FXTM information and reviews
IronFX information and reviews
Libertex information and reviews
FXCC information and reviews
Markets.com information and reviews
FxPro information and reviews
42 567.79

Wall Street: Unleash the stimulus

24 July 2020

Asian stocks are emulating the overnight declines on Wall Street, led by the drop in the US tech sector despite better-than-expected earnings from the likes of Tesla and Microsoft. US futures are edging higher at the time of writing.

The ND100m has seen a technical pullback, after its 14-day relative strength index earlier this week reached the 70 mark, which denotes overbought levels. Should the upward trendline since March hold true to its role as a support line, the Nasdaq Composite Index should be able to eventually close above the psychologically-important 11,000 mark, provided the market exuberance from recent months can stay intact. However, with momentum indicators starting to wane, US equities could do with a fundamental reason to push higher, seeing as how the Dow has struggled to better its June 8 high.

Such a boost may arrive early next week, with Senate Republicans set to unveil its proposal for a US$1 trillion stimulus plan. Although markets have been pricing in the prospects of more US fiscal stimulus, its official passage could still boost riskier assets, as was the case earlier this week with the EU recovery fund.

The world’s largest economy is in need of more support, a call amplified by yesterday’s unexpected rise in initial US jobless claims, while billions of dollars of unemployment insurance are set to expire next week. Further signs of dithering in Washington would test investors’ patience, potentially prompting market participants to take some more risk off the table while the political brinksmanship threatens to dampen the US economic recovery.

Gold bulls in 7th heaven

Gold is set to notch its seventh consecutive weekly advance, extending its climb after seven straight quarters of gains. At the time of writing, spot Gold is trading around a new nine-year high, having added over four percent this week, which would be its highest weekly gain since April. The precious metal is now less than $50 away from its existing record high of $1921.17 mark posted on September 6, 2011.

At this pace, setting a new all-time high seems like a foregone conclusion. After all, we are now in a tremendously supportive environment for Bullion, a narrative not lost on investors as ETFs raise their holdings of the precious metal by record amounts.

The biggest driver for Gold’s rally this week has been real yields pushing deeper into negative territory in US Treasury markets, making the precious metal that much more appealing despite it being a non-yielding asset. The weakening US Dollar paved the way for Gold to realize more of its upside. Bullion bulls were also given added impetus amid a resurgence of geopolitical tensions this week, while concerns over the global economic recovery refuse to go quietly into the night.

Gold clearly stands out among its safe haven peers because of its historical role as a store of wealth and a hedge against waning purchasing power, which lend themselves well to its potential for further gains going into 2021.

From a technical perspective however, with spot Gold having ventured into overbought territory, don’t be surprised if we see a technical pullback over the near-term. Still, any such declines could prove to be nothing more than mere footnotes in Gold’s relentless climb to historic highs.



Stocks bounce back after Evergrande panic
Stocks bounce back after Evergrande panic

As investors increasingly liken the Evergrande crisis with the collapse of the Lehman Brothers in 2008, they remain in the dark about the Chinese government's intentions...

21 Sep 2021

Oil Was Put on Hold
Oil Was Put on Hold

The oil price is falling after rallying before. Early in another September week, Brent is trading at $74.50 and has a lot of room to correct. The strong greenback...

20 Sep 2021

Dollar starts Fed week on front foot, stocks hit by Evergrande fallout
Dollar starts Fed week on front foot, stocks hit by Evergrande fallout

Fears of global contagion from the worsening crisis in China's property sector continued to weigh heavily on sentiment at the start of trading on Monday as markets...

20 Sep 2021

Dollar jumps, gold slumps, stocks nervous
Dollar jumps, gold slumps, stocks nervous

Worries that the US consumer is rolling over were dealt a major blow yesterday after the nation’s retail sales for August overpowered some gloomy forecasts. The retail sales...

17 Sep 2021

Energy is the play: how we get to $100 crude
Energy is the play: how we get to $100 crude

Natural gas futures in Europe and the UK are flying, while our natural gas (NG) CFD (the underlying is traded on the NYMEX) pushed over $5.60 and into 7-year highs...

16 Sep 2021

Are investors sleeping on systematic risk in China?
Are investors sleeping on systematic risk in China?

It’s time to talk about China. The situation is getting dicier as the nation’s second-largest property developer - Evergrande - is on the verge of default. Trading in the company...

16 Sep 2021

Forex Forecasts

OctaFX information and reviews
HotForex information and reviews
XM information and reviews
FXCM information and reviews
Vantage FX information and reviews
Vantage FX
Moneta Markets information and reviews
Moneta Markets

© 2006-2021 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.