This is what the market will likely focus on over the weekend - is the climb rate in China topping or not.
From nytimes and other news agencies in the past 12 hours:
In a daily update on its website, China’s National Health Commission reported 126 new infections in Hubei on Friday, but for the first time all of them were in Wuhan, the city of 11 million where the virus is thought to have originated. In total, the country reported 143 new cases on Friday, a sign that Wuhan appears to be the only obvious hot spot of new infections in China.
Bottom line -does the market believe the numbers or will the fear factor prevail?
Jury out, if the numbers were not Chinese based there would be no question, but rules are being changed as we type.
Maybe not today, but over the next days, weeks and months, the possibility has to exist that the index underlying the futures can indeed go lower.
Yes I think so. The world economies were on tender hooks before the outbreak. There was a trade war that slowed economies a little. The trade war pales in comparison to what the pandemic has brought about financially. Ask yourself if you are willing to travel anywhere overseas on holiday, then extrapolate this to the rest of the world and compute the impact just on the travel industry. Would you go out and buy a new home this year are would you wait? Would you buy an investment property? Would a company manufacturing components for motor vehicles invest in a new £/$ 500 000 robot or hiring new staff ro would they wait? The list goes on and on. I think this is the beginning of very big problems.
The bond rates point to the belief that the market has that the US Fed has to cut rates more this year to stimulate the economy, due to pandemic inflicted economic crises.
The total infections outside China as of yesterday was around 29100. Extrapolating this by the current growth of infection rate at 20% per day means we can expect 72500 infections outside of China by this Friday (13/3/20) and by just under 200 000 by the end of the month. What will the markets be going up under these circumstances? Logic says no.
When the last financial crises came along, Governments all came together to work out a global plan. They worked together. Can you imagine the current bunch world leaders working together for the greater good? I doubt it.
Under these circumstances of fear my thinking is that over the long term, the fear currencies, Yen and CHF are good bets, as well as shorting market indexes and stocks, even the Euro seems like a good currency. The bond rates should be pointing the way, remember the trend is your friend.
I requires all the leaders at the very top to work together and disseminate a plan and push that down the chain of command in a coordinated way. A quick duckduckgo search revealed these 3 articles which show how the world leaders united around the crises in 2008:
I know not all will like the guardian as a source, they were just the top results that came up. However, it does show that the world leaders as well as relevant central banking authorities worked together. Central banks have limited remits, there are things the central banks cannot do that world leaders and the support political infrastructure can do, such as cutting or raising taxes, cutting tariffs, releasing government spending to stimulate economies or tackle health issues and so forth. Central banks can’t spend money on fighting health issues.
Compared to 2008 we aren’t seeing anything of the sort.
I fear yes. I’m not super knowledgeable about the workings of the interbank lending system, but all the talking heads on TV seem super worried, and say only a Fed and Administration announcement, very soon, can calm the markets.
So it is. It’s almost a wonder some can really do business. Automotives trade flat. Volkswagen finds support at 127.500, while Ferrari faces resistance at 135.000. Check them out!
XAUUSD is still gaining value by market fears although many traders realized their profits over the last two days whereas today stock market rebounds dropping XAUUSD prices lower.
Volkwagen makes cars that people need to buy to move around. Of course they can do business. The value of the car makers falling has nothing to do with their ability to do business in general.
Another quote that is completely contradictory. There is a trend line straight up and you are saying gold is dragged lower? Although the topic is roughly on what is being discussed it seems clear you are just trying to redirect people to your site with advertising.
The bad news for AAATrade is that you are making them look bad. This is further compounded by the poor quality of the information from the links that you have provided lead to. The links are near useless and no-one needs to follow them.
Based on your posts and the very poor quality of the arguments, I would never go near your company with my money. On top of this, when I investigated your fee structure I can warn anyone reading this post that you have heavy fees on deposits and withdrawals compared to other brokers I use.
I would advise you to very carefully think about posting further advertising links on my posts as I may pick apart the posts more deeply and find further issues with your company. I may even contact your company directly and explain how your attempts at advertising are doing them more damage than good.
I am happy though for genuine discussions from genuine traders and brokers who do know what they are talking about, and thank everyone else for their valued inputs.
What I actually meant was that despite the economic uncertainty dominating the markets, automotive stocks perform better than others yet lower than they did before the Coronavirus outbreak.
Please allow me to clarify by saying that the chart covers a longer period of time while the web link points to a 1-day period showing a downtrend. However, I did not add it for advertising purposes but for info, should anyone be interested to find out more. As far as investing is concerned, that is a matter of choice and we do not wish to influence anyone in any way.
Ok so this one has developed. Notice the extra 1.5 Trillion the Fed injected… it wasn’t to stem the stock market falls, it was for this:
This is truly shocking. Now we can see there are major problems. They might not even be able to price US treasuries correctly. This harks back to some similarish problems back in the 1987 crash, but far more severe.
3 weeks on… the JPY is at its strongest… and Gold, one of the other safe havens in times of crisis… which was strongly liquidated on Friday (13th Mar), maybe starting to indicate that this “correction” is something more sinister for long term sentiment.
You have to remember that Gold is multi-functional - is a commodity, a precious metal (risk) and then often viewed as an alternative currency especially to USD.
Friday USD was bought - Gold sold (currency) / Bonds sold, Yen sold and Gold sold (risk) / and CRB down on Friday close (commodity)
There are days and periods that either one of these can come to the fore - e.g. Chinese New Year etc.
