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Week in a Glance: Moderna, Bitcoin, US Stimulus and Brexit The agenda on financial markets last week did not change much: they continued to monitor long-term projects (Brexit and US stimulus), rejoiced at new vaccines (this time from Moderna), watched the continuation of Bitcoin's movement into outer space, as well as ultra-soft monetary policies of the leading central banks (FED, Bank of England and Bank of Japan) and new pandemic records. There were no radical changes in market sentiments last week: the level of fear (VIX index) continued to remain at the lowest levels since the start of the pandemic. This means that the demand for risky assets prevailed in financial markets: stock markets and commodity markets demonstrated growth, but the greatest activity was recorded in the cryptocurrency market. In a couple of days, Bitcoin added about 20% to its price and updated historical highs. However, the higher you climb, the more painful you will fall. The last two Bitcoin bubbles bursts, with over 80% loss in value, began in December. So, do not be surprised if something unimaginable happens on the cryptocurrency market already this week. Oil grew last week. It was not stopped even by the rather gloomy prospects for the oil demand from both OPEC and EIA, which simultaneously worsened their own forecasts in their monthly outlooks. Again, if we believe that the likelihood of fixing profits at the end of the year is high, then this week oil, like the stock and crypto markets, may undergo massive sales. Or maybe not. The fact is that news about vaccines is consistently setting the market in a positive way. Another vaccine was approved in the US last week. This time from Moderna. That is, by the end of the month, 10-20 million people can be vaccinated in the United States. In addition, the markets were looking for a positive and found in the news about the stimulus package for the United States. On Sunday, Democrats and Republicans managed to reach an agreement, and today vote for a package of $ 900 billion is due. All week the attention of traders in the foreign exchange market was riveted on the news from the negotiation process between the UK and the EU. On Sunday there was a deadline, after which MEPs will no longer vote anything until 2021. Despite the statements about a breakthrough in the key issue of fishing, the parties do not have a deal yet and plan to continue negotiations today. The pound opened with a gap down today as a new type of the coronavirus was discovered in the UK. According to preliminary data, it is 70% more infectious. In Europe, countries are starting to restrict air traffic and are thinking about other measures to isolate them from the UK. The coming week will be half-holiday. Accordingly, there will be few fundamental events. But the combination of overbought and thin market at the end of the year is a highly explosive mixture. If ever there is a flash crash, it's this week. So, we are preparing for the most powerful corrective movements this week.
Short
by Trade24Fx
2
Bitcoin and Tesla, Pandemic and Macron, Moderna and BoEThe main event of the day yesterday is Bitcoin's super growth. In two days, the cryptocurrency gained 20%. We will not talk again about bubble in the cryptocurrency market - this is too obvious. We only note that the last two bubbles started to collapse in December 2013 and 2017, respectively. This does not mean that history will repeat itself this time, but December is the best fit for fixing profits. And profit fixation is perfect for the role of a needle, which will provoke a bubble deflation. By the way, both of the last bubbles ended with a loss of over 80% of the price. Bitcoin showed historical highs against the backdrop of new pandemic records. The maximum number of new cases in the world, the United States and Germany. The maximum number of deaths in the United States, etc. Even French President Macron caught the coronavirus. As a result, the European leaders are self-isolating. Another cause for concern was information about another allergic reaction to the Pfizer vaccine this time in the United States, as well as the loss of a large shipment of vaccines due to improper storage. But markets were more interested in the FDA's decision on the Moderna vaccine. As expected, approval was received. So, from next week in the United States will be vaccinated with two vaccines. In addition, the focus continued to be on the fate of US stimulus. As usual, a lot of talks on progress, but no deal on the table. From other news, we note that the Bank of England left the parameters of monetary policy unchanged. The data on the initial jobless claims in the US were again worse than forecasted and showed growth, recalling the consequences of lockdowns. Today, after the market closes, Tesla will be included in the SP500 index. We continue to consider this a stupid move from the index committee, which will cause problems to the index when the Tesla bubble collapses. By the way, over the past 31 years, when a large company was included in the SP500 index, its shares were declining by 7% over the next year. And the shares of the company, which at the same time was excluded from the index, grew by an average of 20%. So, lets sell Tesla and buy Apartment Investment and Management!
NASDAQ:TSLAShort
by Trade24Fx
6
About market optimism and why it is still prematureFinancial markets were full with optimism yesterday. Bitcoin surpassed the 20K mark, European indices (in particular, the German DAX) reached their highest levels since February 2020, US stock indices stormed historic highs, and oil reached the highest marks since March 2020. What made the participants of the financial markets so happy? To start with, general optimism has been a topic that has dominated the financial markets since late spring. So, in general, nothing fundamentally new has happened. In addition, the Moderna vaccine must be approved in the United States today, which continues to promise a bright future for the world as a whole. The data on business activity in the Eurozone, the UK and the US for December were far from disappointing. All this was superimposed by comments from EU officials about a progress in negotiations with the UK. In addition, following the meeting of the Federal Reserve Open Market Committee, the US Central Bank upgraded its forecasts for the growth rate of the US economy in 2020 (strange, but true). The FED now expects the economy to contract 2.4% in 2020, compared with a previous forecast of a 3.7% contraction. In 2021, the Fed expects the economy to grow 4.2% and 3.2% in 2022, up from previous estimates of 4% and 3%, respectively. The rates were left unchanged, but made it clear that their ultra-low values are for a long time (at least until 2023). As you can see, in general, there were enough reasons for optimism. On the other hand, there are many reasons for concern. US retail sales data reminded that the pandemic and lockdowns have a very concrete price to pay: US retail sales fell 1.1% in November, the first significant decline since April. Pandemic in the United States, despite the start of vaccination, does not think to subside - yesterday almost 250K new cases were detected and a new record should be expected by the end of today. In the world as a whole, the situation is even worse. The question of stimulus in the US is still open, and with Brexit situation is still not clear, as UK officials said key disagreements still exist. So, everything is far from so simple. Yesterday data from the EIA showed a decline in US oil stocks by 3.13 million barrels, which, however, was slightly less than analysts' expectations and in any case pales against the background of an increase in stocks by 15 million barrels last week. Today promises to be no easier than yesterday. In addition to the already mentioned possible approval of a vaccine from Moderna, the markets are awaiting a decision from the Bank of England on the parameters of monetary policy in the UK, data on jobless claims in the US will be published, as well as statistics on the housing market in the US.
FOREXCOM:NAS100Short
by Trade24Fx
Lockdowns, EIA Forecasts, Fed and Retail Sales AheadNews about vaccines gives positive sentiments, but they are clearly ahead of current reality. Here and now the list of knockdowns is expanding. Following Germany (the fourth economy in the world) and California (the fifth economy in the world), London is introducing a hard lockdown this week, next in line are New York, Italy and the Netherlands. Against this backdrop, it was logical that OPEC and EIA downgraded forecasts for oil demand growth rates. In particular, the EIA lowered its own demand forecast for 2021 by 170 thousand bpd. At the same time, the Agency noted that oil production increased in November and will continue to grow in December, because from January 1, OPEC + will increase oil production by 0.5 million bbl / d. Countries that are not members of OPEC + will continue to increase production. But the markets continue to ignore this, as well as the fact that according to API data, US oil stocks have been growing for the fifth week in a row. As a result, the price for oil increased yesterday. The reason is, in general, the same - expectations of a fast economic recovery amid victory over the pandemic (there is neither the first nor the second, and will not be in the foreseeable future). Yesterday was an interesting topic for US stimulus. U.S. congressional leaders reported substantial progress on Tuesday after two meetings of top Democrats and Republicans. Today promises to be extremely busy day both in terms of macroeconomic statistics and other news including FOMC meeting results. The top news in the field of statistics will be data on retail sales in the United States. Considering that the data are for November, rather weak figures can be expected. As for the Fed, the updated forecasts for the US economy from the Central Bank are of the greatest interest, since the parameters of monetary policy are likely to remain unchanged.
TVC:USOILShort
by Trade24Fx
2
Biden - President, Brexit hopes and oil issuesYesterday, the US electors, following the tradition of more than two hundred years, drew a line under the US Presidential elections. Biden is the President. But the winner will be officially announced on January 6, when Congress counts the electoral college votes. Markets now have no time for traditions and formalities. In the US, everyone is more concerned about the fate of the economic stimulus package simply because in a couple of weeks about 12 million receiving unemployment benefits are at risk of being left without additional financial support. The pound showed increased volatility as usual yesterday. Its growth yesterday is based on the hopes that an additional round of negotiations will finish with success. However, even if it is succeeded, you should not rejoice. London is on the verge of a complete lockdown, and the UK economy is at risk of being the main loser in 2020. Everything looks rosy enough for oil, which continues to grow steadily. And it doesn't matter that last week 2 out of 5 largest economies in the world decided to radically tighten restrictive measures with all the consequences. It doesn't matter that in a couple of weeks OPEC + will release an additional 0.5 million bbl / d to the oil market. It doesn't matter that Libya has increased production 10 times, and the United States has added an average of 0.5 million bbl / d over last two weeks, while China has sharply reduced oil imports. Nevertheless, all this exists and it will not be possible to ignore all these factors indefinitely. So, our position on oil is unchanged - we sell from the current ones. Moreover, just yesterday, OPEC published its monthly report, in which it lowered its forecasts of global fuel consumption in the first quarter of 2021 by 1 million barrels per day.
TVC:USOILShort
by Trade24Fx
2
Week in a Glance: pandemic and Pfizer, ECB, Brexit and stimulusFundamentally, the latest week can hardly be called calm and easy. New pandemic records in the USA and the world, the start of vaccination in the UK, the approval of the Pfizer vaccine for emergency use in the USA, Brexit, the results of the ECB meeting and the EU summit, stimulus in Japan and the USA - this is not a complete list of everything that happened. Last week, the pandemic showed new records in the number of new: worldwide it exceeded 700K, and in the United States - approached to 250K. And there is no feeling that the trend will be broken in the foreseeable future. The New Year holidays are already close, and they will almost inevitably lead to an outbreak of a pandemic. As a result, the “stay at home” order came into force in California, that is, bars, museums, cinemas, etc. will be closed, travel is prohibited and in generally citizens should stay at home. California is the 5th largest economy in the world (!). Plus on weekned Germany decided to start a tough lockdown. It should be noted that the light at the end of the tunnel is getting closer. Great Britain at the start of last week began vaccination. The use of the Pfizer vaccine in a number of cases provoked an allergic reaction, which somewhat narrowed the range of its use. Despite this, at the end of the week the Pfizer vaccine was approved for emergency use in the United States. The main source of news buzz last week was the UK and the EU, namely their negotiations on a trade agreement. Johnson's dinner with Ursula von Layden on Wednesday didn't help. And the parties went all-in, stating that, apparently, there would be no deal. The ECB, as expected, left the rate unchanged, but at the same time expanded the quantitative easing program: PEPP was increased by 500 billion euros and extended until the end of March 2022. And the EU summit adopted a historic budget of 2.2 trillion dollars and a stimulus package of 750 billion euros. A stimulus package worth $ 708 billion was adopted in Japan. It was only in the United States where the Democrats failed to come to an agreement with the Republicans about the adoption of a relatively small stimulus package (relative to the wishes of the Democrats) of 900+ billion dollars. The coming week promises to be no less eventful. Meetings of the FED, as well as the Central Banks of England and Japan, the final chord of the Brexit epic, stimulus in the US, approval of the Modern vaccine. And we have not yet talked about the mass of macroeconomic statistics that will be published this week.
XETR:DAXShort
by Trade24Fx
2
Vaccine Approved, ECB and EU injections, jobless claimsYesterday again was quite eventful day. UK reported GDP and industrial production for October. On the whole, the data came out rather good and, in some indicators, even better than forecasts. But there were few people willing to buy the pound after the Brexit situation continued to hang in the air. Plus Johnson threatened markets with no-deal scenario. The ECB, as expected, left the rate unchanged, but at the same time expanded the quantitative easing program: PEPP was increased by 500 billion euros and extended until the end of March 2022. So, it is not surprising that the euro was doing relatively well. The same cannot be said about the dollar. The data on jobless claims came out much worse than expected and soared to the values of a month and a half ago, recalling that lockdowns have quite a material price for the economy. Oil prices rose rather unexpectedly yesterday. Unexpectedly, because after the growth of oil stocks in the United States by 15 million barrels, it would be logical to go down, not up. Partially this growth can be explained with the attack on an Iraqi oilfield. But the damage was so insignificant that this barely can be called a game-changer. S&P Dow Jones Indices said Thursday it will remove a total of 21 Chinese companies from its stock and bond indices. The epic continues with stimulus in the USA. Treasury Secretary Steven Mnuchin said Republicans and Democrats have made significant progress. But there is no final decision yet and negotiations will continue today. Europeans, in turn, reached a landmark budget agreement Thursday after weeks of fraught negotiations, unblocking $2.2 trillion in funds. The agreement paves the way for the EU to put into effect a 750 billion-euro ($909 billion) pandemic relief package that will be financed by joint debt. The main reason for the growth of optimism yesterday was the FDA's decision to approve the Pfizer vaccine for use in the United States. So next week, mass vaccination will begin in the United States.
TVC:USOILShort
by Trade24Fx
4
Johnson's Dinner, China Deflation, ECB and OilYesterday was rich in all sorts of events. The Bank of Canada decided to leave the monetary policy parameters unchanged (as expected). Boris Johnson flew to Brussels for dinner with the head of the European Commission in a last-ditch attempt to break the Brexit impasse. Dinner ended without agreement. But negotiations will continue. The current deadline is Sunday. According to the negotiators, it is at this time that the final decision should be made whether a deal can be reached or not. Meanwhile, Honda was forced to suspend production at a large plant in England due to delayed parts supplies. That is, the British industry is at risk of disruptions since January. Without a deal, British automakers could lose $ 62.4 billion over the next five years. Pandemic fronts were traditionally ambiguous. On the one hand, the pandemic does not even think about fading away, and in the United States, the medical system is on the verge of collapse. But on the other hand, the FDA is due to approve the Pfizer vaccine today, and China has reported 86% effectiveness of their vaccine. But even the vaccine news background was clouded yesterday by information that UK health regulators warned that allergy sufferers should not take the vaccine developed by Pfizer and BioNTech after two UK health workers showed an allergic reaction to the drug after being vaccinated in the beginning of the week. And more news from China. The Celestial Empire reported a sharp drop in inflation (at the end of November consumer prices declined by 0.5%). Given that the markets are expecting the Central Bank of China to roll back stimulus, the news was somewhat puzzling. But when an explanation was found in the form of a sharp decline in pork prices, everyone calmed down a little and decided that deflation was a temporary phenomenon and is not a sign of systemic problems in the Chinese economy. The oil market received mild shock therapy yesterday. Oil reserves in the United States, according to official data, increased by 15.19 million barrels. Once again, more than 15 million barrels (!). Despite the fact that analysts had expected a decline of 1.42 million barrels. The difference is definitely shocking and reminds of the fact that in conditions of lockdowns, the demand for oil tends to decline. In our opinion, yesterday's drop in oil prices is just the beginning. Today promises to be extremely busy - the ECB meeting, statistics on GDP and industrial production in the UK, consumer inflation and jobless claims in the US, the FDA approval of the Pfizer vaccine we already mentioned above, as well as news from the Brexit and US stimulus fields.
TVC:USOILShort
by Trade24Fx
Musk follows Burry's advice at the peak of the global bubble The fact of the day is $ 100 trillion. This is the capitalization of the world stock market. Is that a lot? If we use the world GDP as a comparison base, then a lot. The last time the capitalization of the global stock market exceeded global GDP was on the eve of the 2007-2009 crisis, which nearly buried the entire global financial system. Last week we wrote about Burry's advice for the "good guy" Elon Musk to sell Tesla shares while they are still being bought at current "ridiculous" prices. You will laugh, but yesterday Tesla announced its intention to sell its shares for $ 5 billion. We just wondering what else needs to happen for Tesla fans to finally face the facts. Britain, meanwhile, is ahead of the rest. This time on the issue of vaccination, which officially started yesterday. We will remind, the United States must give permission for the vaccine against Pfizer on Thursday and in theory will join the UK at the start of next week. The oil market, meanwhile, is no fun. We wrote yesterday that China's exports literally skyrocketed by 21%. But imports grew by a very modest 4.5%. To a large extent, such a weak result is due to a sharp drop in imports of energy resources. This, in turn, is due to the fact that at the beginning of the summer, China has filled its storage facilities with cheap oil and now uses this oil, saving up to $ 20 per barrel.
NASDAQ:TSLAShort
by Trade24Fx
4
Brexit, China exports, European data and CaliforniaFrom the point of the price dynamics in financial markets, Monday was remembered primarily by the pound moves. Paired with the US dollar, the decline reached 200 points. The reason is obvious - Brexit. Markets expected that over the weekend the last contradictions would be resolved and the parties would begin to sign a trade agreement. Instead, the UK and the EU have confirmed their differences. Nothing new, but the problem is that the EU leaders' summit on Thursday will be the last real chance to sign and ratify the agreement before the end of the year. This means that the situation is heating up to the limit. Meanwhile, China reported a sharp increase in exports (21%) in November and once again gave the markets a reason for optimistic thoughts about the future. Although, according to high-frequency data from Bloomberg, the situation in economies where full or partial lockdowns are currently in effect is rapidly deteriorating. Not surprisingly, California (the world's fifth largest economy by GDP) announced a stay-at-home order over the weekend. That is, bars, hairdressing salons, museums, cinemas, etc. will be closed. Retailers are allowed to remain open with a 20% load. Travel is prohibited. The order will be valid for at least three weeks. But the markets continue to think positively. The issue of stimulus in the US is moving towards a happy ending. And in Japan happy end has already been reached. Japan on Tuesday announced a new $ 708 billion economic stimulus package to accelerate the country's recovery from its deep recession caused by the coronavirus. In addition, this Thursday, the FDA will review the Emergency Use Authorization (EUA) for the Pfizer coronavirus vaccine candidate. Moderna vaccine candidate is scheduled on December 17.
Long
by Trade24Fx
Week in a Glance: OPEC +, NFP, Pandemic and stimulusThe past week turned out to be quite intense in fundamental terms. At the same time, the general trends and sentiments in the financial markets have not changed: the level of greed continues to go off scale, as generates excessive the demand for risky assets. The main event of the week, perhaps, can be considered the OPEC + meeting. Despite the preliminary negotiations, on Monday the OPEC + participants were not ready for constructive actions and the meeting was postponed until Thursday. The results are as follows: from January production will increase by 0.5 million b / d. Further actions will be agreed monthly. Is this a victory for the bulls? Well, the very fact that oil production will increase somehow does not look like a triumph of buyers. Let us also remind that the markets were expecting a decision to extend the current volume of production cuts by 3-6 months. And while things could have been worse (with a 1.9mn b / d increase in production since January 1), we think the OPEC + results is an excellent reason for oil sales. Another important event of the week was the publication of official statistics on the US labor market. Figures from ADP on Wednesday warned that NFP may well be worse than expected. And so it happened: the data turned out to be 2 times worse than forecasted and once again reminded that the pandemic has a completely material economic price. In this regard, we note that the past week again turned out to be a record one in terms of the number of new cases in the world and in the United States, in particular. Around the world, the numbers were close to 700K per day, and in the US - to 240K. Still markets have not been confused with these figures and, in general, sentiments have not changed so far. However, we believe that the markets have deviated too much from the normal, which means that a correction is just around the corner. So, we will continue to sell in the stock markets. At the same time, we do not exclude that this week the optimistic mood stays unchanged. In the US, there seems to be some progress on stimulus issue. And although the sum announced is 2 times less than the previous minimum figure for the Democrats, even $900 billion may be enough to keep the demand for risky assets going off scale. Plus news from vaccine manufacturers can help maintain the proper degree of optimism. After all, it is this week that the US FDA is due to approve the Pfizer vaccine.
TVC:USOILShort
by Trade24Fx
2
OPEC+ results, Burry vs Musk, NFP aheadThe long-suffering OPEC + meeting finally finished yesterday. As a reminder, according to the plan, it was supposed to end on Tuesday with a decision to extend the current volume of production cuts by 3-6 months. But in fact, after the failure of the first day, it was postponed to Thursday. The results are as follows: from January, production will increase by 0.5 mln b / d. Further actions will be agreed monthly. That is, the decision whether to increase production in February by another 0.5 million will be made at the OPEC + meeting in January. Despite some growth in oil, we consider the results of the OPEC + meeting at least inconsistent with the basic expectations of the markets, which means that sales are more than relevant. Among other events of the day yesterday, it is worth noting unexpectedly good figures for jobless claims in the USA. That is, they are still several times higher than the pre-pandemic levels, but the very fact of a certain positive trend in the current environment is surprising. Especially on the eve of the publication of official statistics on the US labor market today. Yesterday's data on PMI indices in the services sector in Europe confirmed the thesis, which we announced earlier this week: factories and plants this time were not closed, respectively, the manufacturing component suffered a little. But the service sector absorbed most damage from the restrictions (Spain, Italy, France, Germany, the Eurozone as a whole - all indices are below 50 or even 40). So the US labor market may well surprise and surprise unpleasantly. Yesterday we wrote about Musk's letter of despair. And the reaction of the financial markets predators has come. Michael Burry, best known for the Big Short, as the man who invented credit default swaps tweeted that he had become a seller in Tesla shares and advised Musk to issue additional shares while prices are so ridiculous, because then it might be too late.
TVC:USOILShort
by Trade24Fx
6
Vaccination in the UK, weak ADPs and wise Musk's fearThe main news yesterday were traditionally related to the pandemic and vaccines. And no less traditionally they were rather ambiguous. On the one hand, the UK is the first in the world to approve the Pfizer-BioNTech COVID-19 vaccine. Vaccinations will begin next week after the country receives 800,000 doses from Pfizer's manufacturing center in Belgium. The country has ordered enough doses of the vaccine to immunize 20 million of its 67 million population. As a reminder, the US FDA is due to meet on December 10 to discuss whether to recommend an emergency authorization for the Pfizer / BioNTech vaccine, and the European Medicines Agency said it could grant an emergency vaccine approval by December 29. Currently, 22.5 million doses of Pfizer vaccine and 18 million doses of Moderna vaccine will be produced in December 2020. But this pot of honey was not without tar. The pandemic in the world does not even think to fade away. More than 200K new cases of infection were recorded in the United States yesterday, the number of hospitalizations is breaking records and the medical system is on the verge of collapse. Yesterday's ADP data came out much worse than forecasted (307K against the forecasted 410K) and confirmed fears that the US economic recovery has slowed sharply after a new outbreak of the pandemic. Considering that the main US labor market data will be published tomorrow, the reason for pessimism is more than serious. It is highly likely that today's jobless claims data will confirm these concerns. From local news, it is worth noting Musk's half-panic letter to his employees, in which he warned that Tesla shares would be instantly crushed, like a soufflé under a sledgehammer, if they did not find ways to reduce costs. Essentially, Musk affirmed that Tesla's profitability was and remains an illusion that requires more and more efforts to maintain over time. Why is Musk panicking right now? If you look at what happens to Nikola shares (they lost about 50% in the last week) or Nio (in just three days, the scale of losses reached 30%), it becomes clear why it is now, because Tesla, by and large, is next in line.
NYSE:NIOShort
by Trade24Fx
2
OPEC + failure, OECD forecasts and ADP data aheadSo far, the main event of the week is the current failure of the OPEC + meeting. Instead of the expected decision to extend the current voluntary production cuts in the oil market for another 3-6 months, we have confusion. So far it has not been possible to agree on anything. The UAE insists on a fairly simple thought: what is the point of talking about some terms of the deal if the deal is still not respected. And it is clearly not easy to object to this reasonable question in the framework of OPEC +. But hope dies last and the solution to the problem has been postponed until Thursday. Otherwise, the world continued to live on dreams of vaccines, imagining how soon everything will return to normal. We have already noted that reality will at best begin to match current expectations in the third quarter of 2021. Because here and now, over half a million people in the world are infected every day, and most of Europe is shrouded in a network of full or partial lockdowns. All this cannot but harm the economy. As a result, yesterday the OECD updated its own forecasts for the pace of economic development in the world and noted that the resumption of the coronavirus pandemic has dramatically weakened the global economic recovery. Downgraded global growth forecast for 2021 to 4.2% from 5% in September. And according to the S&P Global, the shock due to the coronavirus will more than double the default rate of companies in the US and Europe over the next 9 months (for example, in Europe, the default rate will rise from 3.8% to 8.5%). But who is interested in the opinion of some OECD or S&P Global? It is much more interesting to show historical highs in the stock market or in cryptocurrencies. Nevertheless, we continue to live in a paradigm where objective reality is no less important than subjective perception, and therefore today we will monitor US employment data from ADP. Recall that the main block of statistics on the US labor market will be published on Friday. It is unlikely, but still it can remind dreamers of what the economy is in fact here and now.
TVC:USOILShort
by Trade24Fx
1
Moderna, BitCoin records, China, OPEC and IndiaFollowing Pfizer, another pharmaceutical company (Moderna) is filing for US vaccine registration. At the same time, the company noted that its vaccine is 100% effective in severe disease. United Airlines, meanwhile, transported the first shipment of Pfizer's Covid-19 vaccine from Brussels to Chicago O'Hare International Airport. Against the background of this information, buyers of cryptocurrencies and Bitcoin in particular experienced another heightened optimism. This resulted in new all-time highs for Bitcoin. Despite the apparent madness of what is happening in general, it fits into the general outline of the behavior of financial markets in recent times. China, as usual, added some optimism to the markets yesterday, when reported an increase in manufacturing activity in November, which became the ninth month of growth in a row. We are talking about the purchasing managers index in the manufacturing sector (PMI) for November (52.1 against the forecast of 51.5). India tried to return the optimists to the ground. Its economy at the end of the third quarter (GDP decreased by 7.5%) confidently entered the stage of a technical recession. On Monday, the UK and the European Union warned each other that time is running out for a Brexit trade deal. The funniest (or saddest) thing is that one of the key stumbling blocks - fishing - provided only 0.03% of the British economy in 2019. That is, Britain may fail the deal with the price of a trillion in trade turnover because of 0.03% of GDP. Since this is beyond common sense, we continue to believe that the sides will reach an agreement, which means that the pound will receive its injection of positive and a reason for growth, albeit short-term. The OPEC meeting was unsuccessful yesterday and should continue today. Although some reports have postponed the talks until Thursday, as key players continue to disagree on how much oil they should pump amid weak demand due to the coronavirus pandemic. Sources said that Russia has offered OPEC + to start increasing production by 0.5 million barrels per day every month since January. Obviously, against the background of such information, oil can only be sold.
TVC:USOILShort
by Trade24Fx
Week in a Glance: AstraZeneca, risky assets and NPP aheadLast week has traditionally started with the vaccine news. This time, AstraZeneca reported effectiveness of 70%, but for a half dose, that is, potentially by increasing the dose, it is possible to bring the effectiveness to 90% +. Why is AstraZeneca important? The fact is that this particular vaccine claims to be the most massive in the world. With a price of $ 4-5 per dose, as well as ease of distribution (you can store in an ordinary refrigerator), the AstraZeneca vaccine has the largest market capacity - about 4 billion doses worldwide. That is why the financial markets perceived the information from AstraZeneca very positively. As a result, a massive exodus from safe haven assets to risky assets began. Bitcoin almost reached 20K, Musk became the richest person on the planet after Bezos, stock markets rushed to new all-time highs, greed level reached 92 out of 100 (CNN's Fear and Greed Index). In our opinion, markets have traditionally passed off wishful thinking and tomorrow (which may not exist) as today. After some skepticism about the results from AstraZeneca surfaced, the company announced additional global testing. In general, it is worth recalling that the massive use of vaccines will not begin until the third quarter of 2021, which means that, given the planned seasonality of the pandemic, you should not expect a radical solution to the problem before summer. So, the last week's gain is extremely unstable. Actually, losses in the cryptocurrency market on Thursday from 15% to 30% for various tokens confirm this. That is why our position is unchanged: we sell risky assets, as well as oil, and buy gold. The coming week may be decisive for the oil market. OPEC + meets on Monday-Tuesday. Markets have already fully incorporated into the current price the fact that from January the voluntary production cuts will not change and instead of the planned 5.8 mln b/d it will remain at 7.7 mln b/d. The point is that the fact is not yet there. In addition, statistics on the US labor market will be published at the end of the week. Given that November turned out to be an exceptionally pandemic month, there is every reason to expect weak data, which may remind financial markets that the present is not as cloudless as it seems to them.
TVC:USOILShort
by Trade24Fx
Thanksgiving Day in the cryptocurrency marketIn yesterday's review, we warned that a thin market in the face of a significant number of bubbles in financial markets could provoke spikes in volatility or even flash crashes. If you look at the results of Thursday for the cryptocurrency market, it seems that we were not so far from the truth. Ripple lost about 25% (!) during a day, Bitcoin and Ether about 15%. And while other bubbles are still with us, ranging from Tesla and Nio to the US stock market in general, it is quite possible that the markets are starting to feel shortage of "fools" with all the ensuing bubbles. Among other news, it is worth noting the extension of restrictive measures by Germany until December 20 against the background of a record number of cases, which exceeded 30K per day. Germany did not tighten the measures, but the experience of the same France shows that with a sufficient level of severity it takes only 3 weeks to take the situation under control. Consumer confidence, meanwhile, is declining in both France and Germany. Exxon Moblie is gearing up for tough times. They revised their own estimates of oil prices in the next decades by 11% -17%. The company expects the damage from the pandemic to persist for much of the next decade. Britain and the EU continue to negotiate a trade agreement. So far, traditionally, it has been unsuccessful, exchanging mutual threats. European Commission President Ursula von der Leyen said Thursday that the EU is ready for the possibility of Britain leaving the bloc without a new trade agreement. Britain in turn said that they did not need a deal "at any cost". Nevertheless, according to the participants in the negotiation process, its end is close. According to one information about the success of the negotiations will be announced at the weekend, according to the other - next week. Let us recall our trading plan for this case. We wait for positive news, being long in the pound, after that we wait 1 or 2 days to work out the news, fix the profit on the long position and simultaneously open the short one.
NYSE:NIOShort
by Trade24Fx
ECB, US data and Thanksgiving DayToday is a holiday in the United States (Thanksgiving Day). So, the markets will be “thin”. Low liquidity is a great opportunity for those looking to crash the market. Moreover, there is something to collapse: from the cryptocurrency market bubble to the US stock market. And in this case, even a formal reason for the start of the movement is not needed. Just a light kick on days like this is enough to trigger the flash crash mechanisms. The ECB tried to remind markets yesterday that the reality is not as joyful and cloudless as it seems this week. The Central Bank of Europe has warned that European banks may face a wave of defaults on loans, and in order to somehow protect themselves from this, banks are advised to increase reserves. In addition, the ECB said that the some assets may collapse at any moment. Yesterday's data from the US (which had a double doze due to the weekend today) also tried to bring the markets back to the ground. Primary unemployment benefits came out much worse than forecasted and higher than the previous value. That is, the outbreak of a pandemic in the United States, despite the absence of a full-fledged lockdown, does not go unnoticed for the economy. US GDP for the third quarter was left unchanged. France, meanwhile, said it would start collecting a tax on digital services. So digital giants like Amazon, Facebook and others can get their wallets ready. According to official data, oil stocks in the United States decreased by 0.75 million, which, due to the insignificance of the number, should not be interpreted as a signal of a deficite in the oil market. The fate of the oil itself, apparently, will be decided at the OPEC + meeting November 30 - December 1.
FOREXCOM:XAUUSDLong
by Trade24Fx
Bubbles are growing, Musk is richer than GatesThe start of the week was again marked by a sharp jump in the level of greed in the financial markets. Just take a look at the CNN Fear and Greed Index to be convinced (the index is in “extreme greed” zone). Naturally, this provoked a massive exodus from safe-haven assets (gold alone lost over $ 75 per ounce in a couple of days). Well, if it has disappeared somewhere, it must arrive somewhere. The markets do not even try to be selective, to give preference to relatively undervalued assets. On the contrary, the most overvalued and overbought assets are bought. Bitcoin approached 20K, Tesla - 550 (as a result, Musk overtook Bill Gates and became the second richest man in the world). And nobody worries that even less than a year ago, they did not give 4K for the same Bitcoin, and $ 75 for Tesla (price adjusted for the August split). In general, there is nothing criminal about the rise in asset prices. But what has changed in the world of cryptocurrencies? Were they allowed everywhere, and became full-fledged and commonly recognized payment instruments? Or maybe Bitcoin was introduced as a payment instrument in Google or Facebook? Maybe Testa has increased production tenfold and become a world leader in car production? The answers are too obvious to be voiced. But the saddest thing is that no one asks these questions. People buy assets simply on the basis of the principle: growth was yesterday and it will be today and it does not matter why it happens, the main thing is: it happens. The outcome of this approach is obvious. It has been clear since the 17th century, when the Dutch were no less active in buying tulip onions than Bitcoin is now. But nowadays very few people study history. In the US, meanwhile, Trump, though reluctant, admits defeat and prepares to leave the White House. Biden continues to form his team. The appointment of former Fed chief Jannette Yellen as Treasury Secretary seems like a good idea. Today a large set of statistics from the US will be published. The fact is that tomorrow in the States the official holiday (Thanksgiving Day). So, the data is published for two days at once. It includes revised figures for the US GDP, as well as data on durable goods orders and jobless claims, personal income and new home sales.
Short
by Trade24Fx
2
Another Groundhog Monday, JPMorgan Chase predicts collapseFor the last three weeks on Mondays, we've seen variations of the same thing. Two weeks ago on Monday, Pfizer announced 90% + effectiveness of its vaccine. Moderna said last week on Monday that their vaccine is 94.5% effective. And yesterday the British AstraZeneca made its contribution to the Monday vaccine race news. Their vaccine, however, turned out to be weaker - just over 70%. But on the other hand, you can add to the dose and increase the effect. Plus, the vaccine from the British is much cheaper and as simple as possible in terms of storage and transportation (it can be stored in usual refrigerator). If the Pfizer vaccine costs forty dollars (for two doses needed for the effect), then an injection from AstraZeneca will cost 4-5 dollars. As usual, the markets reacted extremely positively to this information: safe-haven assets were losing value (dollar, gold, yen fell in price, and the yield on US Treasury bonds grew). If you believe the analogies, then today the attention of the markets will switch to numbers for sick and lockdowns, and we will see reverse price processes. For example, Canada's largest city, Toronto, with a population of 3 million, is in lockdown for 28 days. Moreover, the latest data on business activity in the Eurozone (for November) drop below 50, that is, business activity in the service sector is declining (for the first time in the last 5 months). Against this backdrop, France and the UK announced a gradual easing of restrictions because of significant progress in the fight against the pandemic. JPMorgan Chase predicts a local collapse of the global stock market. They base their predictions on simple calculations: traditional investment funds tend to maintain a 60 to 40 distribution between stocks and bonds in their portfolios. But due to the sharp rise in stock prices, the proportion has been distorted recently and stocks dominate. If, by the end of the year, investment funds decide to return to the basic ratio of 60 to 40, they will have to sell off shares for about 300 billion. It is unlikely that the market will be able to “eat” such a volume without consequences. There was a local turmoil on the oil market yesterday related to the information of a military strike by Yemeni Houthi rebels on an oil storage and distribution center in Saudi Arabia. And although the information has not yet been officially confirmed, all this is very similar to the events of a year ago, albeit on a much smaller scale.
DJ:DJIShort
by Trade24Fx
Week in a Glance: between vaccines and lockdownsIn the last couple of weeks, the markets have been torn between two topics: news from the vaccine race and the epidemiological situation in the world and the United States. Moderna said its vaccine is 94.5% effective, and final test results for the COVID-19 vaccine developed by Pfizer Inc. showed it is 95% effective. At the same time, the FDA (US regulator) will consider the issue of the Pfizer vaccine for emergency use on December 10. Recall in this light that Pfizer's revenues from vaccine sales in 2021 may grow by $ 10+ billion, so the company's shares are a good candidate for purchases. Despite such a clear positive, stock markets were unable to continue their growth. The fact is that it will take months before the large-scale vaccination begins. In addition, the current situation with the pandemic in the world and in the United States, in particular, is extremely threatening. Over the past two weeks, the number of hospitalizations due to COVID-19 in the United States jumped by almost 50% and reached a record value of about 80,000. Against this background, local authorities continued to tighten measures to restrict social activity. So, this week we will continue to look for sell opportunities in the US stock market. An interesting event of the past week was the decision of the Central Bank of Turkey to raise the rate at once by 4.75%. Now it has reached 15%, which can naturally lead to the formation of a carry trade in pairs with the Turkish Lira. It makes sense to think about mid-term purchases of Turkish Lira. Another news of the week was the information that Tesla will join the S&P 500 on December 21. Quite naturally ($ 11.2 trillion Index funds would have to include Tesla shares in their portfolios) Tesla shares jumped, keep on blowing an already huge price bubble. Given that at the end of the week the question of stimulus in the US resurrected again, and the UK and the EU were again unable to complete negotiations (this time due to the coronavirus disease of one of the EU negotiating group members), stimulus in the US and Brexit that could become top topics of the current week.
DJ:DJIShort
by Trade24Fx
Surprise from Turkey, carry trade and pandemic chroniclesPerhaps the main event of yesterday was the rate hike by the Turkish Central Bank. This is not the key Central Bank of the world. However, it is not typical that the Central Bank from a G20 raises the rate by 475 (!) basis points. As a result, the rate became 15% and this is already more than a serious reason for the emergence of a carry trade in pairs with the Turkish lira. And if Turkey does not scare away investors, then the lira has every chance of forming an upward trend in the foreseeable future. Especially when you consider that China this week placed government securities at a negative rate. This has never happened before for emerging markets to be placed in the minus. 2020 has once again confirmed its uniqueness. So, Turkey looks like an even stronger contrast against this background. Considering that there is too much money now (just take a look at the bubbles in the stock markets, the US housing market, and the cryptocurrency market), the temptation to get instead of minus 0.15% plus 15% might be too great to resist. But in general, the pandemic continues to attract the attention of the markets. Optimists are watching the vaccine race (the AstraZeneca Plc vaccine has sparked strong immune responses in the elderly, and Moderna Inc. begins production of its vaccine in Europe later this month). Pessimists - for the news of lockdowns and figures on the number of cases, hospitalized and deaths. The number of hospitalizations due to Covid-19 in the United States is record in 28 states. California has declared a curfew. At the same time, schools were closed in New York, and New York subway is operating at 25% of its capacity and is going to be reduced by 9,000 people, which will lead to a reduction in transit services by 40-50%. Yesterday's data on jobless claims in the US came out rather mixed. Continuous claims are still decreasing, but the initial ones stopped the positive trend and began to grow. In general, these data don't seem like a reason for joy.
Short
by Trade24Fx