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Macro overview of the current week Injection for markets

Macro overview of the current week Injection for markets

11 November 2020

Injection for markets

A really big deal happened on Monday this week. Which can serve as a guideline for investors in the near future. An injection of optimism for global stock markets was the news that the vaccine developed by BioNTech and Pfizer has passed the third phase of trials and will be ready for registration in November.

Above all, the sectors most affected by quarantine and isolation have risen, with shares in aircraft engine maker Rolls-Royce up 45%. The International Aviation Holding, formed as a result of the merger of British Airways and Iberia, also rose 40%; British low-cost airline Easyjet – by a third.

Key indices on the New York Stock Exchange showed rapid growth on Monday. At the time of the opening, the Dow Jones Industrial Average climbed 5.21%; the S&P 500 index rose by 3.82%; the index of the electronic exchange Nasdaq – by almost a percentage. The cost of November futures for WTI crude oil rose by 10.20%.

The main index of the Frankfurt Stock Exchange DAX, which includes the 30 largest public companies in Germany, has grown by more than 4.5%. The news about Joe Biden’s victory in the US presidential election also added optimism to investors: “Today in this trading floor we say that it’s time for Joe,” said Robert Halver, an analyst at Baader Bank. “We have a clear result, and this to Trump It will not take away from us. Geopolitically, everything will calm down, trade wars will subside, the US will strive for peaceful coexistence with China. European and especially German exporters are very happy, I am sure that some of the Board members drank champagne today! “

One of the rare losers of the day was Zoom, an audio and video conferencing platform that allowed millions of quarantined people to communicate virtually. After news of the imminent registration of the vaccine from BioNTech and Pfizer, its shares plummeted by 13%.

Thus, the potential registration of a coronavirus vaccine could already influence investor expectations. Despite the fact that it takes much longer to vaccinate the population.

Moody’s upgrades Greece’s rating and affirms Italy’s rating

Recently, the economies of a number of European countries are experiencing a large-scale crisis. The main cause of which was the coronavirus pandemic. However, investors are still interested in the potential income that investments in a number of European countries can provide. In this case, the reports of international rating agencies serve as a good guide for them. Thus, the international rating agency Moody’s raised the long-term ratings of Greece in foreign and local currency to “Ba3” from “B1”, and also affirmed the ratings of Italy at “Baa3”. The outlook for the ratings of both countries is “stable”.

The agency’s experts note that ongoing reforms in Greece are contributing to a steady improvement in the institutional environment and have already provided tangible progress in the areas of tax administration, compliance and the fight against corruption.

“The outlook for economic growth in the country for the coming years is favorable, despite the negative impact of the coronavirus pandemic, mainly on the tourism sector,” Moody’s said in a press release. “The Greek economy will benefit from the measures taken to improve the investment climate and the influx of very large European funds. Improved growth prospects coupled with a prudent fiscal approach will lead to a gradual reduction in public debt. “

Commenting on the confirmation of Italy’s ratings, Moody’s said the country’s economy is likely to recover from the deep crisis caused by the coronavirus pandemic in the first half of next year.

The renewed increase in the incidence may delay the recovery of the Italian economy, but the stimulating monetary policy of the European Central Bank and the funds that the country will receive from the European aid fund will provide the necessary support to the economy in the coming years, the agency said in a press release.

Thus, despite the current crisis, investment in these countries is still a good solution for investors.

The future of US-China relations

Under President Trump, relations between China and the United States have fallen on hard times. What will happen when the new President Joe Biden comes to power in the United States? Chinese state media on Monday were optimistic about Democrat Joe Biden’s victory in the US presidential election and reported the possibility of increasing predictability in relations between the two countries, including in the field of trade.

State newspaper Global Times reported that while the United States is unlikely to ease pressure on China over Hong Kong and Xinjiang Uygur Autonomous Region, Beijing should try to establish dialogue with the Biden administration.

The Trump administration deliberately created tensions in Sino-US relations, especially after adopting a strategy to pressure China during the election campaign, which led to the emergence of “bubbles” in US-China politics, the newspaper writes.

“We think these bubbles can burst,” the newspaper said.

“A softer and more manageable Sino-American relationship is in the common interests of the people of both countries and the international community.”

The China Daily reported in an editorial that it is “clear” that improving relations with China can start with trade, and revitalizing trade negotiations is critical to restoring mutual understanding and trust in Sino-US relations.

“This is one of the last threads linking both sides. It is worth noting that neither Beijing nor Washington dared to abandon the so-called first phase (trade) agreement that they entered into,” writes the country’s official English-language newspaper China Daily.

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