Archives of “July 28, 2020” day

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European stocks are ending mixed

  
Analysis, Global Indices

Major indices off the session lows

The major European stock indices are ending the session with mixed results. However most of the indices are well off there intraday lows. The provisional closes are showing

  • German DAX up 0.06%. The low was at -0.72%
  • France’s CAC, -0.11%. The low was at -0.93%
  • UK’s FTSE 100, +0.49%. The low was at -0.35%
  • Spain’s Ibex, +1.0%.. The low was at unchanged
  • Italy’s FTSE MIB, -0.5%. The low was at -1.6%

Florida coronavirus cases rise 9243. Deaths hit record

  
Analysis, COVID-19
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The latest data from Florida

  • Cases rise 2.1% vs 2.6% prior
  • Cases 9243 vs 8886 yesterday
  • Median age 42 vs 43 yesterday
  • Positivity 11.69% vs 11.37% yesterday
  • Deaths hit record 186
  • Hospitalizations down 75 in past 24 hours
Positivity has been trending lower in part because of better reporting, but the trend has been higher in the median age (yesterday was a peak). With more elderly people getting it, a rise in deaths isn’t a surprise.

Timing vs. Price

  
  Analysis
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Probably one of the biggest hurdles most traders are struggling with is their obsession with entry prices. You will often hear people brag about their entry price and how they picked a bottom. You mostly never hear them talk about their overall performance. Let alone the bad trades they made. Throw a few darts – you’ll be lucky every now and then.

 

Here is an example to show what I mean. One of the stocks I plan to enter is PCX – Patriot Coal. It is on my public list and I’ve annotated it. What I am looking for is a flag pattern to develop. If we get one – and right now it looks like PCX is indeed starting to build one – I will be watching it very closely. I will watch for clues if my entry rationale is still valid. Is price retreating in orderly fashion? Is volume decreasing during the consolidation?

So what about price? Does it make any difference if I buy at 9.00 or 8.50 or 8.00? You guessed it. I couldn’t care less. If the pressure is there and the stock is acting right I want to buy. If my timing is right I will make money. My entry price won’t matter.

Timing is more important than price!

US’ Fauci: Cautiously optimistic that vaccine will be available by late fall

  
  Analysis

Fauci says that he has not misled the public under any circumstances This comes after Trump retweeted posts yesterday calling Fauci a fraud and that he has misled the public on the whole virus situation. As much as Fauci has had some good standing when it comes to the coronavirus saga, the vaccine remarks are pretty much a recycle of what you would expect from an official in the Trump administration at this point in time. US futures not really paying much attention to this as they are still down ~0.3%. The market is keeping cautious ahead North American trading today, with the dollar slightly ahead but gains are relatively mild after a stronger showing earlier in the session.

UK think tank says unemployment will reach 10% this year

  
  Analysis
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UK think tank, NIESR, comments on the UK economy

UK
  • Sees unemployment rate hitting almost 10% this year due to “premature” end to the government’s furlough program
  • Says government is making a mistake by cutting furlough program in October
  • Says that increases the risks of economic scarring
  • Forecasts UK economy to shrink by 10.1% in 2020, before growing by 6.1% in 2021

That is one take on the whole situation but if the health crisis gets worse in the coming months, who is to say that the UK government would not use that as an excuse to keep the furlough program running until the year-end.

For now, a lot about UK economic data – especially in relation to the labour market – is largely masked by the fact that the government’s furlough program is in place.
We will only get a better idea of how the economy is standing on its own two feet once the program expires. Things may be looking “good” for now but should there be substantial layoffs to come, it could lead to a bigger hit to the economy down the road.

Nikkei 225 closes lower by 0.26% at 22,657.38

  
Analysis, Global Indices

A mixed session for Asian equities

Nikkei 28-07
Japanese stocks climbed earlier but amid a pullback in gold, the risk mood sort of adjusted a little in trading today as Asian equities also pare some of its earlier gains.
The Nikkei is finishing the day lower while the Hang Seng and Shanghai Composite are both sitting up by ~0.4% currently. Elsewhere, S&P 500 futures are trading at flat levels after having observed about a 14 points gain earlier in Asia Pacific trading.
In the currencies space, the dollar is keeping slightly firmer but gains aren’t really too significant for the time being. EUR/USD is lower at around 1.1740, while USD/JPY is hovering close to 107.50 as we look towards the start of the European session.

Tokyo reportedly finds 266 new coronavirus cases in latest update today

  
  Analysis
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NHK reports on the latest virus situation in the Japanese capital

That just reaffirms the narrative that the low count from yesterday was largely skewed by the ‘weekend effect’ and the fact that there was a long weekend in Japan.

The virus trajectory in Japan has not been encouraging since the start of the month, with the spread of infections already surpassing that seen during the initial outbreak. As of yesterday, Japan has recorded over 8,000 active cases – the most since early May.

Japan
For now, the government is still maintaining that the situation does not call for any extraordinary measures to curb the spread of infections but let’s see how long they can keep at this with the Olympics next year a key focus as well.

Fitch has affirmed China’s rating at ‘A+’ with a stable outlook

  
Analysis, Economy

The agency has a very modest outlook for 2020 GDP for the country, forecasting real GDP at +2.7% this year

  • Says the economy is making a remarkable recovery
Chinese authorities are in a position to enforce quite draconian lock down measures if needed, which does help stem the spread of the infection when needed. Not a step that can be taken in many other countries to the same extent.
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