Records vs anti-records and the start of the earnings season
Nowadays financial markets are filled with controversial information. This causes mess. For example, based on the results of yesterday, we can say that the worst for the world economy is over and it is confidently moving towards pre-pandemic levels. This conclusion is based on the trade balance data from China, which showed that the country imported and exported a record amount of goods in yuan-denominated terms in September.
On the other hand, we can say that the second wave of the pandemic is dragging the world economy to the bottom, recorded following the first series of lockdowns. We are talking about data from ZEW: the level of economic sentiment in Germany fell sharply and reached the lowest level since May 2020. To prove this we can add the maximum drop in employment in the UK over the past 11 years reported yesterday.
Or take, for example, the start of the earnings season in the United States. On the one hand, banks (JP Morgan and CitiBank) showed financial results that were much higher than analysts' expectations (especially profits). On the other hand, revenues turned out to be almost 10% lower than in the second quarter, and in the case of CitiBank, they even came out one of the weakest in the last twenty quarters.
Thus, the interpretation of information directly depends on the angle of view. Our position remains unchanged so far: we consider China rather an exception to the general rule. And the general rule is that the world is going through one of the worst economic crises. And during crises, if the stock market is not at the bottom, you have to sell stocks.
Oil sales in this light are still in charge. As well as in the light of the latest forecasts from the International Energy Agency, which note that the pandemic has led to the transformation of the oil market. Mostly it concerns demand: its growth estimates continue to downgrade.
On the other hand, we can say that the second wave of the pandemic is dragging the world economy to the bottom, recorded following the first series of lockdowns. We are talking about data from ZEW: the level of economic sentiment in Germany fell sharply and reached the lowest level since May 2020. To prove this we can add the maximum drop in employment in the UK over the past 11 years reported yesterday.
Or take, for example, the start of the earnings season in the United States. On the one hand, banks (JP Morgan and CitiBank) showed financial results that were much higher than analysts' expectations (especially profits). On the other hand, revenues turned out to be almost 10% lower than in the second quarter, and in the case of CitiBank, they even came out one of the weakest in the last twenty quarters.
Thus, the interpretation of information directly depends on the angle of view. Our position remains unchanged so far: we consider China rather an exception to the general rule. And the general rule is that the world is going through one of the worst economic crises. And during crises, if the stock market is not at the bottom, you have to sell stocks.
Oil sales in this light are still in charge. As well as in the light of the latest forecasts from the International Energy Agency, which note that the pandemic has led to the transformation of the oil market. Mostly it concerns demand: its growth estimates continue to downgrade.
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