Do the markets recover from the impact?

By 26/02/2020News
Morning Stock News

Gold   1645,09
(+0,63%)

EURUSD   1,0877
( -0,03%)

DJIA   27191,50
(+0,27%)

OIL.WTI  50,07
(-0,06%)

DAX   12626,50
(+ 0,01%)

Tuesday was another day of big sale in all world markets. The coronavirus scares everyone so much that most investors want to sit in “quarantine” this hard time. The infection zone is expanding, uncertainty is growing, and companies are calculating possible losses. Further sales may well continue.


DAX chart of the day

DAX chart of the day


STOCK MARKETS

Throughout Tuesday, not a single positive piece of information appeared in the world news that the virus had begun to be dealt with. Although many analysts thought that no virus could have a global impact on a strong economy, this is not the case. In the world already now the majority of companies start to calculate the lost profit because of various quarantines, production stoppages and fluctuations of prices for raw materials. And they put in very substantial amounts, up to 20%. It is simply impossible to predict the market movement in this situation. On Tuesday the DAX index loses another 1.8%, Dow Jones 1.6%, S&P500 1.75%.


US Dollar

In order not to talk about the world’s major currencies, it’s better to talk about the U.S. dollar. The serious growth since the end of January had to stop somewhere. Only technically, the rebound of the US dollar index from the level of about 100 could have been predicted with a probability of 95%. This is a very strong psychological level and of course a sufficient number of investors fixed their profits near this level. Therefore, correction to the major world currencies has started now. While there is uncertainty in the stock markets, the US dollar index is decreasing to the level of 98.91 . Probably, the correction should end soon and the upward trend will continue.


OIL

Black gold is falling for the fourth consecutive trading day. Companies cannot assess the risks they will face in the near future, so the demand for oil is inevitably falling. OPEC cannot agree on a reduction in oil production because of Russia. Even options are being considered to bypass the veto and reduce OPEC+ production in order to somehow compensate for losses from the spread of virus. Brent loses 2.3% on Tuesday and trades at $54.4 per barrel. We follow the data on U.S. crude oil reserves on Wednesday. If the forecast is confirmed, the price may fall even lower.


What is waiting for us today?

14.30 ECB Chairman Christine Lagarde’s speech.
16.00 New housing sales in the U.S.
16.30 US crude oil reserves.


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