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.
The research provided does not constitute the views of JME Financial Services (Pty)Ltd nor is it an invitation to invest with JME Financial Services (Pty)Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.
As of the date the report is published, the research analyst and his/her spouse and/or relatives who are financially dependent on the research analyst, do not hold interests in the securities recommended in this report (“interest” includes direct or indirect ownership of securities).
The research analyst in not employed by JME Financial Services (Pty)Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation or particular financial needs before making a commitment to invest.
The laws of the Republic of South Africa shall govern any claim relating to or arising from the contents of the information/ research provided.
JME Financial Services (Pty) Ltd trading as ZA.CAPEX.COM acts as intermediary between the investor and Magnasale Trading Ltd, the counterparty to the contract for difference purchased by the Investor via ZA.CAPEX.COM, authorised & regulated by the Cyprus Securities and Exchange Commission with license number 264/15. Magnasale Trading Ltd is the principal to the CFD purchased by investors