Tendencies in the equities market might display an overall behavior for the assets.
Tendencies in the equities market might display an overall behavior for the assets.
Dollar performance this week might be a pattern.
It is a known fact that financial markets move according to the pattern up-down-up-down and that there is no reason to fear the falls because they are the natural process just like the growth. except that the falls are usually associated with the losses of assets and trust towards a certain financial instrument. And right now we see the said pattern happening to dollar as the greenback was high and mighty just two-three weeks ago and this week is market by a 0.9 percent loss.
But the scary part is not the dollar movements right now even though they certainly attract a lot of attention. It is the fact that these movements might be a pattern to overall situation in America right now. It is easy to say that everything American is overvalued, including their national currency and their stocks and indices. So if you see the up-movement for the American stocks don’t be surprised but also don’t get your hopes up.
American stock market is of a very high price right now. But there is a chance that we haven’t seen the last of the growth just yet. There is a possibility that it is going to grow even more before going down. And they higher it grown the harder would be the impact from the fall. There is also a very huge danger coming from the Chinese-American trade tensions as not a lot of traders and investors are going to continue doing business with international bully.
Why is American economy doing so well? We would say it is because Trump runs the country the same way he would run a business – he lowers the taxes and plays to defeat the competition. And it seems that the markets love an approach like that. But for how long? And what would happen when the next president comes along and repels all of the changes done by Trump at this point?
If markets are doing so well under Trump, why are we so worried? Well, because his measures are far too extreme in order not to have very serious consequences in the political and financial world. And sooner or later Trump’s actions are going to lead to crash of American stock market. Then we are going to have a lot of troubles.
Watch oil prices closely.
For the next week we advise to watch oil prices very closely and to be extremely cautious with oil trading. Output troubles might be on our way.
First of all, there is huge hurricane that approached United States coast and hit oil extraction spots along US coast. That was the reason behind the growth for WTI oil prices this week. Although some losses were experienced by the crude, overall gain that brought a barrel of WTI extremely closely to $70 per barrel price was met very good by traders.
There is also a production gap that has to filled by the countries, members of the Organization of Petroleum Exporting Countries. The decision of the Organization is to be presented fairly soon and it is likely that it is going to include boosting the output numbers which of course is going to change a per-barrel price for every crude.
Global oil producers have been struggling to persuade OPEC to up the oil output numbers for several months. And although OPEC committee always does just that there is always a higher point the oil producing countries want to reach. What is up with that? Well, right now it is to balance out the losses that would be experienced by world’s output.
American sanctions to Iran are going to kick in in November. If by that time there is no decision on the output growth, prices for the crude are going to surge beyond $80 per barrel point which is pretty crucial to the whole industry. With trade war looming over our heads we would assume that volatility level is not going anywhere as well. Although Trump claims that he has the situation under control it is only natural for us to doubt that statement.
Overall the situation can be explained with one word – uncertainty in the future prices for crude. And we all know that that is just something oil can’t really stand. It is not clear whether we are to expect huge growth or horrible losses. Which is exactly something we need to know right now.
In the meantime, the US have surpassed Russia in output numbers for the first time since 1999 and have now become the biggest oil-outputting country in the world.
Trump presidency might be coming to an end.
With all of the problems and controversy surrounding Trump’s presidency it is only natural that people of the world will wait for it to end earlier than his term runs out. And that is just something that is hanging over our heads. But that is all politics. How does that concern us traders? directly we would say.
Look at the situation in the world. Do you feel comfortable trading in the situation as unstable as it is right now? Looking for more stability? Us too, friends, us too. Trading has become dependent on one man only – Donald Trump. With his company never going public and staying inside Trump family it is only natural that he doesn’t care about what the situation is like on the outside. But there is only one of him and there are a lot of us.
All over the world markets, though always dependent on each other, right now are looking very vulnerable and ready to tip over any minute. Of course that doesn’t mean that we should stop everything we used to do and keep doing now and sell everything off. That would only undermine the situation. But all of the uncertainty might be very close to an end as the clouds above Trump’s head are getting thicker and thicker.
Those, following political situation in the world might have noticed that Trump is losing against his own supreme court that is now moving closer and closer on the answer on Russian meddling in American elections. And seeing how together with that Trump wants to be friends with Putin it is not an appropriate situation for American people.
So, we already see how Trump’s presidency influence trading right now. How will his possible impeachment influence it? And again we wouldn’t say that the effect would be all positive after that one. In case of such raped political changes all of the focus of the world society would entirely shift to the Unites States and dollar, totally forgetting about other assets. And that is the real danger of a situation like that.
We have to face it and make our peace with the fact that for now trading and politics is virtually the same thing. Can the situation change? Of course. Will it? Not is the nearest future.