Weekly Review: Testing the Bull Market (Read for Fundamentals)
This week should be more flat for the markets, consolidating and moving laterally. American technology companies are already in positive territory and they could bring with them the rest of the industries.
What could help the indexes to push the overall stock market are:
- Technology companies
- Central Banks
What could not help them:
- Manufacturing PMIs
- Pessimism and frustration with the virus
Regarding the positive factors, FAANG stocks will report earnings next week and this should provide some optimism and better results than ‘normal’ stocks. As commented in other reports, Technology companies are the new industrial stocks of the 21st century. Further, there is also a second factor, central banks get together and they still have more room for more stimulus. This comes in line to what it has been said before that the fundamental factor for the recovery from this virus will be the credibility of central to use unlimited resources. QE Infinity or the decision of the BOJ demonstrate that indeed this central measures are unlimited.
From the other side, PMIs from European countries are due to be published and they may bring some doubts and won’t help in the short-term, nevertheless, they are expected to recover as times goes through. The other negative factor is the frustration around the virus in terms of knowing when there will be a cure or we’ll be able to do normal life again. Gilead sciences failure has brought some pessimism to the markets. This can do some harm but not too much.
- Then, next week will be key to know if the markets weight more the positive factors to the negative ones and push overall the markets up consolidating the bull confidence.
What could help the indexes to push the overall stock market are:
- Technology companies
- Central Banks
What could not help them:
- Manufacturing PMIs
- Pessimism and frustration with the virus
Regarding the positive factors, FAANG stocks will report earnings next week and this should provide some optimism and better results than ‘normal’ stocks. As commented in other reports, Technology companies are the new industrial stocks of the 21st century. Further, there is also a second factor, central banks get together and they still have more room for more stimulus. This comes in line to what it has been said before that the fundamental factor for the recovery from this virus will be the credibility of central to use unlimited resources. QE Infinity or the decision of the BOJ demonstrate that indeed this central measures are unlimited.
From the other side, PMIs from European countries are due to be published and they may bring some doubts and won’t help in the short-term, nevertheless, they are expected to recover as times goes through. The other negative factor is the frustration around the virus in terms of knowing when there will be a cure or we’ll be able to do normal life again. Gilead sciences failure has brought some pessimism to the markets. This can do some harm but not too much.
- Then, next week will be key to know if the markets weight more the positive factors to the negative ones and push overall the markets up consolidating the bull confidence.
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