How Long Will It Take To Determine the Next President? The Answer Will Impact the Market

One Option Trading Blog https://ift.tt/3mH1bTR Posted 9:00 AM ET - Last week the market had nervous jitters ahead of the election and the S&P 500 closed below the 100-day moving average. New Coronavirus cases are spiking domestically and internationally and election results might not be known for weeks. These two issues will weigh on the market and a buying opportunity will surface when we have election clarity. Much of Europe is in a complete shutdown and many states in the US are considering similar as the number of new cases spikes. This will impede the economic recovery and the Q3 earnings are expected to decline 20% …

Dances inspired by life in 2020, from the “Can I Get Six Feet, Please” to the “I Miss Obama."

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Dances inspired by life in 2020, from the “Can I Get Six Feet, Please” to the “I Miss Obama."

↩︎ The New Yorker

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Crude Oil Under Pressure on New European Lockdowns

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The coronavirus second wave of infections brought Europe to its knees. Shortly after it recovered somehow from the initial lockdowns, most European countries announced new restrictions.

Although the new lockdown measures are not so severe as in the spring, they will take their toll on economic activity. Inevitably, the new measures translate into lower oil demand and, as a consequence, lower oil prices.

The price of oil did not wait much to react – it lost 20% of its value in less than two weeks. Now that the United Kingdom announced a one-month long lockdown starting with next Thursday, further pressure will likely mount on the price of oil.

Crude Oil and Petroleum Products an Important Part of the 2040 Energy Mix

As the pandemic hit the world’s economies, it affected crude oil prices too. However, crude oil and petroleum products remain an important part of today’s energy mix and also for the next decades.

According to an analysis by Chevron, the natural gas’ size in the energy mix remains unchanged in the decades to come. The big changes appear in the coal share (declining) and renewables (increasing). Oil and oil-related products, while declining as well, will still account for a big chunk of the energy mix.

The current economic conditions put pressure on the price of oil. Mobility shrank, industries were shut, and now countries are shut down again. Inevitably, exogenous shocks like the pandemic will continue to depress the price of oil.

However, on the medium to long term, the price of oil will likely recover from any future dips generated by the pandemic. Despite the European economies suffering from the second wave of the pandemic, Chinese oil demand is doing fine. In fact, China shows growth.

Moreover, Australia reported its first day without a single COVID-19 infection over the weekend. Other economies in the region also coped better with the pandemic when compared to Europe or the United States.

Therefore, a strong recovery in Asia, followed by a gradual one in Europe and the United States warrant somehow stable oil prices around the $50 level for the years ahead.

All in all, oil and oil-related products continue to have a tremendous role in people’s day-to-day lives. Greener efforts from developed governments are welcomed, but their programs’ implementation takes time. In the meantime, the demand for oil can only go up in the short to medium term.

The post Crude Oil Under Pressure on New European Lockdowns appeared first on Vantage Point Trading.

The Tech Sector Continues to Outperform

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Last week the big tech companies in the United States reported their earnings. Unsurprisingly, all companies that did so also beat expectations by a mile. 

Apple, Google, Facebook, Microsoft, or Amazon, each company managed to report better than expected results on the back of strong demand for tech products. The coronavirus pandemic created a shift in consumer behavior but also a shift in the way people work.

The new lockdown measures announced in Europe will further improve the results for these tech giants with global operations. As such, the pressure on the Nasdaq 100 index, the one that fully reflects the tech sector in the United States, will likely remain to the upside, providing no exogenous shocks appear in the meantime.

Top Performers in the U.S. Tech Sector

Amazon leads the pack with an increase of over 35% in revenue in the first months of 2020 when compared to a similar period in 2019. A double-digit increase is already considered outstanding, and Amazon surpassed it easily. Last week the company also reported that it employed hundreds of thousands of people during the pandemic as it expanded its operations due to increasing demand for its shipping services.

Facebook comes in second place, posting a 17% increase in revenues over the same periods. More precisely, half of Amazon’s growth. As people were forced to spend more time indoors, they consumed more online products and services. Facebook benefited from increased traffic but also from an increased number of active users.

Microsoft comes in a close third place as the U.S. giant helped remote workers equip a new home office. It sold more hardware and software when compared to the first nine months of 2019, and its cloud services, Microsoft Azure, continues to expand at an incredible CAGR rate.

Alphabet and Apple managed only single-digit growth, but nevertheless, the two companies increased their revenues too.

The Nasdaq 100 index is the first index in the United States that managed to put a new all-time high during the pandemic, fueling the stock market recovery. At this point in the pandemic, the tech companies continue to benefit from it. Online products and services will likely remain in strong demand in the period ahead. As such, any dip in the aftermath of the U.S. elections might be perceived by market participants as just another opportunity to go long.

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PrimeXBT’s Kim Chua Claims Stocks Are “Consolidating” For “Post-Election All-Time Highs”

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“Profit-taking” in the stock market ahead of the election is just that, according to PrimeXBT analyst Kim Chua, who expects major stock indices to head for new all-time highs “post-election.”

The current chop across the market is merely “consolidation,” according to Chua, who warns the uncertainty heading into Q4 is designed to shake traders out of position ahead of a stimulus bill ultimately being passed that reinvigorates markets after the dust settles on the US election.

Read about this and more of Chua’s thoughts about the stock market below.

Expect New All-Time Highs Post-Election, The Time To Worry Is In Early 2021

Corporate earnings have surprised analysts and beaten expectations in the face of the pandemic, and with more stimulus coming, Chua thinks that “the market is consolidating ahead of the upcoming election.”

“Post-election, the stimulus bill will eventually be passed, and positive earnings will likely propel the stock market to new all-time highs again,” Chua continued. She fears the market’s response to a second-wave of COVID less than the rhetoric towards China as that directly affects US businesses.

When Stimulus Euphoria Wears, Stock Indices Will Struggle

She further explains that in Q3, economies were rebounding, and witnessing revenge-buying consumer behavior, combined with COVID relief aid, the stock market is safe for the time being. But in early 2021, when the “euphoria of the second stimulus package” has worn off, that’s when it is time to become worried about the stock market finally.

Chua says that in 2021, the stock market will “struggle to find reasons for going up.” But not before one more post-election push to new all-time highs.

In the first month of Q4, Dow Jones index trading pushed 2500 points lower than the October monthly high, kicking off the quarter on a negative note after a surprisingly positive Q3. Lingering effects from the first stimulus and the expectations of a second-round were enough to keep major stock indices thriving, until now.

Get Ready For Any Impending Stock Market Trickery With PrimeXBT

The lack of a second stimulus approval before the election has left market participants skeptical and have started to de-risk. Investor sentiment also has increasingly turned toward expecting a top in the stock market and another Black Thursday like collapse. However, the negative sentiment could work to the contrary and prompt a perfect environment for a short squeeze and push to all-time highs, as Chua suggests.

Whichever way markets turn, PrimeXBT has traders covered with CFDs on all major stock indices, including the Dow Jones, S&P 500, Nasdaq, FTSE, DAX, and several more. The award-winning trading platform also provides long and short positions on forex currencies, gold and oil trading, along with cryptocurrencies like Bitcoin, Ethereum, and more, all under one roof and available via a free mobile app for Android and iPhone.

The post PrimeXBT’s Kim Chua Claims Stocks Are “Consolidating” For “Post-Election All-Time Highs” appeared first on Vantage Point Trading.

HKEX to clear SOFR cross-currency swaps from early 2021

Home https://ift.tt/3kPX6fp Legacy Libor cross-currency swaps could move to SOFR discounting at the same time

Silver Futures Remain Extremely Choppy

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Silver Futures Silver futures in the December contract is currently trading at 23.61 an ounce after settling last Friday in New York at 24.67 down over $1 for the week as prices are right near a 5 week low. At the current time, I'm not involved. Suppose you have been following any of my previous […]

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