Jan 10 2020 0
Let's catch up with the latest events in the world and see what forex trading strategy we should use.
The market was tumultuous
Asian stocks will have a tumultuous start as investors keep an eye on whether geopolitical tensions will ease or not and wait for the latest data on the US labor market. US stocks earlier rose to an all-time high. The futures market in Japan and Australia both increased; while in Hong Kong it dropped. The S&P 500 climbed to a new record yesterday and the yen dropped to a 2-week low against the dollar as the tensions in the Middle East eased.
The greenback gained against currencies for the third day in a row after the number of applications for unemployment benefits fell more than expected, in addition to signs of the strength of the economy. Report on US non-farm payrolls today. Yields on 10-year Treasury Bonds fell after the Government auction. Elsewhere, oil was trading near the lowest level since December amid concerns over a conflict between the United States and Iran.
Prospects of companies with small capitalization
In the Chinese stock market, the stock price rise of small cap companies rarely lasts long and usually it will mark the beginning of excessive risk taking. . But this time, it signaled optimism about the Chinese economy. The superiority of the ChiNext Index compared to the benchmark scores of larger companies has maintained for 6 consecutive months, an unprecedented feat since 2013 and continues this year.
This progress was due in part to a reduction in trade tensions between China and the United States, and US investors also hoped for an economic recovery after some initial signs of stability. easing direction of the central bank. As a result, investors bought shares of companies with small caps, which were more sensitive than the fluctuations in market sentiment with their size. Zhu Chaoping, one of the global market strategists at JPMorgan Asset Management, said: "It is an omen. Investors are pricing with expectations of a slight economic recovery in the first half of 2020. and we can get broad benefits when the economic environment is more favorable."
Uniqlo's poor performance
The political boom in Asia has pulled Fast Retailing Co.'s overseas growth momentum. Fall back, when Uniqlo reported the worst quarterly revenue decline in a decade to the international segment. The largest Asian retailer has long believed in expanding into overseas markets to grow its strength in the face of a weak market in Japan. However, now that strategy is getting into a stagnation due to Hong Kong political protests as well as a trade dispute between Japan and South Korea. Yesterday, the report on quarterly retail sales showed a 3.6% drop for the international segment. Except for a small decrease of 0.2% in 2017, it was the first quarterly decrease for this segment after 10 years.
South Korean regulators, which have protected small investors from risky investments and sophisticated derivatives, are turning to a new target: suspected crooks in Small national cap company. According to the Financial Monitoring Service, Korea's leading financial monitoring agency said. Like the Pump-and-dump plans, ill-intentioned investors are suspected of taking up the majority stake in small-cap companies. Then, they will publish staged news to push stock prices up, or pave the way for the sale of convertible bonds, thereby enriching themselves. The perpetrators are called "corporate hunters" and although this scam is no stranger, it has recently appeared a lot.