Week in a Glance: GDP, FED, US stimulus, earnings peak

3 Agu 2020

Last week was the peak of the earnings season in the United States. On the one hand, tech giants have shown that not for all pandemic is a loss and the threat of bankruptcy. But on the other hand, the overwhelming majority of companies are losing revenues at a double-digit rate, and many at the same time record billions in losses at the end of the quarter. So, the current earnings season, despite some success so far, is one of the most disastrous in modern history.

An even more depressing picture in this regard was detected in the dynamics of US GDP (-32.9% - the maximum drop in the entire history of observations). The situation in the Eurozone and Germany is somewhat better, but even there the rates of decline turned out to be double-digit and the highest in the entire history of observations.

In general, the data is more than conducive to take profits in the stock market and to start a full-fledged correction.

Last week was marked by record prices for gold, which almost reached $ 2000 per ounce. Again, the fundamental background was at its best, especially when you consider that the pandemic in the world cannot reach a plateau in any way and the number of new cases of diseases is very close to 300K per day.

The dollar in the foreign exchange market was under strong pressure all week (except for profit taking Friday). The Fed is partly to blame for this: the Central Bank left the parameters of monetary policy unchanged and made it clear that ultra-soft monetary policy in the United States is for a long time. In addition, the permanent failures of negotiations between Republicans and Democrats over a new stimulus package for the United States, coupled with Trump's provocative tweet about the delaying of the Presidential election, only worsened the already gloomy fundamental backdrop around the dollar.

In terms of news, the upcoming week will be quieter, but still very eventful - the data on the US labor market, as well as the announcement of the results of the Bank of England meeting would be the headliners.