Sep 01 2020 0
The beginning of the month always bring us many trading opportunities. Let's check out the latest events around the world to find such opportunities.
The Australian reporter
Chinese authorities arrested an Australian broadcaster from working with a government-run station when relations between countries deteriorated over trade and security concerns. ABC News reported that Cheng is a journalist and television presenter working for the Chinese government's English news channel - CGTN. According to Australian national broadcaster, Cheng has yet to be charged, but is being held under "residential surveillance at a designated location." ABC News said Cheng could be held for up to six months without a lawyer or other help.
Although China remains Australia's largest trading partner, the relationship has markedly deteriorated since the government in Canberra banned Huawei from participating in its 5G network and passed laws preventing water interference. In addition, this has resulted in a number of moves - the most recent being an anti-subsidy tax on Australian wines.
Bearish market
Asian stocks look set to correct early in the new month after most US stocks fell, though tech stocks continue to rally. Futures markets indicate modest losses in Japan, Australia and Hong Kong. The S&P 500 fell, but recorded the fifth consecutive monthly gain in August. The dollar weakened against its G-10 peers, setting the fifth consecutive monthly decline. Treasury bonds rose, with 10-year yields falling to just over 0.70%. The Dow Jones Industrial Average led losses after component stocks fell, with Microsoft and Walmart falling on fears that China could block the sale of video app TikTok. The Nasdaq 100 index was raised to 12,000 for the first time thanks to the increase in the price of Apple shares when the company split shares at a ratio of 1:4. In other developments, oil fell back below $43/barrel as the coronavirus epidemic in major world economies outperformed the improvement in China's economic performance. Silver prices rise, outperforming gold.
Buffett’s bet
According to some strategists, Warren Buffett's recent $6 billion bet on Japanese trading companies could act as a catalyst to lure foreign investors back into the market. Stocks are heavy on the country's industry value. Berkshire Hathaway's purchase of stakes in the five major trading companies that dominate Japan's energy and raw materials industry - including Itochu, Marubeni, Mitsubishi, Mitsui and Sumitomo - stirred investors as they speculate on direction. new travel of the US corporation. Amir Anvarzadeh, a senior strategist at Asymmetric Advisors in Singapore, said: “Given the high cyclical nature of the Japanese market, betting on commercial firms seems to underline his vision that perhaps the economic cycle is bottoming out and you're looking beyond a pandemic.”
GDP down
The Indian economy recorded the biggest decline among major economies last quarter, with the recent increase in the rate of coronavirus infection weighing down the prospects of recovery. The Department of Statistics said in a report on Monday that gross domestic product fell 23.9% in the three months to June from a year earlier. That was the strongest drop since the country started releasing quarterly numbers in 1996 and is worse than any of the world's largest economies tracked by Bloomberg. The average estimate in a survey of economists is down 18%.
Yield hunt
The company's head of asset allocation, Ben Inker, said in a quarterly letter to investors on Monday: "Jeremy Grantham's GMO says it's time to give up Treasury Bonds. The United States, because world zero interest rates will force investors to consider high-yielding corporate bonds and emerging-market debt", leaving investors with no choice. other than looking for another place to invest. Among his suggestions are to consider cutting equity allocation from 60% to 50% and adding 10% to more risky debt. In an interview, Inker said: “Low interest rates - which are likely to persist for years after the recent Federal Reserve policy change - means“ taking more credit risk to get higher profits”.
