Archives of “September 29, 2020” day

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European shares end the session lower.

  
Analysis, Global Indices

Spain’s Ibex leads the move to the downside

The major European indices spent most of the day in the red. France’s CAC and Italy’s FTSE MIB with the only indices to extend into positive territory intraday. However both are ending lower.

A look at the provisional closes shows:
  • German DAX, -0.4%
  • France CAC, -0.3%
  • UK’s FTSE 100, -0.4%
  • Spain’s Ibex -0.9%
  • Italy’s FTSE MIB, -0.4%
In the European debt market, the benchmark 10 year yields are ending lower. The German 10 year is trading down -1.3 basis points. Italy’s yield has fell by -4 basis points.
European yields are lower
In the forex market, the AUD remains the strongest of the majors, while the CAD as moved to the weakest.  Crude oil prices are moving sharply lower with the front contract down over 4%. That is helping to pressure the CAD in trading today.
The US dollar remains a weaker vs. most of the major currencies with the exception of the JPY and CAD.

Fed’s Harker: US employment won’t recover until 2023

  
  Analysis

Comments from Harker:

  • GDP growth unlikely to reach pre-COVID pace this year
  • Urges congress to consider additional support soon
  • Continued growth depends on slowing virus spread
 On the stimulus front, Pelosi and Mnuchin are making one final push for a stimulus. Deal they have talks planned today after she unveiled a $2.2 trillion plan on Monday.
The pared-back legislation would include another round of $1,200 stimulus payments to certain individuals under an income threshold, more money for the Paycheck Protection Program for small businesses, more aid to the US Postal Service, $75 billion for coronavirus testing and contact tracing, as well restoring the $600 a week additional unemployment assistance that expired in July. After pushing a plan for roughly $1 trillion in state and local aid in the last proposal, an idea roundly rejected by the White House, Pelosi and Democrats are now proposing $436 billion for state, local and tribal governments over one year.

Telsa: Lithium phase

  
  Analysis

The impact of Tesla’s deal with Piedmont Lithium

FBS1

This is the stock price performance of Piedmont Lithium – and Australian-based company that extracts the metal essential for EV batteries. Tesla signed a 5-year deal to take lithium from Piedmont – in addition to its other plan to extract the metal in Nevada. Piedmont’s stock surged by almost 300%. Tesla’s stock is still in a downturn though.

FBS2
The daily chart below shows that Tesla is consolidating around the current level of $420. The heights of $500 were left in the dust a month ago but may turn into a bullish target soon – once we see the downtrend capping the upside broken. In the long-term, it’s unlikely that Tesla will go down because fundamentally, it keeps expanding its horizons. Even though its P/E ratio is way beyond 20 as Warren Buffett liked to warn, the business outlook for Elon Musk’s business looks positive and full of opportunities. And sales – including in China. So let’s wait where the bottleneck of the current fluctuation to exhaust and see where the stock goes.

FBS3

This post is written and submitted by FBS Markets for informational purposes only. In no way shall it be interpreted or construed to create any warranties of any kind, including an offer to buy or sell any currencies or other instruments. 

The views and ideas shared in this article are deemed reliable and based on the most up-to-date and trustworthy sources. However, the company does not take any responsibility for accuracy and completeness of the information, and the views expressed in the article may be subject to change without prior notice.

Common Psychological Fallacies on Risk and Probability

  
Analysis, Education
  • Tendency to overvalue wagers involving a low probability of a high gain and to undervalue wagers involving a relatively high probability of low gain.
  • Tendency to interpret the probability of successive independent events as additive rather than multiplicative.
  • Belief that after a run of successes, a failure is mathematically inevitable, and vice versa (aka Monte Carlo fallacy).
  • Perception that a favorable event has higher probability over an unfavorable event even though their mathematical probability is the same.
  • Tendency to overestimate the frequency of occurrence of infrequent events and to underestimate that of comparatively frequent ones after observing a series of randomly generated events.
  • Confuse the occurrence of “unusual” events with the occurrence of low-probability events (e.g. getting 13 spades is just as probable as getting any other hand).

How People Lose

  
Analysis, Education
  1. They personalize market losses.
    • It is easy to equate losing money in the market with being wrong. In doing so, you take what had been a decision about money (external) and make it a matter of reputation and pride internal). This is how your ego gets involved in the position.
    • You begin to take the market personally, which takes the loss from being objective to being subjective. It’s as if profits and losses were a reflection of their intelligence or self-worth.
    • External losses are objective facts, while internal losses are subjective and defined in terms of the individual experiencing it.
    • Market losses are external, objective losses. It’s only when you internalize and personalize the loss that it becomes subjective.
  2. Once a market position is personalized and it starts to show a loss, it is uncertain when or how it is going to end, leading a person to go through the five stages of internal loss while the loss gets larger.
    • Denial – Seeking second opinions and only listening to the ones that conform with your own denial
    • Anger – Getting angry at the market or others
    • Bargaining –  Bargaining to get out of the position if only it can go back to breakeven
    • Depression – Distancing yourself, losing interest in all things, unable to focus
    • Acceptance – Finally accepting and getting out of the position or getting forced out by margin calls

Its a big Tuesday ahead for Federal Reserve speakers –

  
  Analysis

Speakers from the Federal Open Market Committee (and other Fed officials)  are all during Europe and US time, here is the schedule if you want to keep it handy.

  • 1225 GMT Michael Held, EVP at the NY Fed speaks on LIBOR
  • 1315 Federal Reserve Bank of NY President Williams speaks from a prepared text at a UST Market conference. Not expecting a Q&A follow up to this.
  • 1330 GMT President of the Federal Reserve Bank of Philadelphia Harker speaks on … machine learning! Which may not yield much on his outlook for the economy nor policy, but there is a Q&A to follow which might be more fruitful.
  • 1540 GMT Federal Reserve Vice Chair Clarida moderates a panel discussion, the topic is ‘Future considerations for Treasury market resilience’.
  • 1700 GMT Williams again, this is a ‘fireside chat’ event, so basically a Q&A. Williams is rarely shy on expressing his views on the economy and policy.
  • 1700 GMT and also 1900 GMT Federal Reserve Vice Chair for Supervision Quarles will be speaking. First on regulation, the second on financial stability. Both will feature Q&A.
The boss man is getting the day off by the looks of it …
Speakers from the Federal Open Market Committee (and other Fed officials)  are all during Europe and US time, here is the schedule if you want to keep it handy.

US stocks close higher led by the NASDAQ index

  
Analysis, US Market

Nasdaq leads the way

The major indices closed higher across the board with the NASDAQ ending up leading the way.  The S&P and NASDAQ have now posted 3 days of higher closes.  All 11 sectors of the S&P closed higher.  The energy and financials led the rally today.   The Dow post the best day cents September 9
The final numbers are showing:
  • S&P index up 53.14 points or 1.61% at 3351.60
  • NASDAQ index up 203.96 points or 1.87% at 11117.52
  • Dow industrial average rose 410.10 points or 1.51% at 27584.06.
The NASDAQ closed close to its highs of 11120.79. The Dow industrial average however close around 138 points from its intraday high.
Big winners today included:
  • GoodRx, +9.31%
  • Boeing, +6.52%
  • Deutsche Bank, +5.5%
  • Delta Air Lines, +5.2%
  • United Airlines +5.06%
  • American Airlines, +3.91%
  • Whirlpool, +3.87%
  • Qualcomm, +3.49%
  • Tesla, +3.4%
  • Uber, +3.19%
  • Citigroup, +3.17%
Some losers today included:
  • Beyond Meat, -2.46%
  • Rite Aid, -2.2%
  • Zoom, -1.74%
  • Slack, -0.62%
  • Merck and Company, -0.16%
  • Walmart, -0.07%
  • Verizon, -0.03%
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