The stock market has started to revive

morning-news

Gold  1769,82
(+0,81%)

EURUSD   1,1567
(+0,11%)

DJIA  34603
(-0,12%)

OIL.WTI  78,85
(+0,01%)

DAX  15200,55
(-0,03%)

The first trading week of October is coming to an end and it is ending on quite a positive note. There is plenty of good news in the USA regarding the economy, which restores optimism in the markets and once again makes you buy.


S&P500

S&P500

The first positive news is the clearing up of the crisis around the US national debt ceiling. There has been a proposal to suspend the national debt ceiling until early December, and the Senate majority leader has confirmed that such a proposal is likely to pass. Of course, no one thought that the government would allow a default. After all, it has been done so many times before. It would be better to abolish the ceiling altogether so as not to temporarily confuse investors. It will be impossible to stop the growth of debt in the foreseeable future anyway.
The second piece of news is that energy resources are getting cheaper. Vladimir Putin’s well timed speech about Russia’s willingness to increase gas supplies to Europe has dampened the fervour of the market and resulted in UK spot gas prices falling by almost 50% and futures prices falling by 7% over the next month. Optimism is returning. Following gas, oil began to fall. A record rise in US inventories, as well as statements by the US that it might be selling oil from its strategic reserves, put pressure on the market. As a result, oil fell to the $76 level. Demand for oil remains strong, so a correction is likely to be short.
And the third news is the virtual meeting between Biden and Xi Jinping before the end of the year. A good sign for a warming of US-China relations. Perhaps the leaders will discuss the current sanctions on Chinese companies that have been imposed by Trump. So far, Biden has yet to lift any.
Overall we can say that the backdrop is positive and the correction is probably over. Although many thought that rising bond yields would stop the stock market but the current percentage is not sufficient for that yet. For the big players to start moving into bonds, yields have to be at least 2%.

08.00 German trade balance for August
14.10 Address by ECB head C. Lagarde
14.30 US nonfarm payrolls for September


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