Sep 04 2020 0
I have found some really interesting developments around the financial world today. Let's check them out to find trading opportunities for the day.
President Xi Jinping said nothing could happen between the Chinese people and the Communist Party, creating an atmosphere of war at difficult times in US-China relations.
Speaking at an event commemorating China's victory over Japan in World War II, President Xi outlined areas where China would "never" accept its intervention from foreign forces. He specifically targets threats to the Chinese Communist Party's continued one-party rule. "The Chinese people will never allow any individual or force to separate the CCP from the Chinese people" said President Xi. “The Chinese people will never allow any individual or any force to distort the history of the CCP, nor to defame the CCP's idiosyncrasies and purposes." President Xi did not specifically mention the U.S., but his comments can be understood as a message about the relationship.
Asian equities look set to end the week on a slump after US equities plunged their most in nearly three months, with a turnaround away from tech stocks on the rise as investors questioned. on the sustainability of high valuations. Futures markets in Japan, Hong Kong and Australia fell, though signaling a decline less than the 3.5% decline in the S&P 500. The Nasdaq Composite fell 5%, the biggest decline since May. 6. Treasury yields fell and the dollar strengthened. In another development, oil prices fell. The Cboe Volatility Index, often referred to as Wall Street's "fear gauge", rose to its highest level since June. Bitcoin fell 7.6 percent.
NASDAQ on Thursday drew painful lessons about how leverage in the options market can blow away an investor's account. The benchmark losses have been brutal enough, as much as 6% in the Nasdaq 100, or about $730 billion, wiped out. In single securities contracts, investors still witness some instruments being wiped out over a period of a few hours. The volume of put and especially call options has exploded in recent weeks, the majority of which is in small lot sizes, representing fish traders. multiply. While it is never hard to see the staggering losses of options contracts during market volatility, these losses are particularly tragic at the moment. A call contract with the strike price of $125 per Apple stock, maturing tomorrow, is down 89% when the stock is down only 8% to $121. A bullish bet on Tesla stock reaching $500 on maturity (Friday) will lose 90% when the stock falls 9% to $407. And a call contract on Zoom stock at the strike price of $420 is essentially worthless when the stock hits $381. The dangers of ticking at the wrong time are so dire, but why they are so heavily used by new traders, that's a point of debate on Wall Street!
A currency war
The growing insecurity among global central banks over the US dollar's decline has sparked speculation that a new currency war may be afoot. European Central Bank official Philip Lane this week fired a warning shot, which clearly drew attention to the exchange rate as the euro hit $1.20 for the first time in two years. The Reserve Bank of New Zealand boss Adrian Orr is more cautious about the exchange rate, however, he has signaled that he will loosen monetary policy when necessary to spur growth. And other central banks from Britain to Japan have also shown a willingness to loosen loans. Ben Emons, executive director at Medley Global Advisors, said: “As the US dollar moves, there will be a point in time when central banks will react because the dollar is significantly weaker or stronger. has an impact on global monetary policy ”. On the other hand, Beijing is allowing the yuan to appreciate faster as it seeks to lower import prices and spur weak consumer spending.
The king of ETF
There's a new king of actively regulated ETFs. The JPMorgan Ultra-Short Income ETF (JPST) overtook the long-reigning PIMCO Enhanced Short Maturity Active ETF (MINT) to become the largest active fund on the $4.9 trillion market.
JPST has risen to $13.94 billion in assets after launching in May 2017, surpassing MINT of $13.88 billion, launched in November 2009. It wasn't until 2014 that JPMorgan started to roll. Launched his first ETF, so the performance is remarkable. The company is still a relatively small player: They only control 31 funds with about $39 billion under management, according to data compiled by Bloomberg. However, the company created a niche in the actively managed corner of an industry dominated by passive giants like BlackRock and Vanguard.