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NASDAQ: What Forex Traders Need to Know

It is possible to invest in Nasdaq in a simple way, both in the general market (through an index) and in individual stocks. Just choose the financial instrument that best suits your needs and open an account with a broker. Nasdaq is the name of a financial market, usually associated with technology, but why? What advantages […]

It is possible to invest in Nasdaq in a simple way, both in the general market (through an index) and in individual stocks. Just choose the financial instrument that best suits your needs and open an account with a broker. Nasdaq is the name of a financial market, usually associated with technology, but why? What advantages […]

It is possible to invest in Nasdaq in a simple way, both in the general market (through an index) and in individual stocks. Just choose the financial instrument that best suits your needs and open an account with a broker. Nasdaq is the name of a financial market, usually associated with technology, but why? What advantages does this have? One of the most important questions is, how is it possible to invest in this market?

What is Nasdaq?

The term Nasdaq is an acronym. It corresponds to the National Association of Securities Dealers Automated Quotation (National Association of Securities Dealers Automated Quotation). It is a market; a stock exchange. The largest in the United States behind the NYSE (New York Stock Exchange). This market also has its own representative indices, and they also adopt the name Nasdaq (which we will see shortly). It is worth noting that the Nasdaq Stock Market does not have a physical location (such as the New York Stock Exchange parquet), but is based on a telecommunications network.

The birth of the Nasdaq, as a stock market, takes place when the Securities Exchange Commission (SEC), the US stock market regulator, asked the National Association of Securities Dealers (NASD) to regulate the OTC (Over The Counter) market in the ’60s.

To give us an idea, before the Nasdaq saw the light of day, in the United States, the stocks of companies could be bought and sold in three ways:

  • At the New York Stock Exchange (NYSE)
  • In the American Stock Exchange (AMEX)
  • Outside a stock exchange (OTC market; “over the counter”: agreements between two parties, outside an official market)

Buying and selling OTC stocks is not illegal, however, neither are all the guarantees of security, transparency, liquidity, etc. Therefore, the SEC called for a better organization. This led to the automation of the market (by the NASD), which has already been discussed and, thus, the NASDAQ was created in 1971. But there was a question that did not end up pleasing: it was still an OTC market and therefore a second category market. The companies listed in the same began in this way because they could not access the “real parquet”. In other words, his ambition was to go on the AMEX market and, as a climax, enter the NYSE (the largest stock exchange).

In order to have the opportunity to be listed on the stock exchange, different companies must meet a number of requirements. However, the conditions imposed by the NYSE are very strict and make it difficult for young companies to access. In this way, many companies started trading in this new market. These were mainly technology firms and, for this reason, the Nasdaq has always identified with technology. Its fully electronic operation also influenced the attractiveness of companies belonging to this sector.

But the National Association of Securities Dealers Automated Quotation (NASDAQ) was not willing to be a “second-class” market. Thus, in 1975, it developed its own listing rules and separated the stocks of stronger companies from the OTC. In 1982 the most powerful companies of the Nasdaq split up and created the Nasdaq National Market. Finally, in 1991 stock market regulators recognised the stocks of Nasdaq companies as equal to those listed in AMEX or NYSE.

Currently, this market is operated by the company Nasdaq Stock Market (later privatized). In addition, it is par excellence, the market where technology companies (electronics, biotechnology, telecommunications, computing) are listed. Companies such as Microsoft or Intel are listed on this Stock Exchange. On the other hand, its popularity came from the hand of the great Internet bubble, in the 90s.

We should look at all the listed companies, analyse them one by one and make an average of the movements they have experienced individually. In this way, we will have an idea of whether the market, in general terms, has behaved bullish or bearish. But there is a simpler way: take a set of the most representative stocks and, through an average (weighted, in most cases) of the share price, check their evolution. This is precisely a stock market index.

As we discussed earlier, investing in an index is like investing in the market as a whole. In this case, investing in a Nasdaq index is investing in a basket of securities composed of a number of more representative Nasdaq companies: Follow the evolution of an entire market.

Nasdaq 100: The Nasdaq 100 index was created on 31 January 1985 and is made up of the 100 largest technology companies listed in the Nasdaq Stock Market (actually there are 103, since 3 of the companies that make up the index issue two classes of stocks). It does not include stocks of financial companies (nor those dedicated to investment); for this reason, the Nasdaq 100 represents the technology sector well. The Nasdaq Stock Market is open to both US and foreign firms (since 1998). In this way, this index reflects the performance of the 100 largest companies in the technology industry in the world.

Nasdaq Composite: This index is composed of all companies listed in the Nasdaq market. In this “Electronic Stock Exchange” are traded securities of more than 3 thousand companies. It may include stocks of financial, investment and technology companies in general.

Nasdaq Biotechnology: Nasdaq Biotechnology is part of the pharmaceutical and biotechnology companies listed on the Nasdaq Stock Market (and only listed on this market), as well as other requirements).

Nasdaq Financial: includes all financial companies that have been excluded from the Nasdaq 100.

Why Invest In Nasdaq?

Not all stocks listed on the Nasdaq are purely technological. But this market has a strong orientation to that sector. In the Nasdaq 100 index, technology has a weight of 54%. In it, we can find the leading companies in this industry worldwide. The good evolution of technology firms has traditionally been associated with an expansive phase of the business cycle. However, because of the great social changes we are experiencing, technology is increasingly present in our lives.

Technology has a real application in any aspect of our day today. Just to mention a few examples:

  • Transportation (vehicles increasingly equipped in comfort and safety).
  • Telecommunications (social networks, new forms of leisure and information, B2C, B2B, 5G, etc.).
  • Health care (robotics, biotechnology, etc.).
  • Financial services (electronic banking, Fintech, Robo advisors, Blockchain and cryptocurrencies, etc.).
  • Computer science (home automation, cloud computing, artificial intelligence, big data, etc.).

Although some analysts and investors talk about the possibility that a bubble could be created by the growth experienced by this sector in recent years, The fact is that the profits registered by technology companies and the progress they can experience cause the value of this type of company to also be increased.

Many companies in this sector are in the top 10 of the largest companies in the world:

  • Apple
  • Microsoft
  • Amazon
  • Alphabet (Google)
  • Alibaba
  • Facebook

So, it’s very possible that we find solid values, rich in liquidity, and with a good balance sheet position in the technology sector.

Technology companies have also always been associated with volatile securities. This is partly true: the volatility of this sector, little by little, is being equated with that of more mature ones; they no longer have the risk potential of the 1990s and during the year 2000 (when the “dot com” bubble burst).

To sum up: this is an industry with growth potential. The disruption caused by technology is causing a change in this type of company. We can no longer talk about a high-risk sector as a whole; it has stable companies.

In any case, technological companies are characterized by the need for constant innovation, the quality of management is a factor that should be studied. These are high-growth values. Good management can make a difference (and turn a company into the new Facebook or Netflix). Just remember that “Resources must always be allocated in the most efficient manner!”

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Forex Market

Where Forex is Headed Over the Next 5 Years?

This is one of the most common questions people are asking the experts. Luckily no one knows for sure, otherwise, forex would not be very interesting. Predictions are not a good trade, people get it wrong most of the time. Still, if we collect some facts about the market now, one might get it right. […]

This is one of the most common questions people are asking the experts. Luckily no one knows for sure, otherwise, forex would not be very interesting. Predictions are not a good trade, people get it wrong most of the time. Still, if we collect some facts about the market now, one might get it right. […]

This is one of the most common questions people are asking the experts. Luckily no one knows for sure, otherwise, forex would not be very interesting. Predictions are not a good trade, people get it wrong most of the time. Still, if we collect some facts about the market now, one might get it right. You have to ask yourself though, would you make a decision based on a prediction that is more likely to fail? 

Forex Traders’ Way

If you ask a forex trader what will happen in 5 years, get ready for a disappointing answer. They do not know, and they do not care really. Traders know better. They have their strategies and systems that say some asset is probably going this way. but not for the next 5 years. Traders do their thing intraday, daily, and on a weekly timeframe at most. There are simply too many events that could interfere with some asset. At the end of the day, it does not matter what will happen in 5 years as long as they play the long game and play your strategy to the letter. It is how they have their share of profits.

Prediction Problems

The further we go into the future, the less predictable the outcomes are. To cover for this uncertainty, predictions get more broad or vague. If we say the bitcoin price at the end of 2025 is going to be $142500, would you bet on it? A mathematical model might give you this precise result but we all know it is a 99.99 (and then more nines)% miss. So we blend and say it is going to be higher than today. All this is based on some fundamentals, the rising crypto market, people-orientation to savings, pandemic, and so on. But no one knows if governments are going to ban crypto as the market gets bigger, we all know they do not like it.

On the other side, who knows it is the bitcoin that will perform the best out of all other, more advanced cryptocurrency concepts? Predictions are fun to listen to, but common sense says let’s spend our time finding or creating information that we can use today. 

Foretellers Way

There is a way you can use such predictions and make money, a lot of it. It is nothing new, get ready… TV. How many times have you watched smart people on popular TV news channels predicting and reasoning? Listening to them will probably set you on the losers’ side. These people have skills in analysis and presentation, but they are not good when it is trading time. To quote Ray Dalio from his “Principles” masterpiece “Truth be known, forecasts aren’t worth very much, and most people who make them don’t make money on the markets.” They make money by producing fun predictions people like to listen to, not to mention the media. 

Investors’ Way

Now let’s get to the fun part, how investors think and adjust to the fundamentals. Fundamentals play a key role obviously in how they make predictions. They do not go too far into the future, up to a year at most. We are not talking about the buy and hold forever saving strategies here of course, but analyze the state we are now at the end of 2020. Forex is interconnected with other markets, major players are the banks, governments, companies, and sometimes viruses. It is said COVID-19 just deepened the problems already present in the global economy. 

Present Time Directions

Here is a snapshot of how the currencies performed during this year:

US dollar became a questionable safe-haven for many reasons, the major one is the FED decisions and printing. The stimulus is evergrowing, however, little budge is seen in the economy fundamental measurements. 

If we speak about safe heavens, precious metals are not really in the focus. According to research, gold is about to boom in 2021, and likely to continue in the next years as the economy gets back on its feet. Aside from the supply and demand stats all pointing to a long-term bullish sentiment that stretches beyond 5-year prediction, gold is not on the big scene yet. Consequently, the US dollar is not the currency to hold in 2021 and probably not in 2022. Japanese Yen or even Euro is a safer asset at the moment, likely to strengthen their value in the coming years. 

Now, the pumping is not stopping. Today we have a record high equities level, despite the bad fundamental results with employment, spending, and general activity indicators. Something is definitely wrong with this chart:

The massive printing and stimulus policies are producing a scary storm below this peak, and as the forex market is a part of the global capital flows, equity correlated AUD and NZD might follow the ride down in 2021. Despite all this turbulence, forex hasn’t shown the turbulence a trend trader would like to see. Looking at the Euro VIX ($EVZ), the 2019 and partly 2020 are still calm for forex:

The reason behind this is the overall drop in economic activity, there is no spending or rushing to safe heavens, even though the bullish pressure is rising on the elemental values as stated above. 

We have another market to consider too, the crypto market that is taking its share of the money flow. Even though this is below a $trillion market, small compared to the enormous precious metals or forex, it is increasingly attractive to young, open-minded investors. It is regarded as a safe haven area since the DeFi concept sets crypto out of the crisis danger zone. 

They Know and Decide When

So, you have very good prediction info, and guess what, majors players know them too, and some more. Everything says there is something fundamentally wrong with the charts, they are not following the real world. Well, it is not because the big banks, governments, and other big figures decide when it is time to let go. The moment they are ready to let the storm out, they would try their best to knock (stop loss) every forex or equities trader out of their positions. A common chart pattern is an unusually large price move before it starts to strongly reverse. This move happened with the gold right before the pandemic unleashed and the bull trend base in March 2020.

Forex and other markets are not free out of control and there is no way around it. It is regarded cryptocurrency market is not in the same boat but rest assured governments have control over how this market will develop. Interestingly, more and more major companies will compete to set the ladder with their dominant currency. Facebook is one example of the Libra. Investors and companies increasingly consider crypto assets as the offset instead of the USD or other major. 

Investors’ Patience

The average guy listening to this is not really going to understand, but he might like the „conspiracy“ side of it. Investors know how the FED and the big banks think, the play hasn’t changed yet. History is repeating and so-called smart money stands by. Reversal positioning is not their play. Investors wait out for the sudden shakeout and wait for the market to settle in direction. The pause could be a week or two before they move in. They did not long the EUR/USD before 2020 US elections results, only after the USD started to weaken after the charts show it is time and the fundamentals are still in line with the prediction. 

Traders all deal with the prediction, with technicals and fundamental analysis. They protect their wealth with risk and money management. Prediction is actually what we do, but all professionals have a sound and consistent way of doing it. The title question is out of their scope as the answer will not be of any use to them. 

Categories
Forex Market

Are the Markets Ever Actually Wrong? (Hint, It’s Possible)

Price is everything. By observing the pound rally in October, you involuntarily begin to believe in the principles of technical analysis. You’d have to be a medium to understand what Boris Johnson was talking about during his visits to Brussels and Dublin. The talks were not in vain. Referred to as, “tunnel negotiations” they took […]

Price is everything. By observing the pound rally in October, you involuntarily begin to believe in the principles of technical analysis. You’d have to be a medium to understand what Boris Johnson was talking about during his visits to Brussels and Dublin. The talks were not in vain. Referred to as, “tunnel negotiations” they took […]

Price is everything. By observing the pound rally in October, you involuntarily begin to believe in the principles of technical analysis. You’d have to be a medium to understand what Boris Johnson was talking about during his visits to Brussels and Dublin. The talks were not in vain. Referred to as, “tunnel negotiations” they took place behind closed doors and there was hardly any hope of being able to observe the light at the end of the tunnel. However, even extrasensory powers do not guarantee that you become a rich man. Mediums could be the most honest people: the reason is that they never use their powers to win the lottery or win money on Forex.

If he stays too long by the river, sooner or later he’ll be fired. After a series of painful defeats and accusations of having exceeded their authorities, people generally fall into a stupor. But not the current head of Britain’s Cabinet. The idea of becoming the shortest prime minister in the entire history of the United Kingdom was not very seductive. Johnson knew: either you control the situation or the situation will end up controlling you. Critics, especially the most spiteful,  will always get the same answer from him:

– Boris, I think you’re wrong…

– Count again!

Led to a corner, the prime minister found a legal vacuum and common ground with Brussels. True, the game is not won right now, but your position is much better now. Johnson will find it difficult to get a majority in Parliament, as DUP is against the deal as it stands and Labour thinks it is even worse than the Theresa May deal. However, nothing seems impossible for the current prime minister. If he manages to get Britain out of the EU, he will take his place in history:

– Boris, will you accept apologies?

– No, just cash.

Looking at the pound chart, you don’t need to read the news. Its recovery was a clear sign of progress in the Brexit talks and its setback showed that investors were upset about something. They have been discussing the extension of the transitional period and the second referendum where the text of the current agreement with the EU can be presented. The British already tried to divorce the EU in 2016, why shouldn’t they bring the question to a successful end? It’s like in the river in winter. The thinner the ice, the more people want to make sure it’s strong enough.

Donald Trump is also confident that the markets know more than anyone else. The President of the United States knows with certainty that it is a small world. All because of the Chinese! He is talking about progress in US-China relations and is always full of optimism not to accidentally launch the S&P 500 correction. Trump believes the White House needs a strong economy and a strong stock market, while setbacks could make your risk of losing the elections held this 2020 more likely.

So does price really take everything into account? Shouldn’t we read the news and dwell on the peculiarities of fundamental analysis? Should we just look at the graph? If everything were that easy, mediums would make a lot of money on Forex. Certainly, history knows too many examples of the times when markets were wrong. For example, they predicted a recession in the US economy in 10 cases out of 5. Trading is not easy, but it is a very interesting activity!

Categories
Forex Market Analysis

Weekly Trading Strategy

Trading Set-Up for the Week
DAX

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Without taking a clear direction DAX is still going

Trading Set-Up for the Week
DAX

var tradingview_embed_options = {};
tradingview_embed_options.width = ‘640’;
tradingview_embed_options.height = ‘400’;
tradingview_embed_options.chart = ‘TDETWlsA’;
new TradingView.chart(tradingview_embed_options);

Without taking a clear direction DAX is still going

Trading Set-Up for the Week

DAX



Without taking a clear direction DAX is still going sideways. Regarding tehcnicals, it is approching the end of the recent weekly triangle it has formed. It should at least approach the top of it, where we may close the position. In terms of fundamentals they should support an upward movement as the corporate results and macroeconomic indicators remain solid.

US Dollar Index



US Dollar Index continues bouncing back and forth. Hence, for now we remain bullish after retesting the monthly bearish trend.

EURUSD



EURUSD continues its clears downtrend and just broke small weeklt support which even confirms strongly the strength of this bearish trend. So that, we remain bearish anbd still hold the short the position.

GBPUSD



GBPUSD drops and we hold the short. Continuies its clear downtrend without any relevant support in the horizon which confirms the long path of this short. For now we keep holding and waiting for the perfect moment to cash out.

USDJPY



After breaking a key monthly bearish down trend USDJPY and then retesting it, it has formed a clear breakout pattern which is taking time to take off. For now, we remain patient and wait for the continuation of the bull trend.

Crude Oil



The huge increase of concerns about inflation has mainly been due to Trump’s proteccionism and high oil prices. As tarde wars lower so has to do oil prices in order to lower concerns about inflation. From the technical side it remaind as clear breakout formation after the retest of the monthly bull trend.

 

 

Categories
Forex Market Analysis

Let’s Focus on the Real Deal

Weekly Update (August 6th – 10th)
Macroeconomic Outlook
Last week was intense with multiple central banks meetings, corporate results and many macroeconomic indicators. Anyway, the final outcome for the markets

Weekly Update (August 6th – 10th)
Macroeconomic Outlook
Last week was intense with multiple central banks meetings, corporate results and many macroeconomic indicators. Anyway, the final outcome for the markets

Weekly Update (August 6th – 10th)

Macroeconomic Outlook

Last week was intense with multiple central banks meetings, corporate results and many macroeconomic indicators. Anyway, the final outcome for the markets was mixed.

  • Good in the USA
  • Regular in Europe
  • Bad in China

Overall, after what has been happening in the last weeks, there will three key factors that will influence in the future.

  1. Protectionism from the USA and its relationship with China

Even though the comments from central banks were hawkish and the corporate results were solid along with the macroeconomic indicators, the protectionism concerns have increased with the last comments on tariffs influencing in a negative way the markets.

Trump commented how they were considering raising the tariffs from an initial 10% to 25% on Chinese goods which are worth around $200B.

–          This was what concerned the markets

–          This kind of news is impossible to anticipate

o   The key is that the tone of the conversation does not get worst

o   If this happens, markets will redirect their attention to the fundamentals will put on the side the trade concerns

  1. The second factor is the technology

There were some concerns regarding the drop from Twitter and Facebook. However regarding the reports from Amazon and Apple too, leads to thinking that what is happening is that the markets are turning more demanding and it is not worried about the valuation models.

  1. The last factor is corporate results

Not only from technology companies but from banks too, which they are turning out to be really positive.

–          Within Europe, UniCredit, Commerzbank, Adidas… will report results this week

And is it is as forecasted, it is expected that markets put aside their concerns about the USA-China relationship and focus more on the current expansive economic cycle and the strong results reported from the companies, retaking the bullish inertias.

Categories
Forex Market Analysis

More Results to Come, More Growth for the Markets

Weekly Macroeconomic Outlook (30th July – 3th August)

Last week was a really positive week for the markets.

Firstly, because of the Junker – Trump meeting
Strong quarterly results and

Weekly Macroeconomic Outlook (30th July – 3th August)

Last week was a really positive week for the markets.

Firstly, because of the Junker – Trump meeting
Strong quarterly results and

Weekly Macroeconomic Outlook (30th July – 3th August)

Last week was a really positive week for the markets.

  • Firstly, because of the Junker – Trump meeting
  • Strong quarterly results and macroeconomics inidcators
    • Mostly the American GDP which reached the 4.1% growth
  • Also, there was the ECB meeting where it was confirmed what it was previously stated in the previous meeting
    • No modifications
      • However, it gave a soft message and reiterated the importance of an accommodative monetary policy

This week, probably we’ll have again a positive tone in the markets.

  • As trade wars concerns have reduced
  • Furthermore it is a really intense week in terms of:
    • Quarterly results
    • Macroeconomic Indicators
    • Central Banks Meetings
  • Regarding corporate results, there are still a lot of companies left to publish
    • Apple, Tesla, BNP Paribas…
    • So far, in United States, 245 companies have already published
      • The average growth in EPS has been around 23% and 86% of the companies have break expectations
    • Moving to Central Banks, this week is going to be really intense too
      • 1st reference will be the FED with no modifications expected
        • Around mid-July Powell stated that two more rises in interest rates are expected in September and December in 2018 and three more in 2019
      • 2nd reference is the RBI (Reserve Bank of India) which, in this case, could really rise interest rates to 6.5%
        • It would be the second rise this year
      • 3rd reference is the BOE which is forecasted to rise the interest rates to 0.75%
        • Important to bear in mind that inflation has peaked to 2.4% and labour costs have also increased
      • 4rd reference is the Central Bank of Japan which is expected to continue with the same monetary policy however it can give a  harder message in terms of future expectations
    • Finally, it is also a very intense week in macroeconomic indicators
      • Forecasted results are rather positive

Wrapping all these factors up, it is expected a bullish week in the markets, especially indexes. Markets look good after a reduction in concerns on trade wars and protectionism plus solid quarterly results and macroeconomic indicators.

 

 

Categories
Forex Market Analysis

Markets’ Attention On Summer

Weekly Update (July 9th – 13th)

Macroeconomic Outlook
Summer is in focus now, and with it, the attention on the multiple factors that will condition whether it will be

Weekly Update (July 9th – 13th)

Macroeconomic Outlook
Summer is in focus now, and with it, the attention on the multiple factors that will condition whether it will be

Weekly Update (July 9th – 13th)

Macroeconomic Outlook

Summer is in focus now, and with it, the attention on the multiple factors that will condition whether it will be a good summer for the markets or a bad one.

Nevertheless, all these factors that unnerve investors are reaching a final outcome.

  • Last week, the markets performed better as the matters that block them improved slightly.
    • European policy and German politics have reached an outcome.
    • Then oil, which is still a problem.
    • And protectionism which is something more bilateral between China and USA rather than global.
      • When the market realises that, it will care less about it.

We were expecting a hard summer, however, the markets are starting to react in a positive way sooner than expected.

This week has three main references:

  • On Tuesday, the German ZEW Economic Sentiment which is expected to be negative again for the fourth month in a row.
    • It is relevant enough to watch out for but nothing especially important as the overall German economy has been increasing recently at 2.5% in the last trimester, which is really good.
  • On Thursday, there is US Core CPI which is forecasted to rebound from 2,2 to 2,3. This issue depends mostly on oil prices.
    • Over-inflated data may hurt bonds, nevertheless structurally it will not be a real matter which could be solved in 2 or 3 months.
  • And the third reference is American corporate results which start, among the big ones, on Tuesday with Pepsi Co.
    • And on Friday, three big banks publish results
      • Citi / +23%
      • JP Morgan / +30%
      • Wells Fargo / +11% and with some legal problems
    • They are expected to be really solid which will support markets.

Hence, this week looks like where a more positive sentiment towards markets can be consolidated.

  • German political turmoil looks clearer than before.
    • Even though it will come back in October with the elections.
  • Regarding oil, American pressures regarding an increase in production are graspable which will lead to Saudi Arabia producing more, and reducing oil prices.
    • This will reduce inflation related concerns.
  • Then, there is the protectionism which is mostly between the USA and China, being something more local rather than something global.
    • So that, when the market realises that along with strong corporate results, a good economic growth and a lot of liquidity, it will lead to an overall favourable economic cycle which will support the markets.
Categories
Forex Market Analysis

Global Markets Update

Markets continue to focus their attention on the same factors that have been the focus of attention for weeks. This has led to a continuous sideways move in most of

Markets continue to focus their attention on the same factors that have been the focus of attention for weeks. This has led to a continuous sideways move in most of

Markets continue to focus their attention on the same factors that have been the focus of attention for weeks. This has led to a continuous sideways move in most of the indexes during the last weeks. Hence, these factors such as the trade worries continue to influence negatively on the markets.

  • On one side, there is the commercial dispute between the US and China along with the EU.
  • On the other side, the evolution of energy prices and their potential impact on inflation figures.

This weekend, if everything goes as expected, Trump will impose tariffs which are worth over $35bn on Chinese goods.

  • A little bit more from the initial $50bn announced.

It is thought to be a measure to pressure the counterparty and gain a more favourable position in the trade deal.

  • The main problem with this is that it is a large procedure and one which does not look to end in the near future, and further to not finish before the mid-term elections in November.

These factors, along with the higher rate of interests in the USA and a stronger dollar, are hurting emerging markets.

  • Also bearing in mind that the Latin markets are being influenced by the political elections.
    • Recent elections in Mexico
    • Brazilian elections after summer

Thus, Chinese markets are suffering from all these. However more interesting is the 5% appreciation of the Yuan against the US Dollar in just one month.

  • This, on one side, indicates a lower growth expectation. However, it signals the way to free the trade war, through competitive devaluations.

On the other hand, the overall market is ignoring some positive figures like the ISM Manufacturing Index which was published last Monday and reached 60.2 points.

  • This indicates expansion and growth apart from reflecting on how the level of interest of investors is at February levels.