Feb 05 2020 0
China is getting more fierceful and serious about the pandemic. Attentions of the market have now turned to the stocks. Another big stimulus is coming in the US. We sure can learn a lot and start trading according to those news today. Check out how you should set up your trades in the article below.
Will it work?
Over the past two weeks, China has blocked about 50 million people in more than a dozen cities to stop the new strain of Coronavirus, which has infected thousands. It may take up to 14 days for the flu-like symptoms of this virus to appear. Soon, China will discover whether the largest mass quarantine in history has worked, or whether undiscovered cases have quietly spread and seeded a broad epidemic. much bigger.
Restrictions on travel and suspension of air and rail travel, buses, subways or car services for the Wuhan city of 11 million people began on January 23. This positive plan aims to prevent the disease from spreading from Hubei province, but experts are also trying to assess whether any groups of people have left Wuhan and Ho Uncle before the travel restriction. is applied or not. Their initial analysis shows that there are about 10 million trips to Wuhan from other cities and 12.5 million trips from Wuhan to other places. Meanwhile, the number of cases has now reached 20,600.
A bull market
The recovery of risky assets will pave the way for stock exchanges in Asia to escalate after a strong session of US stocks. Treasury bonds fell in speculation that the global economy could overcome the impact of Coronavirus. The S&P 500 index has surged the most since August - up 1.5%. Futures markets in Japan, Hong Kong and Australia all increased, indicating a strong recovery of Asian stocks. The Nasdaq 100 reached an all-time high as US technology stocks have now recovered all of the most recent losses caused by the virus. European and emerging market stocks also rose. The renminbi strengthened. All safe haven assets, from the Treasury Bonds to the yen and gold, are falling. Elsewhere, for the first time of the year, West Texas crude oil prices closed below $50 a barrel amid fears of declining demand due to the Coronavirus.
The 1MDB scandal
The Federal Reserve has permanently banned former Goldman Sachs banking staff from the industry in connection with the 1MDB scandal. A Fed order issued yesterday said Vella, a former co-director of investment banking in Asia, did not inform Goldman that an allegedly fraudulent business owner was involved in the services. 1MDB votes the bank processed in 2012 and 2013. The US Department of Justice charged criminally other former Goldman employees, including Tim Leissner, who pleaded guilty. Vella agreed to the Fed order without admitting or denying misconduct, and he intended to leave Goldman. The 1MDB conspiracy, in which a cast of characters has been charged with plundering billions of dollars from the Malaysian government, is the biggest scandal in nearly a decade for Goldman Sachs, still being managed by the agency and Ministry of Justice negotiated to resolve the investigation.
It is still on the rise
Yesterday, the stock market opened just a few minutes, Tesla's stock rose 17%. It's phenomenal, but the day before yesterday, it was up 20% - and also up 10% on the day of the previous week ... This year, the stock is now up 122% and giving electric-car manufacturers the price. The market value is larger than the market value of General Motors, Fiat Chrysler and Volkswagen combined. Surprisingly, there are no other stocks on the Nasdaq 100 that rose even a quarter by 2020. There are many explanations for Tesla's frightening stock price surge: that the company's CEO - Elon Musk - brought record fourth quarter revenues and profits in 6 periods; or because the company opened an important new factory in China; Or is it an extreme case of FOMO sweeping the investor community? Or is it a combination of all the above causes?
The United States is considering a plan to withdraw from another treaty. This time around is a $1.7 trillion global treaty in government contracts and it could anger allies in a time sensitive to trade like this. Officials in the administration of President Donald Trump are circulating a draft executive order that will trigger the US's exit from the World Trade Organization's government procurement agreement (aka the GPA), if The pact was not reformed from an American perspective. The purpose of the GPA is to open up government procurement markets for foreign competition and make purchases more transparent.
The U.S. withdrawal will create chaos for foreign companies bidding to gain access to the US $837 billion public procurement market and will complicate trade negotiations. nowhere near where Washington is planning to work with the UK and the EU. It could also pose a problem for Canadian Prime Minister Justin Trudeau, who still needs a broker agreement with his political rivals to ensure ratification of the US-Mexico-Canada Agreement.