EU Just opened, the sell-off is picking-up steam led by the CAC that recently hit an all-time high. The FTSE100 is on the heals of the CAC. US Futures are down ½% or so, let's see what happens when NY opens. Y'day EU did add to its rally so I did unwind a few more longs there, now, against NEUROWAY advise, I'll be sitting on my hands for a while.
Trading the Indices on Fundamentals
- Thread starter FXtrader8911
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Looks like impeachment, geopolitics, alarm bells out of Davos and more could not phase markets but a snake to human transmitted virus did... creepy! gives me goose-pimples thinking about it. How about introducing a no-fly list for countries that don't observe basic, accepted slaughter practices? Looking at the death-toll caused by SARS & BIRD FLUE, pandemics claim more lives than terrorist attacks, so why not a no-fly list from countries that are likely to contain people infected with incurable animal to human diseases?
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The risks of a potential coronavirus epidemic have dominated market assessments this week but as the demographics become clearer, the pricing of that risk has varied across regions and within asset classes, this divergence continued overnight. It is likely that adjustments and divergence between markets will continue as details of the threat and countermeasures becomes clearer.
I would say prudence and patience is warranted, the situation needs to become clearer before rushing to buy the current small dip. The history with SARS does show that China downplays these things... Until there is the WHO independent assessment one should wait and see.
I would say prudence and patience is warranted, the situation needs to become clearer before rushing to buy the current small dip. The history with SARS does show that China downplays these things... Until there is the WHO independent assessment one should wait and see.
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Fri saw something that hasn't been seen for a while... US markets down over 1% in a session and now 2% off their highs. They are approaching levels that entering longs needs to be considered. My view is that further lows will be seen but some smalls long positions around current levels (DOW 28,840) might be warranted. EU did not participate in the sell-off but France just announced 2 confirmed cases of the snake flue so expect a gap down on Monday.
Well, nobody was talking about a "no-fly" list anyway, perhaps we need to have a repeat of the Spanish flu of 1917 that infected over 10% of the world population, if that happened again then perhaps someone will finally realize that unhealthy and unregulated slaughter practices pose a real world-wide pandemic risk, so, countries that don't regulate animal slaughter and in particular allow the slaughter of wild species, should indeed be quarantined permanently. The scary part is that there were no effective anti-viral drugs in 1917 and there are STILL none now. Perma-bulls fail to see that these sort of things directly affect the consumer and it's the consumer that is carrying the weight of a healthy economy. A repeat of the Spanish flu is, of course, a worst-case scenario but the slow action of the WHO and the lack of a process to issue "no-fly" lists for entire countries does make it a possibility and such an event could wipe 60% or more off market values. Online shopping won't save retail either... any responsible delivery company will cease operations for safety reasons of their staff also.
Market's persistence resilience in the face of no good news and plenty of bad, is getting ridiculous.
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The lack of action by the WHO and indeed lack of guidelines issued for people to follow is rather ironic. These are the sort of bodies that regulate such things as use of seat belts to help protect people in the event of a serious accident which might happen once in their lifetime, it that, yet no preventative action nor guidelines get issued for protecting against an incurable disease until X number of people have died! Considering that disease takes days/weeks to kill you, waiting till the magic X number is reached could well be too late for containment.
Tesla reached a market cap of over $200b making it the most valuable car company in the US, surpassing GM an Ford. Not bad for a company with just 2 manufacturing plants and who has yet to make a profit. Market euphoria is serving Musk well but the short-sellers haven't given up on Tesla.
The coronavirus with the potential of affecting China's economy (the epicentre) for some time to come, could have the tangential effect of making China default on its commitment to buy US produce in the quantity specified by the phase 1 agreement. Not sure just how trigger happy Trump is but considering the proximity of the elections and the media surefire to broadcast & magnify any breach of the agreement, Trump could well comparing on a China-bashing theme and re-kindle the trade war with new tariffs on China. A lot of hypotheticals here but it's yet one more factor that could upset markets.
Things to consider when placing your next trade:-
1.The mayor of Wuhan (the epicentre of the virus) advised that 5 million residents of Wuhan had left the province for all part of China and also to overseas destinations before the lockdown was effected.
2.Bloomberg commentators covering the Asia markets are warning of "market chaos" for the next few weeks.
3.Mon will see 16 of the S&P top companies reporting... it is likely that even if reported figures are good, the market's focus will remain on the possible effects of the coronavirus.
4.China watchers are saying that if China markets were open on Monday, they'd be at least 5% down and warn that by the time they do open, the gap down will be much higher than that.
1.The mayor of Wuhan (the epicentre of the virus) advised that 5 million residents of Wuhan had left the province for all part of China and also to overseas destinations before the lockdown was effected.
2.Bloomberg commentators covering the Asia markets are warning of "market chaos" for the next few weeks.
3.Mon will see 16 of the S&P top companies reporting... it is likely that even if reported figures are good, the market's focus will remain on the possible effects of the coronavirus.
4.China watchers are saying that if China markets were open on Monday, they'd be at least 5% down and warn that by the time they do open, the gap down will be much higher than that.
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