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13.02.2020 – Daily Report. Bad surprise on Thursday: The number of corona infections in China has increased dramatically. Almost 15,000 new cases in one day – Beijing is now allegedly using a new counting method. And it seems the People’s Liberation Army is now intervening. With this Beijing damages the confidence of the investors – the DAX resets.

Reset from all-time high

The unexpected turnaround from China initially boosted the DAX. The leading German index fell by 0.6 percent to 13,666 points. Yesterday, the DAX had marked another all-time high. After the previously sent out signals of relaxation during the epidemic, the indicator had risen to 13,759 points. In the end, the index had closed with a gain of 0.9 percent at 13,750 positions.
In view of today’s reports from the Middle Kingdom on the Covid-19 virus – now the official name of the World Health Organization – US futures also fell by around 0.7 percent.

Neck blow from China

The number of newly reported deaths in Hubei province in China, which is particularly badly affected, rose rapidly yesterday by 242 to 1310. In addition, 14,840 new cases were reported, according to the Health Commission – about seven times as many as the day before. The “New York Times” reported that China had used a new counting method – according to official statements, in order to be able to treat more people. ZeroHedge has prepared the numbers in a nice graphic way.

Cleanup in China

The fact that it is probably not just a matter of a counting method is made clear by the reaction of the leadership in Beijing. The head of the Communist Party for Hubei, Jiang Chaoliang, had to take his Mao cap, according to the Xinhua news agency. He was replaced by the former mayor of Shanghai, Ying Yong. The head of the party in Wuhan city, Ma Guoqiang, has been replaced by Wang Zhonglin, a former employee of the Shandong provincial government. Two heads of the health authorities in Hubei had already been dismissed on Monday.

The army intervenes

Now apparently the Chinese military is playing a greater role. The blog ZeroHedge referred to the daily report of the People’s Liberation Army: According to this report, Chen Wei, an expert in biochemical weapons, will be stationed in Wuhan to fight the virus. According to Epoch Times, Chen Wie holds the rank of Major General Until her interview with the state-run “China Science Daily” on 30 January, she was largely unknown. Interestingly, she had predicted in the interview that the outbreak would probably subside in the next few days, but could then soon regain strength. That is how it happened. Speculation that the virus could have escaped from the P4 laboratory in Wuhan – which could point to a bioweapon – has not subsided.

Slight losses on the Asian stock exchanges

All these events immediately caused distrust. China’s corona figures are as untrustworthy as its economic statistics, some brokers said. Haircut, embellished, fake. We are curious whether the abrupt deterioration of the situation will soon cause panic on the world’s stock markets. If you trade CFDs or online stocks, you should perhaps consider short positions for hedging. However, the Chinese crackdown may also be interpreted positively as determination. Especially if the current high numbers remain a one-time upward revision. Let’s wait and see.
The reaction of the Asian stock markets was initially moderate on Thursday. The CSI-300 fell by 0.6 percent in the morning to 3,960 points. The Nikkei in Tokyo lost only 0.1 percent to 23. 827 points.

US bull market continues

On Wednesday the US stock markets had risen, partly because of the supposed easing of the epidemic. All three major indices posted new records yesterday. For the first time in its history, the Dow Jones passed the 29,500 point mark to reach almost 29,569. At the closing bell, the index posted a gain of 0.9 percent at 29,551 points. The S&P 500 gained 0.7 percent to 3,379 points. And The Nasdaq Composite closed 0.9 percent stronger at 9,726 points.

Buying frenzy in US Treasuries

The US Treasury got rid of $27 billion worth of ten-year notes – the yield fell to 1.622 percent, almost 25 basis points below the January auction. This was the lowest yield since October, when 1.59 percent was achieved in the wake of burgeoning recession fears. The bid-to-cover rate was 2.58, the highest since June 2018.

The Fed remains vigilant

Meanwhile, the US Federal Reserve wants to keep an eye on Covid-19. Probably the effects would become apparent “quite soon” from the economic data, Fed Chairman Jerome Powell told the Senate Banking Committee yesterday. The consequences of the corona virus are likely to be “considerable” for China, but not for its direct trading partners. At the moment it is too early to assess whether the epidemic could lead to a “fundamental reassessment” of the economic outlook.

What the day brings

In the afternoon, important US economic data is scheduled, the overview can be found as always here: Market Mover

At 02:30pm the consumer prices for January will be published.
At the same time the weekly first applications for unemployment assistance are registered.
And also the real incomes in January.

The Bernstein Bank wishes successful trades!

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.

As we mentioned in one of the previous newsletters, the latest data from the Eurozone looks alarming. On Wednesday, no less terrible data was released on industrial production, which fell by 4.1% for the year. And all this against the background of the coronavirus story, which has not even begun in the EU yet. What will happen to the data in a month, when companies feel the rapid drop in orders from China?

The S&P500 chart of the day

Against this background, speculators have increased the maximum number of short positions on EUR since 2016. This is about futures contracts. As we know, such extreme values often end in a sharp price rise in the opposite direction. Short traders, especially those who use leverage, had to close their positions massively.

DAX30

Despite everything, the German stock index finally managed to show new highs. A solid consolidation above the values shown as early as 2.5 years ago indicates that the German stock market will start accumulating new cash flows of investors who believe that the worst for the German economy is happening right now. This means that the normalization of the situation and a new growth cycle will begin.

OIL

During the day, oil grew by 4%, but declined slightly by the close of trading. A sharp positive came to the market as China reported the minimum daily number of new coronavirus cases since early February. Thanks to this news, investors got the hope that the decline in fuel demand in China may not be as strong as previously expected. And of course, closing short positions of speculators gave an additional impulse.

What’s waiting for us today?

01.15 Speech by Bank of Canada Governor Poloz
08.00 Consumer price index in Germany for January
14.30 US consumer price index in January

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.

12.02.2020 – Daily Report. Stoically and calmly the bulls run to new records. The DAX marks an all-time high for the second day in a row. The MDAX is also booming. Wall Street also reports new highs. Oil is on the rise again. Because China is spreading optimism about the corona virus. And then there is the Fed.

New record for DAX and MDAX

Another new record on the Frankfurt Stock Exchange: In early trading, the German leading index topped the peak marked the day before. In the high, the price indicator climbed to 13,724 points. Most recently, the DAX was up 0.6 percent to 13,703 points.

The MDAX also boomed and climbed above the 29,200 mark for the first time, reaching 29,287 points. Most recently, the index of mid-sized shares was up 0.2 percent to 29,254 points. US futures rose by a good 0.3 percent.

The reason for all this: Beijing now expects the peak in new corona infections to be reached before the end of the month. Apparently, the number of recoveries climbed faster than the number of deaths.

Gains on the Asian equity market

Consequently, the brokers in Asia also took up the opportunity. The Chinese CSI-300 rose by 0.8 percent to 3,984 points. And the Japanese leading index Nikkei rose 0.7 percent to 23,861 points.

Warning of the energy shock

In the case of crude oil, the buyers were again on the scene: WTI rose by 1.5 percent to 50.70 dollars, Brent climbed by 2 percent to 55.10 dollars.

Meanwhile, the rating agency Fitch pointed to a little-noticed, but perhaps trend-setting niche for the stock markets: According to this, the market for Liquefied Natural Gas (LNG) could slide into a big hole because of China. Spot prices and freight rates have already fallen, which indicates that world trade will suffer a severe setback in the first quarter. And LNG importers in China have already announced that they will probably have to cut LNG imports by 70 percent in February. Fitch noted that Chinese LNG imports accounted for about 17 percent of the world market in 2018 and were responsible for 50 percent of the total growth in demand between 2016 and 2018.

Record hunt in New York continues

Nevertheless, many brokers were apparently afraid of missing the rally recently. And when prices rose, they took the profits with them for safety’s sake. Thus, the Dow Jones climbed to a new high yesterday of 29,415 points. But at the closing bell, the leading index went out of trading at 29,276 points. The high-tech indices and the S&P 500 even posted new closing records. The S&P climbed 0.2 percent to 3,358 points. The Nasdaq 100 squeezed out a minimal gain of 0.01 percent to around 9,518 points.

The broker Gorilla Trades pointed out an interesting fact on the blog “ValueWalk”: While small caps have been lagging behind in recent weeks, the Russell 2000 now confirmed the bull market. However, the index still has a lot of catching up to do. The Russell 2000 closed yesterday with a plus of 0.6 percent at 1,678 points.

The Fed is ready

Meanwhile, US Federal Reserve Chairman Jerome Powell made it clear in front of the House of Representatives that the Federal Reserve would stick to its loose monetary policy. The epidemic in China is a new factor of uncertainty. At the same time, he painted a rosy picture of the US economy: it had recently grown moderately by a good 2 percent and the unemployment rate was at its lowest level for decades. For investors, this is a Goldilocks situation: Goldilocks can look forward to a booming economy and cheap money on the stock market at the same time.

Bye, bye Dems

On top of this comes US politics. So now the self-declared socialist Bernie Sanders has won the Democratic primary in New Hampshire. This increases Donald Trump’s chances. And Wall Street looks forward with satisfaction – bull market. Gallup has just published a survey of 1,033 voters, and above the 1,000 mark such a mood is considered representative. According to the survey, only 45 percent of the eligible voters said they would vote for a socialist; 53 percent voted against. The distribution within the electorate is interesting: Of the Democrats, 76 percent would vote for a Red; of the Independents only 46 percent. And of the die-hard Republicans, only 17 percent.

What the day brings

Wednesday has only a few important dates, as always you can find an overview here: Market Mover

Fed Chairman Powell will first address the Senate Banking Committee at 4 p.m.

Shortly thereafter, at 4.30 pm, the Energy Department’s oil report will arrive.

The Bernstein-Bank wishes successful trades!

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.

Of course, we are talking first of all about the growth of the American market, which is showing new highs. It may seem that the situation is a bit absurd. There are huge risks hanging over the markets, and they keep growing. However, experienced traders understand that the situation may remain absolutely absurd for a long time.

S&P500 chart of the day

The latest news that the whole world is discussing. It turns out that the coronovirus tests are wrong in about 30-50% of cases. So there may actually be 2 to 3 times more infected. As we noted in the previous newsletter, only one question is critical. Whether the epidemic will start to spread in the world at the same rate as in China.

EURO

On Tuesday, the European currency interrupted its 6-day decline. The euro/dollar almost touched last year’s lows and pushed up. As usual, the markets took a break, removing the stops of traders, waiting for further decline.

GOLD

Gold dropped slightly after 4 days of growth. Nothing has changed fundamentally. As central banks continue to print money endlessly, yellow metal looks like one of the main assets protecting against inflation.

BITCOIN

The second such asset is Bitcoin. After a small correction, it shows new yearly highs. A new idea begins to unfold. While the Chinese banks were closed due to New Year’s Eve, a huge number of settlements between China and the outside world were made in cryptocurrencies. This is what analysts are drawing attention to as one of the main reasons for the growth of the first cryptocurrency.

What awaits us today?

02.00 New Zealand Reserve Bank Interest Rate Decision
02.00 Accompanying letter from the Reserve Bank of New Zealand
11.00 EU industrial production level for December

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.

11.02.2020 – Daily Report. Was there something? The corona virus is raging, and the death toll is in the thousands. Yet Wall Street has broken all records. And the DAX is also lurking just below its all-time high. So far, the stock market has also ignored the domestic political quake in Germany.

Frankfurt Stock Exchange lurks below the peak

The stock market can be so paradoxical: Regardless of the current dangers for the economy and the business cycle, the DAX had risen by 0.7 percent to 13,589 points by midday. Right at the start of trading, the leading German index had even climbed to 13,638 points. Thus, only 2 points were still missing from the all-time high from January. US futures provided a tailwind, gaining 0.3 percent.

Hope for corona containment

Investors in global trade clung to the hope that China would soon return to normality. In the meantime, the number of deaths has risen to 1,016, according to the Health Commission in Beijing. But: The number of new infections has decreased on Tuesday compared to the previous day. Nationwide 2,478 more cases were reported, bringing the total number of confirmed infections in China to 42,638.

Rising prices in China

Ergo, the investors in China took action in the morning. The Chinese CSI-300 rose by 0.9 percent to 3,952 points. In Japan, the stock exchange remained closed due to the commemoration of the founding of the empire. But Saxo Bank analysts recently warned that equity investors underestimated the risk to the global economy in terms of corona. Instead of looking at stock prices, they should look at commodities. At this point, we had repeatedly recommended looking at copper and oil.

New records in New York

Meanwhile, confidence in the market economy continued to boost Wall Street. In the USA, the strong balance sheet figures were responsible for the buying mood. So far, 324 companies have presented interim reports in the S&P; around 71 percent have exceeded analysts’ expectations. The S&P 500 and the indices on the Nasdaq, for example, reacted with new record runs. The S&P gained 0.7 percent to 3,352 points. The Nasdaq Composite Index climbed 1.1 percent to 9,628 points. The Dow Jones Industrial, which reached a record high of 29,408 last Thursday, rose 0.6 percent to 29,277.

Gold remains in focus

The gold price corrected by a minimal 0.2 percent to 1,568 dollars. The blog “ValueWalk” commented that the price was nevertheless still supported by the Corona fear. According to data from the Commodity Futures Trading Commission, major speculators have capped their bullish positions by 17 percent. Nevertheless, this could be good news for the gold price. For the financial service Kitco has noted that gold is now less vulnerable if speculators sell gold on a large scale.

What the day brings

On Tuesday the diary will bring only a few interesting events, as always you will find the overview here: Market Mover

At 4:00pm the start of the two-day hearing of US Federal Reserve Chairman Jerome Powell before Congress will be important. So if you trade dollars, US Treasuries or US Indices, you should keep an eye on the regular market updates.

The Bernstein Bank wishes you successful trades!

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.

The European currency has been declining for 6 consecutive days. We haven’t seen such a thing for a long time. All last year, speculators and carry traders tried to push the EUR down, which was not very successful. The EUR/USD pair was most likely supported by informal Central Bank agreements. Their aim is the maximum stability of money markets.

EUR/USD chart of the day

But this cannot go on forever, especially given the extremely poor economic data coming out in the EU in the last 2 weeks. Against this background, the positive picture that the American economy is showing looks just frightening (for EURO). And the negative swap on the pair did not go anywhere.
The nearest support level at 1.0884 is the minimum for 2019. If it is broken through, the downside potential of the pair will increase.

INDICES

On Monday, stock indices showed mixed dynamics. The American market continued to grow, while most European and Asian indices showed a slight negative dynamics. In fact, stocks are only held on the huge infusions of money printed by the central banks. Otherwise, they would have collapsed a few days ago. It is likely that fresh data will be released during the day on Tuesday, indicating that the number of victims of the coronovirus has exceeded 1000 people. Psychologically, it would be a very strong blow to the investors’ shaky nerves.

OIL

Black gold keeps falling. Despite the fact that the Chinese New Year ended and the holidays were not extended. Yes, a lot of people went to work. But at the same time, a large number of enterprises, especially those related to logistics, continue to remain closed, which does not justify the hopes for increased consumption of petroleum products.

What is waiting for us today?

10.30 British GDP data for the 4th quarter of 2019.
10.30 UK industrial production level for December
16.00 Address by Federal Reserve Chief Powell to Congress

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.

10.02.2020 – Daily Report. The youngest resets doesn’t have to scare the bulls. Not yet. Because Wall Street is lurking among the multiple all-time highs. Even the much weaker DAX is relatively close to the peak. New issues were initially scarce.

Frankfurt Stock Exchange waits

Only a few real financial news items were circulating on the trading floor – only the weather at the start of the week was stormy. So the old topics were the new ones: corona virus, strong US balance sheet season, even stronger labour market data in the US. And a bit of a customs dispute. Everything as usual. So the DAX reacted on Monday afternoon with a 0.4 percent minus at 13,463 points. Last week’s all-time high had been just under 13,600 points. On Monday, US futures also fell by around 0.2 percent.

Corona and no end

The warning from Tedros Adhanom Ghebreyesus, head of the World Health Organisation, caused scepticism. He expressed concern about the cases among people who had not been to China. Perhaps this is just the tip of the iceberg. In fact, the number of deaths has now risen above that of the SARS epidemic in 2002/2003, to over 900. The number of newly detected corona cases has climbed by a good 3,000 to over 40,000.

Warning of oil and copper

The oil and copper markets illustrate that the epidemic will probably cause severe damage to the global economy: unlike the world’s stock exchanges, these are more reliable indicators of the global economy, since there is far more real demand and fewer speculators are active. And both copper and oil are currently in a bear market. WTI slipped below the USD 50 mark (down 0.8 percent to USD 49.90); and Brent lost the same percentage to USD 54. After a slight recovery in recent days, copper fell by 1.3 percent to around USD 5,653.

Small news in the customs dispute

The customs dispute also caused minimal worry lines. Because for economically rather insignificant goods such as steel nails, staples, wire and cable, punitive tariffs came into force in the USA over the weekend.
No clear trend in Asia
The Japanese stock market, for example, held back for the time being on Monday. The Nikkei 225 closed with a minus of 0.6 percent at 23,686 points. In China, however, prices climbed: The CSI-300 gained 0.4 percent to 3,916 digits. Investors in the People’s Republic reacted with applause to an announcement by the domestic central bank: it intends to support the economy with an aid package worth billions.

New York consolidated

Investors in New York had taken profits on Friday. The Dow Jones Industrial, which had climbed to a historic all-time high the day before, lost 0.9 percent to 29,103 jobs on Friday. For the entire week, the yield was around 3 percent. The S&P 500 dropped 0.5 percent to 3,328 on Friday. And the Nasdaq 100 also lost 0.5 percent to 9,401 – after all, it still marked a record high during the course of the day.
Even the robust job market did not create a buying mood. According to the Department of Labor, the USA created 225,000 new jobs in January – 165,000 new jobs had been expected. And the reported business figures were a good 70 percent above expectations.

America, you have it better

Since news was in short supply on this slack day, here is another reading tip. If you want to find out how political issues really influence Wall Street, you should – besides our news – read a new US book. But not in the German Journaille. In the “Heute Show” on Friday, for example, it was said that Joe Biden was now only defeated in the primaries because he was thrown dirt on him without any justification.
The current number one on the “New York Times” bestseller list paints a completely different picture: “Profiles in Corruption: Abuse of Power by America’s Progressive Elite”. Author Peter Schweizer sheds light here on the dirty business of Democratic grandees Joe Biden, Bernie Sanders, Elizabeth Warren, Amy Klobuchar and Kamala Harris. So the US voter gets a balanced picture. If only a fraction of what the book says is true, the Democrats will be destroyed in the November presidential election. Which should give Donald Trump a Republican-dominated Congress. And a nice bull market for the Wall Street bulls.

That’s what the day will bring

The diary does not show any really important events on Monday, you can find the overview as always here: Market Mover

The Bernstein-Bank wishes successful trades!

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.

Summing up in our newsletter, we noted that the main beneficiary of 2019 was Bitcoin, which grew by almost 100%. And we advised to pay close attention to it in the new year. On Sunday, the first cryptocurrency rose above $10,000.

Chart of the day S&P500

At the same time, as we supposed, the breakthrough of the level of 10k was not fast, with the price going up or vice versa, fast profit taking and not less fast rollback.
Now the bitcoin resembles a snowplow, which is slowly but surely moving along the road, clearing the way of snow. Futures contract sellers shorting BTC act as snow.

S&P500

Friday’s published data on the number of newly created jobs in non-U.S. agricultural sector were better than predicted. On this news, all indices were impulsively shot up. But, literally, after a few seconds, a powerful sale started, which we had predicted in the previous newsletter. After 4 days of growth, before the weekend, speculators hurried to fix profits. And large investors did not want to continue buying shares, not knowing what awaited us on Monday with news from China..

GOLD

And this news will be disappointing. Despite the brave assurances, the number of newly discovered cases of infection continues to grow rapidly. This week will be critical to understanding whether the epidemic will start to develop outside of China. The latest figures for the world’s infectious diseases are almost the same as those we saw 20 days ago in China itself, when fewer than 1000 more were identified.
Against this background, gold looks like a “lagging asset” compared to the cryptocurrencies that have been shot up. Which means its growth potential is far from being exploited.

What’s waiting for us today?

02.30 Consumer price index in China for January
07.45 Unemployment rate in Switzerland for January
14.15 Speech by Fed representative Bowman

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.

That’s what you might call what’s going on in the American stock market. As we estimated yesterday, the S&P500 was tested at its all-time high on Thursday. And not just tested, it was a confident breakthrough up.

Chart of the day S&P500

It seems that Americans do not care what happens in the world. They’re doing fine and they don’t have any problems. An additional driver, for the positive side, was the final closure by the U.S. Senate of the Donald Trump impeachment story.
The market grew up four days in a row. If you remember the past trend years, there was usually a correction on Fridays. Speculators recorded the profit accumulated during the week. Let’s see what will happen today, especially in the focus of release of the most important monthly data on the number of newly created jobs and the unemployment rate in the USA.

Gold

Despite the positive stock markets, gold has moved upwards with confidence. The correction for the yellow metal is over, the breakthrough of 1600$ per troy ounce is ahead. And if the Coronavirus story continues in the coming weeks, we should soon see new highs for the last 6-7 years.

Crypto

Bitcoin has grown a little more. But it’s not him who’s attracted attention today, but the rest of the altcoins, which have grown by 5%-15% in the last 24 hours. What’s that? Investors again see the prospect of investing directly into the portfolio of cryptocurrency, and not just in BTC? If so, this is a new trend, which we have not seen over the past year.

NEW ZEALAND AND AUSTRALIAN DOLLAR

Interesting dynamics is shown by the data of 2 currencies against the US dollar. To be more precise, there is no dynamics. Last 4 days the pair is actually locked in a very narrow corridor. And this is at a high volatility in the commodity markets, which are directly related to these commodity currencies. On Friday, the data on unemployment in Canada is also released. Speculators should pay attention.

What’s waiting for us today?

01.30 Commentary of the Reserve Bank of Australia on monetary policy
14.30 Number of new jobs in non-agricultural sector in USA for January
14.30 Changes in Canada employment in January

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.