عقود الفروقات هي أدوات مالية معقدة، وتنطوي على مخاطر عالية لخسارة الأموال بشكل سريع بسبب الرافعة المالية. 67% من حسابات مستثمري التجزئة يخسرون الأموال عند تداول عقود الفروقات مع هذا المزود. عليك الأخذ بعين الاعتبار ما إذا كنت تفهم طريقة عمل عقود الفروقات، وما إذا كان بوسعك تحمل المخاطر العالية لخسارة أموالك.
Dow hits record high amid big risk-on move
- Dow record intra-day high, energy & financials lead
- Bitcoin closes in on record high
- Tesla marks new high
- Crude breaks out of multi-month range
- Gold tests 200-dma
We’re seeing some big risk-on moves this afternoon in the market which we can attribute to some very favourable pre-Thanksgiving flows off the back of Trump giving the green light to the transition, news that Janet Yellen is heading to Treasury and vaccine positivity increasing as the Astra news gets fully digested. Uncertainties about next year are being cleared out of the way and the vast liquidity put is still positive even if this all looks like it’s a little exuberant.
The Dow rallied over 1% in early trade to a record high at 29,974 as it closes in on 30k and looks to cement the best month since 1987. Boeing and Chevron led the way, with financials following strongly, perhaps with expectations that Yellen at the Treasury will make for a steeper yield curve. Tech is the only Dow sector in the red with Apple (AAPL) and Microsoft (MSFT) lower, whilst Energy +3.5%, Financials +2.75% and Industrials +2.55% were the top gainers. We’ve also got small caps leading tech (Russell 2000 is +1.3% vs Nasdaq 100 almost flat on the session) as the rotation trade is strong. The S&P 500 holds the 3,600 handle again after a gain of 0.9%. Tesla opened at a record high with a market cap of more than $500bn. Shares last up 3% at $539.
The FTSE 100, which is up 15% this month, has been solid enough today and risen above 6,400 again but still a little short of last week’s peak at 6,463. Solid gains for crude oil lifting energy stocks (+5%) but we have also seen strong bid for travel stocks today after the UK announced a way for travellers to endure a shorter quarantine.
Reopening trade in play – UK leaders today looking like rotation trade remains driver.
Bitcoin has cleared fresh 3-year peaks and for all the world seems destined to take out the all-time highs.
Crude oil jumped to clear the August high and finally broke out of the range it’s been idling in for months. WTI (Jan) broke north of $44 at the US open to close the gap back to the early March levels, as the positive momentum from the big outside day reversal calendar on Nov 2nd. (marked)
Gold remains offered after breaking down at the two key levels flagged previously ($1,850 and then the 38.2% retracement around $1,835). Key support at the 200-day SMA/EMAs looking vulnerable. This would be the first break of the 200-dma since March and may herald further weakness.
Wall Street gets more bullish on equities
Wall Street banks are getting increasingly bullish on the outlook for equity markets as election risks subside and the Pfizer vaccine creates a much rosier outlook for 2021.
Goldman Sachs raised its 2020 target for the S&P 500 to 3,700 from 3,600 previously. This implies a forward PE multiple of 21x, rising to 22x by the end of 2021.
Strategists at the bank say that a vaccine is a more important development for the economy and markets than the prospective policies of a Biden presidency. And the outlook for 2021 is extremely bullish, with the year-end price target of 4,300, implying 16% upside.
It comes after fellow Wall Street investment bank raised its year-end price target for the S&P 500 to 3,600 and said the election outcome created a ‘market nirvana’. JPM also raised its 2021 forecast for the index to 4,000.
For Europe, GS expects a “V(alue)-shaped recovery” in 2021. They see growth making a marked acceleration and expect a strong bounce in STOXX Europe earnings with policy support to remain in place.
On FTSE 100, Goldman sees the improved macro and commodities environment as supportive going forward. The bank forecasts the FTSE 100 to reach 7,200 by the end of 2021, implying 20% total return in GBP.
Since Pfizer announced its vaccine is 90% effective in phase three clinical trials markets have reacted positively though there has been a notable rotation out of growth stocks and into value and cyclical areas. This has best been demonstrated by the rally in the small cap Russell 2000 and decline in the Nasdaq 100. Whether this trend continues remains to be seen but it’s clear markets are on the move again.
Vaccine winners and losers
Stocks have rallied on news that we could soon have an effective vaccine against Covid-19.
Initial optimism is exceedingly high and could fade – we should not be jumping any guns here – but ultimately a vaccine that works effectively would be good for the economy and favours the cyclical parts of the market that we thought were going to struggle as a split Congress meant less stimulus.
A working vaccine is positive for cyclicals and value – the reopening trade essentially. The dichotomy in the market is stark: the biggest gainers in a frantic session today are among those stocks worst hit by the pandemic – travel and leisure chiefly, whilst Covid winners are doing poorly. We should be careful in overreacting – but it’s clear the market is forward-looking and pricing in recovery in a number of beaten-down areas next year.
Several questions remain, which won’t be answered right away.
When does the vaccine get rolled out fully? So how quickly are we ‘back to normal’ effectively? The UK has pre-ordered 30m doses of the vaccine, but what about other countries?
Given the US election result, does this make it harder to agree stimulus that is required now for the economy?
If this is a higher yield, higher inflation world, how does the Fed start to adjust? Will it even consider thinking about thinking about raising rates? Lots of Fed speakers this week to frantically rewrite their speeches.
Major indices (ex-Nasdaq). The Dow is surging 1,500pts and set to open at a record high. The FTSE 100 is up over 5% with all sectors green, led by energy and financial and Utilities, Tech and Healthcare at the bottom but still positive as the news lifted the boats.
Travel stocks like IAG +30% and EasyJet +26% are among the best risers on the UK market, whilst Rolls-Royce +46% led the charge. Cineworld +47% and Carnival +31% also indicative of a major rotation back into these stocks that have been hardest hit by the pandemic. In the case of Cineworld the 9.4% stock out on loan points to a nasty short squeeze that may exaggerate the move.
Pubs and restaurants like JDW +15% and Restaurant Group +26% were among the other big gainers from the news. Back to normal means back to the pub – happy days!
Energy – A vaccine should help boost demand more quickly. As crude prices rallied, Shell +12% and BP +15% boosted the FTSE 100.
Financials – A vaccine is a yield steepener – Lloyds and Barclays both +10%.
Crude oil naturally rose on expectations that a working vaccine will equate to a swifter demand recovery, at least much quicker than we would have thought only yesterday.
Covid winners: Stocks that won because of the pandemic are naturally on the hook. Stay at home and WFH stocks fell, hurting the Nasdaq. Zoom –15% and Peloton –11% pre-market is indicative of the rotation out of these Covid winners into reopening trades.
UK stocks in the red included the main winners from the pandemic – Ocado, Fresnillo and Kingfisher (back to normal means no DIY – oh happy days)
Keep an eye on these stocks when the US cash equities open later and (Covid Winners Basket).
Bonds – US Treasuries were offered with the 10-year yield spiking north of 0.92%. Inflation could come through next year with large excess savings to be deployed in many sectors of the economy, notably in travel.
Gold – higher yields weighed on gold prices, though we would expect inflation expectations to rise and this could offer ongoing support to prices.
Pfizer, Biontech vaccine news spurs gains
Stock markets surged on some extremely positive news from Pfizer and Biontech, who say their vaccine is 90% effective in phase 3 clinical trials.
From tracking just under 6,000 all morning the FTSE 100 rallied over 100 points on the news, whilst e-minis went up 70 points or so.
The Dow is now seen up 1,300 points – coming on top of the wave of relief from Joe Biden’s victory it’s proving a spicy cocktail for stocks.
I won’t lay with lots of comment about the trials as I am no vaccine expert, all I can say is this is a good news day. Whilst we are not there yet, news that this vaccine could be highly effective is the best thing markets could hope for.
Public health officials will remind us there is a long road ahead, and many challenges will be faced along the way, but there is an enormous sense of optimism today – light at the end of the tunnel. Let’s just hope the vaccine deniers won’t get in the way, but 2021 just got a lot brighter.
E-mini futures – spot when the vaccine news broke
Dow reshuffle: Exxon, Pfizer, Raytheon out; Amgen, Salesforce.com, Honeywell in
Exxon Mobil, Raytheon and Pfizer are to be dropped – all stocks dropped on Tuesday after the announcement late on Monday. As of August 31st, they will be replaced by Honeywell, Salesforce.com and Amgen. All three rose sharply on anticipated rebalancing into these stocks by passive and tracker funds.
It leaves United Health the largest stock on the Dow, with the Apple stock split reducing its weighting as the Dow is a price-weighted index. Many may question why the likes of Amazon, Facebook or Alphabet have not been included instead, but the thinking around index composition for the Dow has never been entirely clear.
What do hedge funds, analysts and insiders say about these new Dow components?
European shares stutter after Wall Street’s all time high
US stocks closed at record highs but European stocks remain a lot more subdued, with the FTSE 100 struggling at the open today after suffering a sharp reversal in the latter part of the session yesterday. Bulls did try to wrestle control from bears in the first hour of trading, but it looks like it will be another volatile day and a lot will depend on how Wall Street performs in the first hour or two of the NY session. House speaker Nancy Pelosi said the Democrats could be willing to agree to a scaled-down stimulus package, which has helped soothe risk muscles. Asian shares were mixed and US futures are flat.
Whilst the S&P 500 notched record intra-day and closing highs, the FTSE 100 is tracking close to the lower end of the June range and is –20% YTD. Sterling’s strength has not helped but European equity markets just haven’t matched expectations. The DAX has done better but remains some way off its highs. While we focus on the broad market in the US, the fact is it has been driven largely by a rather narrow group of stocks and the rest of the market has not enjoyed the same bounce. Tech is up 50% for the last 12 months, whilst Energy is down 30 per cent.
The question is whether this is early cycle or the death throes of the last bull market. Either you read this as a sign that the market could go a lot higher as we enter a cyclical bull market with lots of cash sitting on the side lines still to pour into value, or you worry that this is a Fed-fuelled tech bubble with forward earnings multiples looking enormously stretched at around 25x on a forward basis. I would be concerned that volatility will increase as we head into the autumn with the election looming and there is at least a chance of a technical pullback for the S&P 500. And how much more stimulus can you throw at this? The Fed has killed the bond market and lifted the boats – but how much more can it do? If the market tests the Fed again, what is left in the tank?
For the FTSE 100, the near-term downtrend is starting to approach important support levels.
USD can’t catch bid
In FX trading, the US dollar was offered yesterday and was the chief driver of the market, sending the euro to its highest versus the greenback in more than two years. The break above 1.19 for EURUSD leaves bulls in control after two previous attempts failed. EURUSD eased back from these highs today but remains supported above 1.19 with bulls eyeing a recapture of the May 2018 swing high at 1.20.
GBPUSD was a little softer this morning after shooting clear of the 1.32 level yesterday to hit its best level since the election last December. The move clears important technical resistance of the long-term downtrend and opens a path back to 1.35, last year’s peak, with the golden cross (50-day SMA rising through the 200-day SMA) considered a bullish confirmation of the rally. Near term the higher-than-anticipated CPI inflation reading this morning has not been able to lift the pound, although it ought to help quell immediate speculation the Bank of England will resort to negative rates.
Meanwhile the pound remains exposed to significant headline risks this week. Brexit talks have not gotten off to the best start as the EU rejected British proposals for truckers’ access to the continent. I would anticipate that the longer this drags the more we see pressure come back on GBP. FOMC minutes tonight will be watched for any signs the Fed feels the need to lean even harder on rates. For now the dollar can’t seem to catch a bid with the dollar index now barely holding the 92 handle and the last line of defence before a return to the 80s sitting at 91.60 (the 78.6% retrace of the two-year uptrend) now firmly in view.
Oil prices slip ahead of OPEC+ meeting
Crude prices were a little lower this morning ahead of an OPEC+ meeting to review after touching a 5-month high yesterday on improving risk sentiment as US equities rose, whilst the softer dollar is offering ongoing support to commodity markets.
OPEC and allies are likely to stick with 7.7m bpd supply cut – what we don’t know is whether the demand side really picks up into the back end of the year. On that front a lot will depend on the containment and control of the virus in Europe – rising cases raises real risk that hamstrung governments simply revert to a wide lockdown and restrict movement again. Airlines and travel stocks will face a tough time.
Gold was softer after breaking back above $2k in yesterday’s volatile session. Near-term support appears to rest on the 23.6% retracement around $1980. Whilst bulls are still just about in control, their momentum is not what it was and we would prefer to see the next swing clear $2015 for the bullish trend to be fully reasserted. A further corrective move lower should still be considered a real possibility.
Risk offered into the weekend
A number of factors have conspired to create a more risk-off tone to the end the trading week than we saw at the start of the European session.
Although European indices are just about holding the line, US futures are indicated lower and we may see the S&P 500 retest the lows under the 50% retracement level at 2790. The Dow is indicated -200pts.
The FTSE 100 has retreated sharply from the morning highs of the day and may well stutter into the close should Wall Street drag sentiment down. The DAX is also well off the highs though still positive, the CAC is already weaker, and the Euro Stoxx 50 is flat. US indices are already set for their worst week since the middle of March. Key test at yesterday’s lows at 2,766 for SPX.
In FX, the Japanese yen was the strongest and kiwi was the weakest. Sterling sank to its weakest since late March. Gold has broken out above the Apr 24th peak and now has the $1747 region its sights. A breakout above $1750 could see the next leg higher to $1800.
US retail sales were even worse than forecast in April, sliding 16.4% vs 12% expected. Core retail sales fell 17.2% vs 8.6% expected. Trying to read too much into individual data points in the current environment is exceptionally tough, but the optics from these figures are hardly reassuring.
US-China relations sour by the hour, with the White House moving to block semi-conductor shipments to Huawei. Reports suggest China is looking at retaliation with measures against US companies like Apple, Qualcomm and Cisco. I think we can assume a ratcheting up of pressure on China by the Trump administration in the coming weeks.
UK-EU relations are also looking very risk-off. GBP is now in full RoRo mode and cable made fresh two-month lows as it breached the April 6th support at 1.2160 to test 1.2150. It looks like real stalemate.
The UK is refusing to countenance the EU’s level playing field demands. Britain also said it would refuse any offer to extend the transition period. Both Frost and Barnier sounded downbeat on the prospects of a deal. Barnier said the positions are extremely divergent, Frost said very little progress has been made.
A lot to do to avoid the dreaded no-deal – downside risks for GBP clearly evident. The pound is already beaten up pretty badly due to the wider macro outlook as a risk-on currency these days, and the Brexit risk has reared its head again to impart more pressure.
Advisory note – Trump as ever is the wildcard and we have Rose Garden update on a vaccine from the president at some point today.
Oil leads global market tumble on ‘Black Monday’
The collapse of OPEC+ talks over the weekend tipped markets into chaos on Monday. Traders, already on edge due to the unfolding coronavirus epidemic, were sent fleeing to safety after Saudi Arabia slashed its crude oil prices.
Crude and Brent tumbled over 30%, their worst daily performance since the Gulf War, hitting lows below $27.50 and $31.50 respectively. The Kingdom cut prices for April crude by 30% and stated that it intends to raise its output above 10 million barrels per day. Talks at the weekend saw OPEC and its allies fail to agree new terms for an oil production cut; OPEC+ couldn’t even agree to extend the current level of cuts, let alone deepen the cuts to battle the hit to demand from the coronavirus outbreak.
Saudi Arabia is well-positioned to weather weak prices and Russia claims it can withstand the pressure for up to a decade. US shale oil producers, who have flooded the global market with oil to take advantage of supported prices and are heavily debt-laden, could be in dire trouble.
Global equity markets have been sent tumbling. The collapse in the oil markets, combined with news that the Italian government has imposed travel bans on 16 million people, sent investors running from stocks.
US futures went limit down after triggering circuit breakers during the Asian session. After a 5% drop the Dow was indicated to open down over 1,300 points, but based upon the ETF market – which is not suspended – the Dow was looking at a drop of 1,500. Asian stocks took a hammering, with the Hang Seng and the Nikkei both closing over 1,100 points lower.
European equities sank as well, with the DAX, and Euro Stoxx 50, all off around 7%. The FTSE 100, also down 7% to test 6,000, was trading at levels not seen since the immediate aftermath of the Brexit referendum.
Stocks most at risk
While stocks across the board tanked, several industries were hit harder than others.
Oil majors slumped. BP (LSE) tumbled 20%, ExxonMobil dropped 17%, Chevron tumbled 16%, and Occidental cratered 38% – all in pre-market trading on the NYSE – while Royal Dutch Shell fell 14%.
Airlines were hit hard as well after the price slump left them sitting on big losses after hedging oil at higher prices. American Airlines, Delta Airlines, Southwest Airlines and United Airlines were all down 5-6% in the pre-market.
Coronavirus fears weighed on tech stocks. The FAANGS all recorded losses in the range of 6-7%, but cruise ship operators were hit harder. The US government warned American citizens not to go on cruises. Carnival – the company that owns many of the ships currently stranded due to on-board quarantines – dropped 10%, Norwegian Cruise Lines tumbled 11%, and Royal Caribbean Cruises slumped 12% – all before the markets opened.
New record lows for US bonds
The flight to safety drove the yield on US government debt down to record lows. Yields move inversely to prices. The yield on the US 10-year treasury bond fell to 0.32% while the yield on the 30-year treasury note fell towards 0.7%, breaching 1% for the first time in a year.
Gold traded around $1,673 after hitting $1,700 over the weekend.
Cryptos join in with global market chaos
The cryptocurrency market is no stranger to volatility. The world’s largest cryptocurrencies were down around 10-15%, with Bitcoin falling below $8,000.
Markets still rattled by coronavirus fears after yesterday’s brutal sell-off
Investors fled to safety en masse yesterday as a spike in coronavirus cases in Italy, South Korea, and Iran raised fears that the outbreak was becoming a pandemic.
$1.5 trillion was wiped from global equity markets; the Dow recorded only its third ever 1,000 point drop, and the VIX ‘fear index’ spiked to the highest levels since January. Oil sank 4% and gold leapt to a seven-year high.
Today, the sell-off has paused, but the market is hugely indecisive.
Stocks, oil, volatile as markets await next major development
Since the European open today we’ve seen major indices like the DAX, FTSE 100, and Euro Stoxx 50 extend gains towards 1%, drop to multi-month lows, and rebound above opening levels. US stock market futures have gone from indicating a 200-point gain for the Dow on the open to minor losses, and back to signalling a positive open.
The FX market continues to see a shift towards the safety of the US dollar, although cable has managed to hold some gains despite easing back after rising to test $1.30 earlier in the session.
Gold is down around 0.8% and silver has suffered losses of more than 1.3% on profit-taking, but risk-appetite is clearly still absent as crude and Brent oil are struggling to hold opening levels. Like stock markets, the two benchmarks climbed on the open, then fell into the red, before recovering somewhat.
New coronavirus cases reported in Italy, Iran, Austria, Croatia, Tenerife
Markets are caught between buying the dips and pricing in further worrying developments. The first case of coronavirus has been reported in Southern Italy, and Austria and Croatia have reported their first cases today as well. The two Austrian cases are in the province of Tyrol, which borders Northern Italy, while the young man infected in Croatia had recently returned after spending several days in Milan.
Meanwhile, hundreds of people are being tested and many guests quarantined in a hotel in Tenerife after a case of the virus was confirmed there. Iran has also provided an update on the outbreak there: the number of cases is up to 95 and 16 people have died – the Deputy Health Minister is one of those infected.
We’ve also had a slew of companies warning that COVID-19 will impact their earnings. UK blue-chips Meggitt and Croda are weighing on the FTSE 100 after issuing warnings over the impact of the virus upon their businesses.
Markets may gain more direction when the US markets open, but even then uncertainty looks to be the order of the day.
Midday wrap: Europe higher as risk appetite returns, DAX near ATHs
European markets enjoyed solid gains Thursday as risk appetite returned. But the rally hardly betrays a wanton desire for equities because a) we’re already at or near record highs and b) the selloff had not been especially deep despite US-Iran conflict fears seeing havens enjoy firm bid. Even a shaky ceasefire is enough right now to support the bulls. Stronger-than-expected German industrial production figures (+1.1% vs -1.7% prev and 0.8% est) are helping sentiment, particularly in Frankfurt.
The DAX has led the charge with a 1.25% push higher to 13,485, having earlier touched a high of 13,522. With investors apparently keen to load up on risk with US-Iran tensions easing and a US-China trade deal baked in, we may well see the drive to January 2018’s all-time high just shy of 13,600. Geopolitical risks remain of course with the situation in the Middle East still fluid, but you get the sense the bulls are keen to push this over the line.
The FTSE 100 added 0.5% to break 7600 with resistance seen at 7675, the high posted Dec 27th. A softer pound is compensating for the weaker oil price.
Elsewhere US markets are firmer again with the Dow shaping up for a triple-digit gain on the open.
Oil has held just short of $60 with no further losses while gold is also holding the line around $1545.
In FX, the pound took a drubbing as the market decided Bank of England governor Mark Carney’s comments were more dovish than before. GBPUSD slipped the 1.31 handle to test support on the 50-day moving average around 1.3010. I don’t see much in what he said as particularly more dovish than in the past. Commentary around the likelihood of the UK agreeing a trade deal with the EU before the end of 2020 is also weighing on the pound today.
Meanwhile, as flagged in the morning note, the bullish engulfing daily candle for USDJPY is resulting in further gains today with the pair moving to 109.50 and momentum in favour of USD across the board. Having cleared the 200-day and other MAs bulls are looking to break the trend line drawn from the falling highs since the swing high of Oct 2018. Big 61% Fib level to cross at 109.60 where we have seen rallies hit a wall several times lately. This level will offer a decent amount of resistance as a result.
Cowen has come out with a bunch of price target upgrades
Facebook raised PT to $245 from $240
Alphabet raised PT to $1575 from $1525
Twitter raised PT to $34 from $32
Elsewhere AMD shares are up c2.5% pre-market after Mizuho raised the stock to buy.
Benchmark has initiated Lyft with a sell rating , price target of $35, which is $10 below yesterday’s closing price.
Boeing shares are up a touch pre-mkt despite Berenberg cutting to hold. After enjoying a thumping 5% jump yesterday, Tesla shares are a touch softer pre-market after being cut to neutral at Baird, a long-time bull which seems to think the recent rally has run its course. They said: “we would not short the stock and remain positively biased over the long run.” See yesterday’s Equity Strategy: US earnings Q4 preview: Two major stocks to watchfor more on Tesla.