FXTM information and reviews
OctaFX information and reviews
XM information and reviews
FXCC information and reviews
Libertex information and reviews
HFM information and reviews

Stock gains could be temporary

25 September 2020

Asian stocks and currencies are enjoying some relief before the end the trading week, taking their cues from Wall Street’s advances on Thursday. US and European equity futures are pointing to gains at their respective opens, while the Dollar’s hold of the 94.0 handle is keeping Gold prices subdued below the $1900 line.

Equity bulls may be drawing comfort from reports that House Democrats are drafting a US$2.4 trillion stimulus plan, while Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi have hinted their respective willingness to return to the negotiating table. While such signals are translating into a slight lift for risk assets for the time being, this upward pressure may prove fleeting.

At this juncture, it still appears unlikely that the next round of US fiscal stimulus would be passed before the elections, despite the Fed’s exhortations that the government has to do more to help the US economy get back on its feet. The absence of more support for the US economy would drastically disrupt its recovery momentum, especially in the next quarter; a risk that global investors are certainly aware of.

Overall, risk sentiment is still raw after investors had to bear witness to the steep declines in US equities this month, as benchmark indices are set to post their first monthly loss since March. Although the VIX index appears relatively tamed compared to the spike earlier in the month, market participants must remain vigilant and brace for potentially more volatility triggers over the near-term.

In the week ahead, market volatility may be fed via the political channel, as President Donald Trump and Democratic challenger Joe Biden engage each other in the upcoming US presidential debate. With just over five weeks until the elections, market participants are going to be increasingly politically-sensitive in the lead up to what is shaping up to be one of the most fraught battles for the White House.

And the spectre of political uncertainty may not end immediately after polling day. The fact that Republicans even had to vow to uphold a peaceful transition, should they lose the November vote, indicates that the risk of a delayed elections outcome is weighing heavily on the minds of investors. This suggests that significant gains for risk assets may not be assured until such a scenario is no longer a threat, leaving the tendency to book profits and pare down risk exposure as a potentially attractive proposition in the interim.


Share: Tweet this or Share on Facebook


Citigroup heading for UAE
Citigroup heading for UAE

One of the largest and most famous banks in the world is Citigroup, headquartered in New York City… at least, for now. There have been some employee movements...

6 Dec 2022

XAU/USD upside appears more compelling ahead of US NFP
XAU/USD upside appears more compelling ahead of US NFP

Gold price consolidates recent gains around four-month high after crossing the key resistances. Cautious mood, US Dollar rebound allows XAU/USD bulls to take a breather...

2 Dec 2022

Oil’s correction in rumors about further production cuts by OPEC
Oil’s correction in rumors about further production cuts by OPEC

The price of Crude oil resumed the downward movement after failing to cross above the daily trendline which was valid since late June.The price only rebounded to the upside...

1 Dec 2022

The Downfall of Euro in 2022: the Analysis of its Reasons, the Current Situation, and the Objective Forecast
The Downfall of Euro in 2022: the Analysis of its Reasons, the Current Situation, and the Objective Forecast

Before getting down to analyzing why Euro reminds of a mafia victim in cement shoes falling off a Chicago bridge, allow us to open it up with a meme joke that best describes this whole ordeal...

30 Nov 2022

Is Boeing stock about to take off?
Is Boeing stock about to take off?

Boeing stock (BA) has been in free fall since March 2021, from $269 (USD) dropping to $121 at the end of September 2022. And then came a reversal, raising prices to over $175...

29 Nov 2022

Why is western media so positive about the Chinese stock market?
Why is western media so positive about the Chinese stock market?

Premium news sites in the US and Europe are now saying that everything is suddenly going right for China’s stock market. Headlines announced Hong Kong stocks...

28 Nov 2022

Editors' Picks

FXCM information and reviews
ActivTrades information and reviews
RoboForex information and reviews
MultiBank Group information and reviews
MultiBank Group
FxPro information and reviews
Vantage information and reviews

© 2006-2022 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.