Could Friday 13th actually be a HAPPY Friday? Our analysts are saying that after a difficult week for markets, they’re seeing some calm and respite today.
Q4 2019 hedge fund letters, conferences and more
David Einhorn's Greenlight Capital returned -2.9% in the second quarter of 2021 compared to 8.5% for the S&P 500. According to a copy of the fund's letter, which ValueWalk has reviewed, longs contributed 5.2% in the quarter while short positions detracted 4.6%. Q2 2021 hedge fund letters, conferences and more Macro positions detracted 3.3% from Read More
Will Markets Stay Calm On Friday 13th?
Colin Williams, Senior analyst at International Investment firm, EXANTE, says;
Stock markets fell across the world on the worst day since 1987 as coronavirus pandemic fears really hit home.
The Dow was down 2350 points to 21,200.
The dollar rallied hard as investors rushed to ‘safe haven assets’. Swap spreads blew out, CDSs blew out, there was clearly a dollar shortage and financial stress everywhere.
Lagarde at the ECB actually made things worse by offering little and saying it wasn’t the ECB’s job to close spreads between members. She later tried to back peddle.
The day culminated in an unprecedented announcement by the Fed of a massive $1.5T repo operation, to happen in three tranches.
The Fed meets next week and we think they will just go straight to zero!
There is some respite this morning as traders and brokers are exhausted.
It’s Friday 13th so let’s pray for calm.
Coronavirus's Impact On Global Supply Chains
Vitaliy Kin, Senior Analyst at EXANTE say;
Coronavirus has spread to over a hundred countries of the world and is still growing, With no indication that we have reached the worst! Even though western media praised the Hong Kong and Taiwan citizens who are working together in anti-virus action, they are not following most countries and wearing masks. They just request people to wash hands frequently to fight against the respiratory disease, therefore it still will grow further. The markets expect that the Federal Reserve will cut interest rate for 0.75-1.00% next week and will cut further in April to zero, then comes the QE policy.
Trump wishes to combat this by lowering tax bail to zero, he went to the Congress with other bailouts but they still need to be negotiated. The outbreak of Coronavirus in North America is just in the beginning and may take several weeks to reach the climax. When the supply chain of the west is hurt, China will receive a second blow in its supply chain.
Bank of England called for a special meeting and had rate cut of 0.5% on Wednesday. Wuhan Coronavirus in the UK is just 459 infects, not so many, at least out of top 10,but the anti-virus concept is not so strong as citizens of HK, Macau and Taiwan, so the outbreak will continue and expand further, also in USA. Government anti-virus policies are pressing from the top, citizen concepts are generating from inner heart, making them more effective!
US stocks are falling with a pace of one thousand per day, don’t worry, they will keep on falling for several weeks, technically it would not come to zero point. Market will not close like that. However USD index had been falling over the past 10 days, when it rebounds, futures will go down. The oil price fall also brought down gold price. This morning short term indicators of gold went down, but the upward wave started in November is still in upward trend.