More than the real state of the stock market, hope stands upright

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The floor on the New York Stock Exchange is more than empty due to the new coronavirus, but investors’ interest in shares of American corporations (especially technology) is not waning. New York’s S&P 500 index is up eight percent this year, the Nasdaq is even up 20. Photo: Reuters

Investors were particularly pleased with the news that the pharmaceutical company Pfizer could apply for permission for the emergency use of the vaccine against covidu-19. Pfizer shares have risen v rose by almost four percent on Friday. Among the factors that have a positive impact on stock index movements are expectations that the US Congress will adopt a new package of incentives immediately after the election, which would maintain the high purchasing power of the US buyer. The main driver of the market is thus still optimistic expectations (especially the hope that 2021 will be much better than this year), and it seems that stock market players, despite all the difficulties of economies and record numbers of newly infected indifferent. Absolutely this, of course, is not the case, after all, it is a pan-European stock index STOXX 600 lost 12 percent this year.

The rapid spread of infections in Europe and also in North America has not bothered oil traders too much.  Looking at the whole week, there were almost no changes (or they were slightly positive).  Opec + increasingly fears that the insidious second wave of infections will be combined with the higher Libyan

The rapid spread of infections in Europe and also in North America has not bothered oil traders too much. Looking at the whole week, there were almost no changes (or they were slightly positive). Opec + is increasingly afraid that the insidious second wave of infections, combined with Libya’s higher “output,” will cause a significant surplus in the oil market next year. Opec + plans to reduce its production cuts, which currently amount to 7.7 million barrels per day, by two million barrels in January. Photo: Reuters

“Prime Day” record, luxury goods continue to be desired
At the end of last week, customers on Wall Street also gained courage after the publication of data on the 1.9% growth of American retail sales in September. v compared to August (and 5.4% v compared to last September). Analysts expected only a slightly better number than in August, when growth was 0.6% on a monthly basis. That consumption is increasing is even more important since v accounts for as much as 70% of the composition of US GDP. Amazon, meanwhile, said its “Prime Day” shopping holiday (October 13 and 14) was more successful than ever. The luxury goods market also remains strong. LVMH, a conglomerate that has brands like Louis under its umbrella Vitton and Dior, reported that she had v last quarter, its high fashion and leather products division grew 12 percent in revenue v compared to the same period last year.

69 percent of European government bonds with a negative interest rate
Not much new has happened in the bond markets. Demand for European government bonds, which are considered a safe haven, remains extremely high. Currently, as much as 69% of euro government bonds (v total value of more than six trillion euros) trades at a negative required return, v Slovenian bonds also belong to this group. In high – risk countries, where public debt is very high (Italy, Greece), a return to maturity just over 0.6 percent. The situation is perfect v in contrast to those in 2020, when Greek bonds fell so sharply that the required yield was already above 40 percent, even though Greek public debt was much lower then than it is today. In the US, the yield on a 10-year government bond has been between 0.5 and 0.8 percent since April, with the exception of a jump to 0.96 percent. v in early June.

Dow Jones (New York) 28,606 points (weekly change: + 0.7%)
S & P 500 (New York) 3,483 points (+0.2%)
Nasdaq (New York) 11,671 points (+0.8%)
DAX30 (Frankfurt) 12,909 points (-1.1%)
Nikkei (Tokio) 23,410 points (-0.9%)
SBITOP (Ljubljana) 839 points (+0.3%)
10-year Slovenian bonds required return: -0.12%
10-year U.S. bonds required return: +0.74%
EUR/USD 1,1719 (-0,9 %)
EUR/CHF 1,0715 (-0,4 %)
bitcoin

11.345 USD (-0,1 %)

naphtha brent 43,00 USD (-1,9 %)
gold

1.900 USD (-1,6 %)

evribor (six months) -0,497 %

Pfizer shares rose 3.8 percent on Friday, but are still down 3.1 percent this year.  Photo: Reuters

Pfizer shares rose 3.8 percent on Friday, but are still down 3.1 percent this year. Photo: Reuters

IMF: The recession will be a little less severe, beware of a larger stock drop
It’s an international fund v Tuesday, with a little more encouraging words, assessed this year’s performance of the world economy, but warned that v stock markets will suffer greatly in the coming months. The IMF now believes that global economic growth will be 4.4 percent lower this year (June estimate: -4.9%) and that coronary crisis it will not end blindly. Also v social distancing measures are expected in 2021, so the recovery will be long and uncertain, and stock markets could fall more sharply if the health crisis lasts longer than expected. “As long as investors are confident that monetary policy will support the markets, valuations will remain high, and there is a high risk of sharp declines if the recovery is delayed., ”wrote (referring to central banks, which will insist on record low interest rates for several years to come), wrote Tobias Adrian, head of the IMF’s money and capital markets department.

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