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.
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.
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.
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.