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New developments for the USA and Europe markets - Market Overview – October 12

New developments for the USA and Europe markets - Market Overview – October 12

On a public holiday in the United States and some other countries around the world, stock markets experience significant growth as investor interest focuses on the start of the Q3 season.

Technology companies are the ones leading this upward momentum, after the announcement in Europe of new restrictive mobility measures. In the first lockdown from the second quarter of this year, the use of technologies that facilitate communication both in the workplace for private and personal use were highly promoted.

The American context

The US elections seem to have taken a back seat due to the substantial difference in voting intention shown by the polls in favor of the Democratic candidate Biden. Here everything indicates that the uncertainty is minimal, and as indicated in previous materials, the market is positive of a Democratic victory. This is mainly because the possibility that a larger fiscal stimulus package would be assured with the victory of Biden.

And in any case, Nancy Pelosi and Mnuchin, the American Secretary of the Treasury will continue to have meetings in search of an agreement to implement these measures even before the electoral date.

In this positive scenario in terms of market risk sentiment, USA500 has broken above the 3422 area, activating a reversal-pattern that has a theoretical target at the all-time highs located at 3580.

Everything will depend on the results of the companies, a result which we will find out by the end of the current month. It must be kept in mind that forecasts are positive for many companies, thus it will be necessary that expectations are met or exceeded for the upward trend to continue.

Indices in Europe

In the case of the European indices, they still settle behind the North American ones. Germany30 stands out with three weeks of advances that bring it back to the resistance level around $13,277.

Even though the pandemic situation in Europe has worsened in recent weeks, the strict measures taken by governments seek an improvement in the number of infections soon.

Also, as a positive element, we must consider the statements of the President of the European Central Bank, Lagarde, who has stated that they are prepared to increase their monetary stimulus, and that the current expansionary policy will be maintained for a long and indefinite period of time. It seems that if the American indices – which have always had a high degree of correlation – have a good performance, the German index would be closer to the maximum levels at the beginning of the crisis around $13,700.

This information/research prepared by Miguel Ruiz (“the research analyst”) does not take into account the specific investment objectives, financial situation or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.

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