Another record for shares is looking like a high order for Tuesday, with futures falling after hopes of stimulus and high oil prices, prompting stocks to rise earlier in the week.
Although the momentum has slowed down somewhat, this largely unstoppable market generally allows few to hinder new maxims. So, a break that updates?
As for what could harm the stock market, our call of the day Global stock strategist Andrew Garthwaite and a team at Credit Suisse, offers a list of red and yellow flags.
“We kept the excessive weight in stocks based on a highly favorable policy, a high ERP [equity risk premium], the beginning of an exchange of bonds for shares and a huge excess of liquidity, while the tactical indicators are still not sending a sell signal ”, say the strategists.
For example, they are not very concerned with the “exuberance” of the market at the moment, as they say that retail flows are silenced and there is little systemic risk or signs of sale of other indicators.
Regarding your concerns:
-
Disappointing growth in Europe – medium and growing risk. A slow release of the COVID-19 vaccine, license plans and fiscal policy that seem less generous than the first time are a concern. Unlike the United States, European banks are currently making corporate loans and bankruptcies are being suppressed through default. “We see this as a problem of European equity, not a global one, with European GDP [gross domestic product] c.16% of the global GDP – although a tactically stronger dollar could be a consequence ”, says the team.
-
Less peaceful Federal Reserve – high risk in the second half of 2021. This is amid the potential for stronger US growth amid easier fiscal policy, pent-up pandemic demand and economic reopening. “If this happens at a time when inflation rises to 2.5%, wage growth is higher than expected and there are concerns about asset bubbles, the Fed may become less peaceful,” say Garthwaite and the team. . Also note the yields of the 10-year Treasury TMUBMUSD10Y,
1.155%
above 1.7% or with a sharp rise in the yields of TIPS (Treasury bills protected against inflation), they say. -
China’s slowdown – low to medium risk. The recent tightening of policy is nothing to worry about, but China’s current account could deteriorate further with the reopening of the global economy. Keep an eye on the housing market indicators, some of which point to a sharp slowdown. If that happens, “the excess leverage will start to dissolve, says Credit Suisse.
Elsewhere: “We see the possibility that vaccines will not work against low-risk mutations, especially since the modifications can be implemented in 3-6 months. Other low-risk events include fiscal stalemate in the United States Senate and policy errors (with the exception of UK tax policy and French slack, which we see as a greater risk), ”said the team.
Read: The stock market is echoing in 2009-10 – and that means a downturn may be close, analysts warn
The markets
ES00 stock futures,
YM00,
NQ00,
are modestly lower, with European SXXP shares,
in red. Asian markets rose after the record Wall Street session. Brent Oil BRNJ21,
is breaking new highs above $ 61 a barrel.
Bitcoin BTCUSD,
continued to climb, reaching $ 48,000 at one point, after electric car maker Tesla TSLA,
revealed a $ 1.5 billion investment in cryptocurrency and signaled it will accept bitcoin as future payments.
The tweet
Meanwhile, Tesla was apparently not as generous with the employees’ retirement plans.
The buzz
Canopy CGC, Canadian cannabis company,
reported a larger-than-expected loss, but revenue has exceeded estimates and stocks are rising. Materials and chemicals giant DuPont DD,
reported profit and sales exceeding forecasts. Social media messaging service Twitter TWTR,
(see preview) and Cisco CSCO technology conglomerate,
will report after closing.
Democrats on Monday released their plan to get more stimulus money from families, raising the current tax credit from $ 1,000 for a year to $ 3,000 and slightly higher for families with young children.
The parents of a trader Robinhood who died of suicide when facing a huge negative balance sued the online broker for manslaughter.
A small business confidence index shows that optimism has reached its lowest level since the pandemic began last spring. Job vacancies are also to come.
The World Health Organization says COVID-19 probably jumped from an animal to a human, not from a Chinese laboratory.
The impeachment trial of former President Donald Trump begins on Tuesday.
Random readings
Free ice cream and Russian vaccine COVID-19? Another prediction from “The Simpsons” comes true.
One Redditor asks how everyone is coping with pandemic depression, exhaustion and fatigue; he receives over 3,000 responses, most of which are unhappy.
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