What does “Super Tuesday” mean for US investors?
Danielle DiMartino Booth, executive director of Quill Intelligence, a research company, said President Trump’s chances of being re-elected would be “noticeably less” if the Corona virus outbreak hit the US economy. That “opens the door to the alleged candidate at this point – Bernie Sanders,” she added.
This week’s “Super Tuesday”, which saw 14 states and one US territory compete for the Democratic President’s nomination, could consolidate Mr. Sanders this week after a year as the party’s leader Set of winnings in the last minor battles.
At least two sectors of the stock market, healthcare and energy, would “decimate” profits under a Sanders government because the candidate’s stated goals are to effectively eliminate private health insurance and nationalize energy exploration and production, Ms. DiMartino said Booth. Other sectors that could be vulnerable are financial stocks due to Mr. Sanders’ planned transaction taxes as well technology,
How Michael Bloomberg’s chances seem dwindleInvestors are also watching Joe Biden who shows character of a resurgence. A profit for Mr. Biden is seen by some as negative for the markets because he prefers an increase in the corporate tax rate.
The October Vix future, an indicator of stock volatility related to the presidential election, is now 3 points above its September counterpart. “This shows me that investors are very concerned about how November will develop,” said Stephen Aniston, President of vixcontango.com. Jennifer Ablan
How far could European stocks fall if the corona virus spreads?
European stocks, like the ones in the US and elsewhere, had theirs worst week since the financial crisis as a result of the spread of the corona virus. After a 13 percent drop in the Stoxx 600 index, a popular benchmark, investors wondered how bad it could be for a region that relies so heavily on exports to China.
Few investors are willing to quantify the potential impact, and this uncertainty exacerbates it market unrest, Part of the problem is that modeling the spread and economic impact of the virus is so difficult.
The 2003 Sars outbreak was often used as a template, but companies like First State Investments find that Sars has had limited impact on Chinese production and exports, while the country’s share of global GDP is now much higher. Oxford Economics parallels the Fukushima nuclear disaster in 2011, but notes that China’s share of global GDP is about three times that of Japan in 2011. In both cases, the impact on the European market was subdued.
Amid falling prices, fund managers try to reduce the risk of sticking to what they know and buy cheap stocks when they can, instead of trying to guess the bottom.
Didier Saint-Georges, member of the Strategic Investment Committee at Carmignac, a French asset manager, said it was difficult to assess the overall impact on European stocks. He prefers large-cap growth stocks whose earnings are likely to have less of an impact than small-cap value stocks.
Pieter Taselaar, fund manager at Lucerne Capital, a European hedge fund, believes that the markets are now “close to the point of maximum panic”. He used the sell-off to stock up on stocks like Belgian broadband provider Telenet, which he believes were hit too hard. Laurence Fletcher
What’s next with the gold price?
Gold recovered strongly this year, climbing up to 9 percent before being drawn into the deepening sell-off between markets late last week.
Was driven from a flight to “safe” assets due to the coronavirus The outbreak, a sharp downturn since Thursday, reduced yellow metal profits to about 5 percent to $ 1,589 a troy ounce since the beginning of the year.
The strength of the early gold surge had surpassed most analysts’ forecasts for 2020. Analysts had predicted an average price of $ 1,558, according to the London Bullion Market Association.
Gold was in favor of falling bond yields that reduce the disadvantage of holding gold with no returns at all. The 10-year U.S. Treasury yield reached one All-time intraday low of 1.147 percent last week.
Inventories of gold-backed exchange-traded funds have reached a record high of $ 3,018.8 tons, valued at $ 162 billion, according to the World Gold Council.
However, analysts found last week’s turnaround indicated that investors were willing to sell cash to meet margin calls for other investments.
The gold price fell more than 3 percent on Friday, the largest daily decline since 2013.
Still, gold has held most of its gains and should continue to grow this year as the market now expects the Federal Reserve to cut interest rates further, according to Suki Cooper, an analyst with Standard Chartered in New York.
“Safe haven profits tend to stop when the market is more likely to start pricing that a given negative shock will affect global growth and trigger a recession,” she said.