Week in a Glance: NFP, pandemic, best quarter, etc.

6. Juli 2020

The main event of the past week was the publication of data on the US labor market. The NFP data came out very impressive: + 4.8 million with a forecast of +3 million. But the overall minus in NFP since the start of pandemic is still about 15 million and it is already obvious that it is unlikely to be able to level it before the end of the year. And this means that there will be no quick economic recovery.

One of the factors contributing to this is the second wave of epidemic un the US. More than 50K new cases per day is a serious reason for concern. As a result, a number of states are tightening measures with all the ensuing consequences for the labor market and the economy as a whole. U.S. chief infectious disease specialist Anthony Faucci announced the figure of 100K new cases per day in the nearest future.

Last week was marked as the best quarter for the US stock market over the past few decades. We have already noted that this happened just before the dot-com bubble collapsed, as well as before the stock market crash in 1987. So, this is not a cause for joy, but rather an extremely alarming signal.

Tesla bypassed Toyota in terms of capitalization. Which, in our opinion, is a clear sign that the markets have totally lost their minds: Tesla produces 25 (!) times less cars than Toyota, and its revenue is 10 (!) times less. In general, it's time to sell Tesla , while there are still crazy people buying it at $ 1,200 per share.

The Brexit talks again ended with nothing. So, pound sales this week remain our basic trading idea for the FOREX. As for the general trend in the positions, we will give preference to purchases of the dollar, first of all against the Australian and Canadian dollars.
In the stock market, we will continue to look exclusively for sales opportunities as well as in the oil market.

As for the upcoming week, it will be exclusively desaturated on fundamental events. By and large, this will be one of the last weeks of rest, the calm before the storm, which will almost certainly begin with the start of the earnings season in the USA and the publication of US GDP data for the second quarter.