen to the Japanese currency in case of a correction in the stock markets. On Friday, the American stock market was declining for the second consecutive day. This has not happened since mid-June. We cannot even call it a small correction yet. The decline was only 2%. But what is happening in the pair dollar/yen?

USD/JPY

Above is the weekly chart of this pair. It is not the usual daily timeframe, but the weekly one. To visually easier understand the potential of the movement. The nearest target, if the correction in the stock market will continue, is 100 yen for 1 USD. And then the abyss opens.
Our readers may argue. In spring, on the decline, the pair did not go below 100. Yes, it did. But there’s a big difference. In the spring, there were not yet trillions of new dollars in the market. And now there are. And there’s pressure on the U.S. dollar, which started falling to all currencies.
To get an even better idea of what’s going on, you should look at the monthly chart. And remember where this pair was against the background of quantitative easing after the 2008 crisis. So, during several years dollar/yen pair was significantly below the level of 100. And it was going down to the values of 75 USD/JPY. Although it’s hard to believe it now.

Gold

At the auction on Friday, yellow metal grew for 6 consecutive days. From the highs of the day only about $ 15 left to the top, which was shown in 2011. Theoretically, there is no reason why we won’t see a new all-time high this week.
Further the situation can develop in 2 ways.
• The market will make a small correction related to profit taking. And then there’ll be a small flat again.
• The market on the contrary will accelerate to reach the level of $2000 as soon as possible.

What’s waiting for us today?

10:00 IFO Germany Economic Expectations Index for July
14:30 US Durable Goods Orders in June
16:30 U.S. Dallas FRS industry index for 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.

On Thursday, the stock markets underwent a powerful correction. Investors take profit and leave the stocks. What happens in the forex market in this case? Everyone goes into protective assets. There are only three of them: the US dollar, the Japanese yen and the Swiss franc.

EUR/USD

In this case, the Japanese yen and the Swiss franc have grown. They included money from investors who sold their shares. And the American dollar went down again. The chart above is very instructive. Before that, the euro rose against the dollar for 4 consecutive days. Thursday was a great opportunity for turning around to punish the buyers of European currency.
Instead, the dollar fell heavily against the euro again, showing a green candle on the chart for 5 consecutive days. You know what the most interesting thing is? It was after the breakthrough of the level 1.16 that the first conversations started, that the next target is 1.20. If the conversations just started, it indicates that the trend is in its middle. Theoretically, it can hold a lot of new money flowing into the EURO.
And when asked, why is this happening? We recommend you to reread our previous few mailings. The main thing is what we should start thinking about. The trend may last until the presidential election in the United States.

Gold

From the highs shown on Thursday, the gold metal is only about $ 20 left to the epic level of autumn 2011. Some may think that the price of $1,920 per troy ounce will be the ultimate goal of speculators. However, this is not the case. Yes, a 2-4% rollback may occur at any moment. This will be a new opportunity for buyers to enter the position on a rollback. Who will take advantage of this situation? The biggest investors who believe in the dollar less and less.

Oil

Oil did not follow a number of risky assets and declined by the close of trading on Thursday. In this case, the fall of stock markets became an excellent signal for profit taking. The main question remains. If the S&P 500 index continues to grow again tomorrow, will black gold follow it?
Ahead of us there will be autumn and complete collapse of the tourist industry. It is clear that this year the volume of air traffic will not be able to return even to the levels of 20 years ago. The demand for oil will not recover. On the other hand, American oil shale companies can take advantage of the situation.
Of course, it is silly to reopen closed wells in the calculation that oil will cost $40. But shale oil companies can make you smarter. Sell oil supply futures at this price a couple of years in advance. And then, of course, defrost the wells. As a result, already in 1-2 months we can see the growth of oil production in the USA and Canada again. And it will be a moment of full cap for the oil sector.

What’s waiting for us today?

08:00 UK retail sales for June
09:30 German Manufacturing Index July
10:00 EU Manufacturing Index for July
10:30 UK Service Business Index July
16:00 U.S. New home 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.

On Wednesday, everything was unchanged in the markets. The dollar was falling, and risky assets were growing. So let’s talk about global… fairy tales. Kids believe in miracles until they’re 6 or 7. Adults don’t believe at all… or rather they didn’t until recently.

S&P 500

The American stock market is now at levels above the beginning of this year. That being said:
– US unemployment rose from 3.6% to 11%.
– Budget deficit in the US, up to 20% of GDP.
– Government debt exceeded 100% of GDP.
– Oil industry is in ruins, oil production fell by 20%.
– Travel and airlines are actually bankrupt.
– Retail sales fell sharply
– GDP will decrease by 6-8% as a result of the year
Now let’s take a look at geo and domestic politics:
– Tensions with China escalated sharply over the events in Hong Kong
– The coronavirus epidemic is no longer at its peak in Europe, but in the United States.
– Mass demonstrations and pogroms against the backdrop of African-American police deaths
At the same time, American stocks are at their historical peaks. Are you gonna say that’s crazy? Yes! That’s crazy. You’re saying it’s impossible to understand? Yes! It’s impossible to understand it.

Gold

In the last 2 days yellow metal has grown by another $50. There is also $50 left to its historical maximum, which was 9 years ago. It seems that the nerves of investors and speculators simply did not hold out and gold is being bought at any price. And they’re doing it right, given that no one is waiting for it below $2,000 per troy ounce by the end of the year.

Bitcoin

But Bitcoin, as we noted yesterday, refuses to grow again. He may have played back the biggest fall that happened in March long ago. We would like to remind you that in just 1 day the first cryptocurrency decreased by 2 times. Then there was a very fast rebound, which was provided by the buyers. But there are no new buyers in the market yet. Therefore, the demand cannot exceed the supply in any way. In any case, this situation will not last long. From the beginning of September, the active players will return to the market, and will sharply move a pair of bitcoin/dollar in one direction or another.

What’s waiting for us today?

14:30 Initial weekly unemployment benefit claims in the United States
16:00 Consumer confidence level (preliminary) in EU for July
17:00 US Federal Reserve Bank of Kansas industrial activity level for 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.

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

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.

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.

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

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.

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.

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

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.

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

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.

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

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

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