The market has punished the speculators

By 03/08/2020News
Morning Stock News

Gold   1974,715

EURUSD   1,177
( -0,05%)

DJIA  26267,50

OIL.WTI  40,01

DAX   12320,545

There’s a well known trading pattern. If the price goes one way (rising) during the month, the closing of the monthly candle will be at the maximum of this candle. This is exactly what speculators were waiting for, continuing to sell the US dollar against all currencies. But this time it did not work!



July 31, the last day of the month, was the day of profit taking. The dollar rose sharply not only against EURO, but against all currencies as well. Including even shelter currencies, such as the Japanese yen and the Swiss franc.
At the same time, the data on GDP of France became an additional negative factor specifically for the EUR. The GDP of France in the second quarter fell by about 2.4 times less than that of the USA. However, this decline was perceived as “normal” in America. And in France, it was a disaster.
We think that the US economy is much more mobile than in the EU countries. American companies can very quickly reduce the volume of production and services, dismissing workers without consequences. In Europe, in terms of mobility, it’s much worse. And firing employees is a very expensive process.
So American companies, when the time comes, can quickly restore production volumes. But you can’t say that about European companies.

DAX 30

The above is confirmed by the European shares and in particular by the DAX 30 index. It behaves much worse than its American counterparts. Investors believe that the situation in Europe may start deteriorating rapidly again in autumn. Although, how much worse can it be? Therefore, those who prefer to invest in stocks, quite reasonably choose the American stock market.


The first cryptocurrency continues to grow steadily following gold. On Sunday morning, the quotes were at $12150. Then within 10 minutes there was a powerful correction of 1500$. It is a movement that we all missed so much while the price was 1.5 months in a narrow corridor.
What caused such a sharp drop in the bitcoin? There’s only one reason. The stops were triggered and the price went down. If you look at the history, you can see that Sunday is the leader in such movements, compared to other days of the week. Big investors and speculators are resting, so even small sales volumes can move the market strongly.

What’s waiting for us today?

10:00 EU Manufacturing Index for July
10:30 UK Manufacturing Index July
16:00 US Manufacturing ISM 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.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% 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.