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Euro starts sprinting after France approves EUR100 Billion aid pack – Market Analysis

Euro starts sprinting after France approves EUR100 Billion aid pack – Market Analysis

 

Today's session started with rises in European stock indices driven by news that France has implemented a 100 Billion Euro fiscal stimulus package to relaunch its economy.

European stocks have risen above 1%, and the Euro has slowed the decline it has been experiencing in the last two days.

But this movement has not been supported by the future indexes of the United States. A relatively good jobless claim data, somewhat better than expected 881k vs. 950k, has not been enough to encourage the American markets to continue their relentless upward path of recent weeks.

In this sense, the non-farm payroll figure that will be published tomorrow and which is expected to create 1,400k jobs may be decisive. But the risk is skewed to the bearish side. A figure that disappoints the market, lower than expected, could precipitate significant corrections given the technical situation of overbought and the signs of divergences.

In this regard, it is interesting to observe the VIXX's behavior since the middle of last month. This index reflects the intrinsic volatility of stock indices, specifically the USA500.


In general terms, a fall in the index or what is the same in volatility anticipates positive periods in the stock markets that are reflected in sustained increases. But for three weeks, this index has begun to rebound from the lows reached on August 10.

This is a sign that institutional investors who use more sophisticated instruments to manage their investments have begun to hedge through the purchase of derivatives (options) that increase the level of volatility.

The mainstream of retail investors has continued with their outright purchases. Still, the risk of a forced sell-off partly due to many positions in derivatives increases, and VIXX reflects it.

The stock index with the best performance throughout this post-COVID rally has been the TECH100, with an impressive and never seen rise of almost 87% in just five months.

Whether the economy recovers is a diversification of investments towards more cyclical stocks as if the economy does not heal as expected or suffers a setback, this index is vulnerable to corrections of greater depth.

Today and as we can see in the 4h chart, it is creating a reversal pattern that would activate below 12180, the current level, and that would take it to the next intermediate support zone around 12,000.

Esta información/estudio preparada por Miguel Ruíz (“el analista de estudios”) no tiene en cuenta los objetivos específicos de inversión, la situación financiera o las necesidades particulares de una persona. El analista de estudios es, principalmente, responsable del contenido de este informe de estudio, en parte o en su totalidad, certifica que los puntos de vista sobre las compañías y sus valores expresados en este informe reflejan con exactitud sus puntos de vista personales, y como consecuencia, toda persona que actúe basándose en ellos lo hace bajo su propio riesgo.

El estudio proporcionado no constituye los puntos de vista de JME Financial Services (Pty) Ltd., ni es una invitación a invertir con JME Financial Services (Pty) Ltd. El analista de estudios certifica, además, que ninguna parte de su remuneración ha sido, es o será directa o indirectamente relacionada con recomendaciones o puntos de vista específicos expresados en este informe.

A partir de la fecha en la que se publique el informe, el analista de estudios y su esposo/a o familiares que dependen financieramente de dicho analista, no mantendrán intereses en los valores recomendados en este informe (“como “intereses” se incluyen la titularidad directa o indirecta de los valores).

El analista de estudios no está contratado por JME Financial Services (Pty) Ltd. Le animamos a buscar asesoramiento con un consejero financiero independiente con respecto a la idoneidad de la inversión, en virtud de otra participación separada, cuando considere oportuno que es conforme con sus objetivos específicos de inversión, su situación financiera o, sus necesidades financieras particulares antes de comprometerse a invertir..

Las leyes de la República de Sudáfrica regirán cualquier reclamación relacionada o que surja de los contenidos de la información/estudio proporcionado.