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Cinkciarz.pl, Cinkciarz, analizy walutowe, komentarze walutowe, marcin lipka, kurs franka, kurs dolara, kurs euroForex conotoxia.comhttps://invest.conotoxia.com/img/logo/podcast_itunes.pnghttps://invest.conotoxia.com/articles/rss/investment-research/commentsNext week to watch (3-7.02.2025)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-3-7-02-2025https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-3-7-02-2025Finally, January is over. With the Nvidia scare and the Fed decision behind us, markets could use a calmer first week of February. On Monday, investors will receive January’s preliminary inflation reading in the Euro Area, while the Bank of England will vote on the benchmark bank rate in the UK on Thursday. The newest job-related data in the US, including the non-farm payrolls and unemployment rate, will be reported at the end of the week.Table of Contents: <ol> <li><a href="#heading-scroll1">Euro Area Consumer Price Index (CPI) YoY (preliminary for January)</a></li> <li><a href="#heading-scroll2">UK interest rate decision</a></li> <li><a href="#heading-scroll3">US unemployment rate (January)</a></li> </ol>   <h3>Monday, 3.02,  11:00 CET, Euro Area Consumer Price Index (CPI) YoY (preliminary for January)</h3> In December 2024, the annual inflation rate in the Euro Area rose for the third consecutive month, reaching 2.4%, the highest level since July. This figure represents an increase from 2.2% in November, matching both market forecasts and preliminary estimates. The rise in inflation was primarily attributed to base effects, as last year's significant drops in energy prices are no longer included in annual calculations.  Inflation rates varied across major economies: Germany saw an increase to 2.8% from 2.4%, France's rate rose to 1.8% from 1.7%, and Italy experienced a slight decrease to 1.4% from 1.5%. Core inflation remained unchanged at 2.7%.  Analysts forecast that inflation in the Euro Area might decrease in the first half of 2025 and reach 2% by June.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/pierszy%20obrazek.png" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bearish effect on the EUR, while a lower-than-expected reading could be bullish for the EUR.   Impact: EUR/USD, EUR/GBP, EUR/PLN   <h3>Thursday, 6.02, 13:00 CET, UK interest rate decision</h3> During its December 2024 meeting, the Bank of England kept the benchmark bank rate unchanged at 4.75%, aligning with market expectations. This decision came as consumer price index (CPI) inflation, wage growth, and certain inflation expectation indicators had increased, highlighting the risk of persistent inflation.  The central bank emphasized that a gradual approach to easing monetary policy remains suitable and that it must maintain a restrictive stance for an adequate period until the risks of inflation sustainably returning to the 2% target in the medium term are further alleviated. The Bank of England will evaluate the appropriate level of monetary policy restrictiveness at each of its meetings. Analysts forecast that a possible 25-basis point rate cut at the upcoming BoE meeting may result in a 4.50% benchmark bank rate. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/dziejszagrafika%202.png" /> Source: Tradingeconomics.com   A decision resulting in a higher-than-expected benchmark bank rate may have a bullish effect on the GBP, while a lower-than-expected benchmark bank rate could be bearish for the GBP. Impact: EUR/GBP, USD/GBP, GBP/PLN   <h3>Friday, 7.02, 14:30 CET, US unemployment rate (January)</h3> In December 2024, the unemployment rate in the United States declined to 4.1%, down from 4.2% in the prior month, falling below market expectations of 4.2%. The number of unemployed individuals dropped by 235,000, bringing the total to 6.886 million, while the level of employment rose by 478,000 to reach 161.661 million. At the same time, the labour force participation rate remained steady at 62.5%, and the employment-population ratio increased to 60% from 59.8%. Analysts expect the US unemployment rate to trend slightly higher reaching the level of 4.4% by the end of the first quarter of the year.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/ostatnia%20dzisiejsza.png" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bearish effect on the USD, while a lower-than-expected reading could be bullish for the USD.   Impact: EUR/USD, USD/GBP, USD/PLN.   Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.43% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comFri, 31 Jan 2025 09:11:00 +0100Finally, January is over. With the Nvidia scare and the Fed decision behind us, markets could use a calmer first week of February. On Monday, investors will receive January’s preliminary inflation reading in the Euro Area, while the Bank of England will...Next week to watch (27-31.01.2025)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-27-31-01-2025https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-27-31-01-2025Poland has seen a number of interesting changes in the economy and society in recent years, which are reflected in the CSO's statistical yearbook. For example, the number of drug offences and fraud has increased significantly since 2015. The declining number of marriages and increasing number of divorces have an impact on demographics, which remain problematic due to falling birth rates. Industry and automotive dominate the labour market and strikes have become increasingly rare. Poland is developing its tourism and industrial sectors, but rising energy costs pose a serious challenge to competitiveness. Seaports are expanding rapidly while Poles own the most cars per capita in Europe. Poland's economy relies heavily on cooperation with Germany, which remains its main trading partner. Despite dynamic growth, companies still struggle with low margins and the stock market is not growing at the same rate as GDP. In the coming week, we will learn about interest rate decisions in Canada, the US and the euro area, as well as US GDP data.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Canada's interest rate decision</a></li> <li><a href="#heading-scroll2">US interest rate decision</a></li> <li><a href="#heading-scroll3">Eurozone interest rate decision</a></li> <li><a href="#heading-scroll4">US gross domestic product</a></li> </ol> <h2 id="heading-scroll1">Wednesday, 29.01, 15:45 CET, Canada's interest rate decision</h2> The Bank of Canada cut its main interest rate, for the fifth time, at its December meeting, bringing the total to 175 bps of cuts from its peak of 5 percent. Despite this, central bank officials do not anticipate more aggressive cuts next year and dropped their statement of further policy easing if the underlying economic scenario holds up. The decision was preceded by data that showed Canada's GDP grew by 1 percent, year-on-year, in the third quarter, which was below the Central bank's forecasts. If the Q4 result also falls short of expectations, further reductions are likely to be considered. The Central bank expects inflation to remain close to the 2 percent target in the coming years, although potential tariffs, from the new US administration, introduce uncertainty about further price increases. Analysts are forecasting another 25bp interest rate cut, to 3 percent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_Kanada_24.01.png" alt="interest rate chart Canada" /> Source: Tradingeconomics.com A higher-than-expected interest rate could act bullish for CAD, while a lower-than-expected rate could be bearish for CAD. Impact: EUR/CAD, USD/CAD <h2 id="heading-scroll2">Wednesday, 29.01, 15:45 CET, US interest rate decision</h2> Fed officials acknowledged that risks to inflation have increased due to higher readings and possible changes in trade and immigration policy, according to the December FOMC minutes. While they still believe inflation is heading towards 2 percent, the process may take longer than previously expected. Some fear that disinflation has stalled or will be delayed. The Fed has signalled that it is close to the point of slowing, interest rate cuts It cut rates by 25 bps in December, to a range of 4.25-4.5 percent, and expects two more cuts in 2025, for a total of 50 bps. Analysts forecast interest rates to remain at 4.5 percent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_24.01.png" alt="US interest rate graph" /> Source: Tradingeconomics.com A higher-than-expected interest rate could act bullish for the USD, while a lower-than-expected rate could be bearish for the USD. Impact: EUR/USD, USD/PLN <h2 id="heading-scroll3">Thursday 30.01, 14:15 CET, Eurozone interest rate decision</h2> The ECB Governing Council (12 December 2024) cut three key interest rates by 25 bps, including the deposit rate to 3.00 percent. The decision is based on the improving inflation outlook and the effectiveness of monetary policy transmission. Inflation is expected to gradually decline, reaching 2.4 percent in 2024 and 1.9 percent in 2026. Inflation is approaching the 2 percent target, although it remains high due to the lagged response of prices and wages. Analysts forecast interest rates in the euro area to remain at 3.15 percent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_EU_24.01.png" alt="EU interest rate graph" /> Source: Tradingeconomics.com A higher-than-expected interest rate could act bullish for the EUR, while a lower-than-expected rate could be bearish for the EUR. Impact: EUR/USD, EUR/PLN <h2 id="heading-scroll4">Thursday, 30.01, 14:30 CET, US gross domestic product</h2> The US economy grew at an annual rate of 3.1 percent in the third quarter of 2024, exceeding earlier forecasts. Growth was mainly driven by higher consumer spending, including a 5.6 percent increase in spending on goods and rising spending on services. Business investment exceeded expectations, although housing and construction investment declined. Government consumption increased by 5.1 percent and the trade deficit narrowed, which had a positive impact on the strength of the dollar. Analysts now forecast that US GDP will continue to grow at a rapid pace, reaching 3 percent in the coming quarters. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_USA_24.01.png" alt="graph of US GDP" /> Source: Tradingeconomics.com A higher-than-expected reading could act bullish for the USD, while a lower-than-expected reading could act bearish for the USD. Impact: EUR/USD, USD/PLN   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72,43% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.  forex conotoxia.comFri, 24 Jan 2025 13:49:00 +0100Poland has seen a number of interesting changes in the economy and society in recent years, which are reflected in the CSO's statistical yearbook. For example, the number of drug offences (up 32 percent) and fraud (41 percent) has increased significantl...The most interesting facts from the Polish economyhttps://invest.conotoxia.com/investment-research/comments/the-most-interesting-facts-from-the-polish-economyhttps://invest.conotoxia.com/investment-research/comments/the-most-interesting-facts-from-the-polish-economyStatistical Yearbook of the Republic of Poland is a treasure trove of interesting data about Poland that is bound to surprise everyone. Did you know that Poles have the most cars per capita in Europe? Or maybe you are interested in why our seaports are developing at a dizzying pace? In the latest report you will also find surprising information about rising energy costs or the increasing number of crimes. If you want to find out what is really shaping our economy, these statistics are a must!<h3>Table of contents</h3> <ol> <li><a href="#heading-scroll1">These crimes are gaining ground in Poland</a></li> <li><a href="#heading-scroll2">Poland is a dying civilisation</a></li> <li><a href="#heading-scroll3">Poles work mainly in factories and in the automotive industry</a></li> <li><a href="#heading-scroll4">Poles are going on strike less and less</a></li> <li><a href="#heading-scroll5">The most popular fields of study are administration and medicine</a></li> <li><a href="#heading-scroll6">Polish hotels are bursting at the seams</a></li> <li><a href="#heading-scroll7">Poland is spending more and more on research and development</a></li> <li><a href="#heading-scroll8">Polish industry as an engine for the economy</a></li> <li><a href="#heading-scroll9">Electricity costs are killing Polish industry</a></li> <li><a href="#heading-scroll10">Dynamically developing seaports in Poland</a></li> <li><a href="#heading-scroll11">Poles have the most cars per capita in Europe</a></li> <li><a href="#heading-scroll12">Poland's roads are getting safer</a></li> <li><a href="#heading-scroll13">Germany remains the largest business partner</a></li> <li><a href="#heading-scroll14">Polish companies' margins are still low</a></li> <li><a href="#heading-scroll15">The economy is growing as the stock market is sagging</a></li> </ol> <h2 id="heading-scroll1">These crimes are gaining ground in Poland</h2> Most comparative analyses are based on data from 2015, almost a decade ago. Looking at the changes in the structure of offences, we notice that although the total number of offences has remained at a similar level, their nature has changed significantly. The number of drug offences increased by 32 percent, making it one of the most frequently committed offences in Poland. As a consolation, it is worth mentioning that the number of fights, beatings and proven cases of corruption has halved over the past few years. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_1_23.01.png" /> Source: Conotoxia own study, GUS data According to statistics, thieves are stealing less and less in Poland, because we ourselves.. ‘give’ them money (eg. spoofing). There has been a 41 percent increase in the number of recorded cases of fraud, which has become the most common type of crime in Poland - as many as 165,000 such cases were recorded in 2023. On the other hand, the number of property thefts fell by 19 percent and burglary by 47 percent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_2_23.01.png" /> Source: Conotoxia own study, GUS data <h2 id="heading-scroll2">Poland is a dying civilisation</h2> The Polish economic miracle is repeatedly cited in public debates. However, further, equally dynamic development of the Polish GDP will become increasingly difficult as the number of Poles decreases year by year. The situation is so serious that for a dozen years or so, more people have died each year than have been born. The 2020 pandemic has further exacerbated this problem, as the number of deaths is rising and the number of births is falling. Can any country thrive for decades to come with such demographics? <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_3_23.01.png" /> Source: GUS Birth statistics are mainly the end result, but why are birth rates so low? It turns out that men and women are finding it increasingly difficult to form long-term relationships. The number of marriages fell by as much as 22.7 percent, while the number of divorces remained stable. This means that the total number of marriages in Poland has decreased by 3.6 percent over the last decade. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_4_23.01.png" /> Source: GUS <h2 id="heading-scroll3">Poles work mainly in factories and in the automotive industry</h2> In Poland, as many as 2.5 million people, or 23 percent of all workers, are employed in industrial factories. The second most popular industry is trade and repair of motor vehicles, which employs 15.7 percent of workers. In third place are teachers and education workers, who account for 10 percent of the total number of employees. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_5_23.01.png" /> Source: Conotoxia own study, GUS data <h2 id="heading-scroll4">Poles are going on strike less and less</h2> In the media, especially in a political context, there is often talk about the deteriorating situation of particular professional groups. However, looking at the data, it is clear that Poles are taking part in strikes less and less frequently. The number taking part in such events has fallen by 92 percent since 2015! One could even say that strikes have become rare in Poland. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_6_23.01.png" /> Source: GUS <h2 id="heading-scroll5">The most popular fields of study are administration and medicine</h2> In Poland, more and more people are studying to become accountants, doctors and psychologists. In the academic year 2023/24, the most popular field of study at Polish universities was ‘business and administration’, with as many as 21 percent of students attending. Medical faculties were studied by 12.5 percent, and 12 percent chose sociology and psychology. Thus, it can be seen that there is a growing demand for financial specialists, while at the same time more and more people are struggling with health problems - both physical and mental. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_7_23.01.png" /> Source: Conotoxia own study, GUS data <h2 id="heading-scroll6">Polish hotels are bursting at the seams</h2> Poland is becoming an increasingly attractive tourist destination. The number of nights provided has increased by 30 percent since 2015, even though the number of accommodation facilities has remained virtually unchanged. This situation favours landlords, as it leads to an increase in prices for accommodation. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_8_23.01.png" /> Source: Conotoxia own study, GUS data <h2 id="heading-scroll7">Poland is spending more and more on research and development</h2> In the context of the innovativeness of the economy, much is said about the importance of R&D expenditure as a percentage of GDP. Although Poland is developing dynamically, it is still lagging behind the European average - our R&D expenditure is 1.5 percent of GDP, while the European average is 2.2 percent. However, the future may bring positive changes, as the number of entities investing in R&D has increased by as much as 67 percent since 2015! <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_9_23.01.png" /> Source: Conotoxia own study, GUS data The structure of R&D expenditure has also changed significantly. Whereas previously the majority of these funds came from the state budget, up to 55 percent of funding is now provided by private companies. This is a trend characteristic of the developed Western economies, which is indicative of the private sector's increasing involvement in innovation. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_10_23.01.png" /> Source: GUS <h2 id="heading-scroll8">Polish industry as an engine for the economy</h2> The main driver of the Polish economy is industry, which benefits from competitive advantages such as a favourable location, relatively low labour costs compared to Western standards and a well-qualified workforce. Since 2015, Polish industry has been growing at an impressive rate, recording almost 50 percent growth and becoming the second fastest-growing industrial sector in Europe. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_11_23.01.png" /> Source: GUS <h2 id="heading-scroll9">Electricity costs are killing Polish industry</h2> In order to maintain the momentum of an industry, it is crucial to understand its economic underpinnings. Industrial products are typically characterised by lower demand and price volatility, which makes cost efficiency and economies of scale play a key role. At present, almost every manufacturing plant in Poland is affected by soaring energy costs, which have increased by as much as 115 percent in the period under review. This situation adversely affects the competitiveness of Polish industry and poses a serious challenge for the coming years. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_12_23.01.png" /> Source: Conotoxia own study, GUS data <h2 id="heading-scroll10">Dynamically developing seaports in Poland</h2> Although Poland cannot boast a long history of maritime transport, it has achieved impressive results in this field in recent years. The amount of goods handled in Polish ports has almost doubled, which is evidence of the dynamic development of trade and the growing importance of this sector for the country's economy. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_13_23.01.png" /> Source: Conotoxia own study, GUS data <h2 id="heading-scroll11">Poles have the most cars per capita in Europe</h2> This is a real sensation! Poles have the most passenger cars in Europe - as many as 761 per 1 000 inhabitants. What is more, in terms of the number of vehicles per capita, they are among the world leaders. However, most of these cars are not straight from the showroom, as the average age of a passenger car in Poland is as much as 14.9 years. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_14_23.01.png" /> Source: VisualsCapitalism <h2 id="heading-scroll12">Poland's roads are getting safer</h2> Despite the increasing availability of cars in Poland, the number of road accidents has fallen by as much as 36 percent since 2015. This demonstrates a significant improvement in road safety. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_15_23.01.png" /> Source: Conotoxia own study, GUS data <h2 id="heading-scroll13">Germany remains the largest business partner</h2> The Poles have a complicated history of relations with their neighbours, particularly Germany and Russia. Today, however, the Polish economy relies heavily on cooperation with its western neighbour. Germany is Poland's largest trading partner, accounting for as much as 27.9 percent of Polish exports. Therefore, the current economic turmoil in Germany may negatively affect Poland's economic situation. Therefore, the stability and development of the German economy are also in the interest of our country. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_16_23.01.png" /> Source: Conotoxia own study, GUS data <h2 id="heading-scroll14">Polish companies' margins are still low</h2> Polish companies lack one key feature - globally recognisable brands and products. This makes it impossible for domestic companies to offer their products at higher prices, confident that they will find loyal buyers for them. As a result, the average net profit margin in Poland is only 4.3 percent. This compares with 7.3 percent in the United States and 5.5 percent in Europe. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_17_23.01.png" /> Source: Conotoxia own study, GUS data <h2 id="heading-scroll15">The economy is growing as the stock market is sagging</h2> It would seem that the growth of the economy goes hand in hand with the growth of the stock market. However, in the case of Poland, the situation is different - the capitalisation of domestic companies as a percentage of GDP has fallen from 37 percent in 2013 to just 22 percent in 2023. Can such a decline therefore be considered an investment opportunity? <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_18_23.01.png" /> Source: GUS   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72,43% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comThu, 23 Jan 2025 10:50:00 +0100Statistical Yearbook of the Republic of Poland is a treasure trove of interesting data about Poland that is bound to surprise everyone. Did you know that Poles have the most cars per capita in Europe? Or maybe you are interested in why our seaports are ...Next week to watch (20-24.01.2025)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-20-24-01-2025https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-20-24-01-2025As the US celebrates Martin Luther King Jr.’s Day on Monday, stock exchanges will resume work on Tuesday morning. While the economic calendar looks rather short this week, we will receive some inflation data from Germany on Monday and the US's initial and continuing jobless claims on Thursday. The annual meeting of the World Economic Forum will take place this week in Davos, Switzerland, starting Monday. According to the WEF agenda, this year's top decision-makers will gather under “Collaboration for the Intelligent Age” to discuss geopolitical shocks, improving living standards worldwide, and energy transition.Table of Contents: <ol> <li><a href="#heading-scroll1">German Producer Price Index (PPI) MoM (December)</a></li> <li><a href="#heading-scroll2">US Initial Jobless Claims (week ending January 18)</a></li> </ol>   <h3>Monday 20.01. 08:00 CET, German Producer Price Index (PPI) MoM (December)</h3> In November 2024, Germany experienced a 0.50 percent increase in producer prices compared to the previous month, representing the largest monthly rise since April 2023, following a 0.20 percent increase in October. From 1950 to 2024, the average monthly producer price inflation in Germany was 0.19 percent, with a peak of 5.40 percent in August 2022 and a low of -3.10 percent recorded in November 2022. Analysts forecast the German PPI to slightly decline from the previous reading and reach 0.4% in the upcoming announcement.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/graficzka2%20(2).png" alt="" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bearish effect on the EUR, while a lower-than-expected reading could be bullish for the EUR.   Impact: EUR/USD, EUR/GBP, EUR/PLN   <h3>Thursday 23.01. 14:30 CET, US Initial Jobless Claims (week ending January 18)</h3> In the week ending January 11, 2025, initial jobless claims in the United States rose to 217,000, up from 201,000 the previous week. The reading came out higher than the expected 210,000. Furthermore, last week’s reading of 201,000 has been revised to 203,000 - also worse than previously reported. Historically, initial jobless claims in the US averaged 363,170 from 1967 to 2025, peaking at an unprecedented 6,137,000 in April 2020 and hitting a record low of 162,000 in November 1968. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/graficzka2%20(1).png" alt="" /> Source: Tradingeconomics.com   A higher-than-expected reading may have a bearish effect on the USD, while a lower-than-expected reading could be bullish for the USD. Impact: EUR/USD, USD/GBP, USD/PLN   Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.43% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comFri, 17 Jan 2025 13:42:00 +0100As the US celebrates Martin Luther King Jr.’s Day on Monday, stock exchanges will resume work on Tuesday morning. While the economic calendar looks rather short this week, we will receive some inflation data from Germany on Monday and the US's initial a...Oil price forecast - three major reportshttps://invest.conotoxia.com/investment-research/comments/oil-price-forecast-three-major-reportshttps://invest.conotoxia.com/investment-research/comments/oil-price-forecast-three-major-reportsThe three major oil market research institutions have published their latest forecasts for demand, supply and projected prices per barrel of oil in 2025.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">US Energy Information Administration (EIA) report</a></li> <li><a href="#heading-scroll2">International Energy Agency (IEA) report</a></li> <li><a href="#heading-scroll3">OPEC report</a></li> <li><a href="#heading-scroll4">Summary</a></li> </ol> <h2 id="heading-scroll1">US Energy Information Administration (EIA) report</h2> The latest short-term and medium-term forecast from the US Energy Information Administration (EIA) indicates key trends in the global energy market for 2025-2026. The EIA predicts that Brent crude oil prices will decline in the coming years, mainly due to global supply outstripping demand. The average price of a barrel is expected to be $74 in 2025, down almost 10 percent, and reach $66 in 2026 (down 11 percent). <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_XBRUSD_16.01.png" alt="XBRUSD chart" /> Source: Conotoxia MT5, XBRUSD At the same time, oil production is projected to increase by 1.8 million barrels per day (up 1.8 percent year-on-year) in 2025 and by a further 1.5 million b/d in 2026. The main drivers of this growth will be non-OPEC+ countries, including the United States, Brazil and Canada. The biggest impact on supply will come from increased oil production in the US, where it is already reaching its historic levels. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_wydobycie_ropy_16.01.png" alt="graph oil production" /> Source: EIA World oil consumption will increase moderately by 1.3 million barrels per day (up 1.2 percent year-on-year) in 2025 and by 1.1 million b/d in 2026, which will be slower than the projected rate of production growth. Demand growth will be driven mainly by non-OECD countries, with India leading the way, while demand in developed countries will remain stable. EIA forecasts for 2025-2026 assume further declines in oil prices, moderate fuel demand growth and stabilisation of global production. At the same time, the energy sector will become increasingly dependent on renewables, especially solar. The US will remain the world's largest individual oil producer. <h2 id="heading-scroll2">International Energy Agency (IEA) report</h2> According to a report by the International Energy Agency (IEA), the global oil market is entering the new year with intense changes, driven by both seasonal and geopolitical factors. Increased demand, changing weather conditions and economic sanctions are having a significant impact on the market, creating new challenges and opportunities. The IEA notes that the final quarter of 2024 saw a seasonal increase in global oil demand of 1.5 million barrels per day (mb/d), the highest level since the fourth quarter of 2023. Forecasts for this year point to a further increase in demand of 1.05 million mb/d, almost half the increase forecast by US institutions. Global oil production increased in December 2024, reaching 103.5 million barrels per day. The IEA predicts that production will increase by a further 1.8 million b/d in 2025. Like the US Energy Agency (EIA), the IEA also notes that non-OPEC+ production growth will be particularly significant, reaching 1.5 million barrels per day in 2025 as well, led by the US, Brazil, Canada and Argentina. Global oil stocks rose by 12.2 million barrels in November, but stocks in OECD countries fell to their lowest level since August 2022. New US sanctions on Iran and Russia may further affect global oil flows. Severe weather conditions in North America may in turn limit production, particularly in cold-sensitive regions. Despite these challenges, production increases in non-OPEC+ countries and potential production increases by the alliance are expected to meet both rising demand and potential supply disruptions. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_zapasy_ropy_16.01.png" alt="graph oil stocks" /> Source: EIA The IEA, like its US counterpart, notes that demand growth is unlikely to keep pace with the increase in oil production, which will be driven mainly by the US. In addition, in 2025 there is a high probability that OPEC countries will abandon their existing production cuts. Such a situation could lead to noticeable declines in oil prices in the coming quarters. <h2 id="heading-scroll3">OPEC report</h2> In its monthly oil market forecasts, the OPEC cartel, which accounts for around a third of global production, provides key predictions for the future of the sector. Global economic growth is expected to be 3.1 percent in 2025 and 3.2percent in 2026. The main drivers of this growth will be the US, China and India, which will also be reflected in rising oil demand. In its report, OPEC forecasts that global oil demand will increase by 1.4 million barrels per day in 2025, of which 1.3 mb/d will come from non-OECD countries. In 2026, demand is expected to increase by a further 1.4 mb/d, mainly from countries in Asia, the Middle East and Latin America. Transport growth and increased industrial activity in developing regions will be key. OPEC is also forecasting the lowest oil production growth among the market research institutions at 1.1 mb/d per annum between 2025 and 2026, with the US, Brazil, Canada and Norway expected to be the largest contributors. Like the International Energy Agency (IEA), OPEC notes that by the end of 2024, global oil stocks in OECD countries have fallen to levels below the 2015-2019 average. Unlike other institutions, OPEC forecasts more stability in the oil market. Balance is expected to be maintained with an emphasis on efficiency and supply stability. <h2 id="heading-scroll4">Summary</h2> Forecasts for 2025-2026 indicate that the global oil market will be characterised by production increase and moderate demand growth, which could lead to further price declines. The EIA predicts an average Brent crude price of US$74 per barrel in 2025 and falling to US$66 in 2026. The US, Brazil and Canada will remain the main drivers of production growth. The IEA points to possible geopolitical and seasonal effects that could affect the market, and the potential lifting of production restrictions by OPEC. OPEC, on the other hand, expects more stability with a focus on supply balance and efficiency. Despite the challenges, developing economies, particularly in Asia, will continue to drive oil demand growth.   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72,43% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comThu, 16 Jan 2025 15:41:00 +0100The three major oil market research institutions have published their latest forecasts for demand, supply and projected prices per barrel of oil in 2025.Fires in LA - market also in flameshttps://invest.conotoxia.com/investment-research/comments/fires-in-la-market-also-in-flameshttps://invest.conotoxia.com/investment-research/comments/fires-in-la-market-also-in-flamesOn 7-8 January 2025, dangerous fires broke out in the Los Angeles area. The largest of these, dubbed the Palisades Fire, started in the Pacific Palisades district and covered an area of nearly 1182 hectares. Other outbreaks occurred in the San Fernando area to the north and near Pasadena to the northeast of the city. According to media reports, the fires have destroyed or severely damaged more than 12,000 buildings, forcing the evacuation of more than 150,000 residents. Currently, around 92,000 people are still under orders to leave their homes. Initial estimates predict that losses could be as high as $30 billion if the fires continue to spread. The tragic events have also affected financial markets. The main S&P 500 index lost 2 percent of its value last week. However, there is one sector on the US stock market that has been hit the hardest.<h3>Table of contents</h3> <ol> <li><a href="#heading-scroll1">Insurance</a></li> <li><a href="#heading-scroll2">Chubb Limited</a></li> <li><a href="#heading-scroll3">Allstate</a></li> <li><a href="#heading-scroll4">The Hartford</a></li> <li><a href="#heading-scroll5">Mercury General Corporation</a></li> <li><a href="#heading-scroll6">Reinsurance, or the thread to the puck</a></li> </ol> <h2 id="heading-scroll1">Insurance</h2> The iShares U.S. Insurance ETF index lost more than 3 percent last week, but the companies in the index were unevenly affected by the fires, due to the different forms of business they operate. Let's take a look at those that may be most affected by the fires. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_IsharesETF_15.01.png" alt="Ishares Insurance ETF chart" /> Source: Tradingview <h2 id="heading-scroll2">Chubb Limited</h2> Chubb is one of the largest insurance companies in the world specialising in the provision of property, liability and reinsurance insurance to individuals, companies and institutions. The company offers a wide range of insurance services, including health, life and accident insurance, as well as specialised products for various industries. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Chubb_15.01.png" alt="Chubb chart" /> Source: Tradingview Chubb manages the risk of natural catastrophes such as hurricanes, earthquakes, fires and floods by setting risk limits based on probable maximum loss (PML) and buying reinsurance to provide liquidity and capital. Based on risk models, the company estimated potential losses, including those associated with hurricanes in the US and earthquakes in California. In a 1-in-250-year scenario, losses could amount to more than $8.5 million, or just 13.1 percent of Chubb's equity, indicating the company's financial stability is safe. <h2 id="heading-scroll3">Allstate</h2> Allstate is a US-based insurance company offering a wide range of products, including auto, home, health, life and business insurance. The company specialises in insurance for individuals and small businesses, and also offers investment and retirement products. Insurance in the state of California accounts for 9.6 percent of the company's insurance portfolio. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Allstate_15.01.png" alt="Allstate chart" /> Source: Tradingview Allstate offers homeowners insurance policies through North Light Specialty Insurance Company, including earthquake insurance (EXCLUDING post-earthquake fires), which is ceded through quota share reinsurance, a transfer of liabilities to another company. As a result, Allstate appears to be safe despite its exposure to property insurance risks in California. <h2 id="heading-scroll4">The Hartford</h2> The Hartford is a US-based insurance company that offers a wide range of products, including property, life and liability insurance for both individuals and businesses. It specialises in insurance for small and medium-sized businesses and also provides employees the retirement and health insurance solutions. California accounts for 12 percent of The Hartford's insurance revenue share. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Hardford_15.01.png" alt="the Hartford chart" /> Source: Tradingview As part of its extreme event risk management, the company reports that in the event of extreme natural catastrophes, which occur once every 250 years, the loss after reinsurance will be around $2 billion. This represents only 11.7 percent of equity, suggesting that the company should have no solvency problems, even in the event of large fires. <h2 id="heading-scroll5">Mercury General Corporation</h2> One of the companies most affected may be Mercury General Corporation, which has more than 80 percent of its insurance portfolio in California. Mercury General Corporation is an insurance company that specialises mainly in private auto insurance accounting for two-thirds of its insurance portfolio and home insurance (25 percent). The share price suffered the most of the large insurers, falling by as much as 28 percent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_MercuryG_15.01.png" alt="Mercury General chart" /> Source: Tradingview The company monitors and manages catastrophe risks, including those related to the California wildfires, by limiting risk concentrations in specific regions, using tools to accurately assess insurance risk and using reinsurance. The current reinsurance agreement covers 100 percent of losses up to $100 million and 95 percent of losses between $100 million and $140 million. The company does not anticipate significant changes to the reinsurance cover when the contract was renewed in July 2024, although the final decision will depend on pricing conditions in the market. It is noteworthy, however, that the company's insurance coverage in California totals $3.6 billion, representing as much as 193 percent of its equity. Although it is currently difficult to estimate what amounts the company will have to pay out in claims, from the companies analysed, it is the most exposed to natural catastrophe risks in California. <h2 id="heading-scroll6">Reinsurance, or the thread to the puck</h2> These losses are to be treated as a single occurrence, which can help insurers to obtain reinsurance coverage. Reinsurance clauses often group fires occurring within a specific time frame and in close proximity to each other, which is applicable to the current fires. Some analysts estimate that losses could be as high as $30 billion if the fires continue to spread. Reinsurance companies such as Chubb, Allstate and The Hartford are expected to benefit from recoveries under their reinsurance programmes. Loss estimates vary, but most insurance companies, even those with significant exposure to property and casualty insurance in California, appear to have adequate coverage and risk diversification through their reinsurance programmes.   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72,43% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comWed, 15 Jan 2025 10:00:00 +0100On 7-8 January 2025, dangerous fires broke out in the Los Angeles area. The largest of these, dubbed the Palisades Fire, started in the Pacific Palisades district and covered an area of nearly 1182 hectares. Other outbreaks occurred in the San Fernando ...Next week to watch (13-17.01.2025)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-13-17-01-2025https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-13-17-01-2025Donald Trump has identified Greenland as a key territory due to its strategic location, natural resources and military importance, even suggesting the possibility of taking over the island. In his view, control of Greenland could significantly strengthen US national security and influence global stability. In our latest article, we set out to analyse where these declarations come from and what implications they could have. The idea of taking over Greenland, which is an autonomous territory of the Kingdom of Denmark, has caused a stir internationally. Concerns have been raised that the United States could impose tariffs on Danish goods, which would hit the Danish economy. Denmark's largest pharmaceutical company, Novo Nordisk, whose key market is the US, could be particularly at risk. In the coming days, investors will turn their attention to US producer and consumer inflation data. Energy commodity market reports from the likes of the EIA, IEA and OPEC will also be important. This information may influence the markets and future US trade policy decisions.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">US producer price index (PPI) monthly (December)</a></li> <li><a href="#heading-scroll2">EIA Short-Term Energy Outlook</a></li> <li><a href="#heading-scroll3">US consumer price index (CPI) monthly (December)</a></li> <li><a href="#heading-scroll4">International Energy Agency (IEA) oil market report</a></li> </ol> <h2 id="heading-scroll1">Tuesday, 14.01, 14:30 CET, US producer price index (PPI) monthly (December)</h2> In November 2024, US producer prices rose by 3 percent year-on-year , the largest increase since February 2023. Prices among producers are dangerously starting to accelerate, usually historically preceding movements in CPI inflation. This could be a sign for the Fed to delay its announced interest rate cuts. Analysts forecast US PPI inflation to remain at 3 percent year-on-year. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PPI_US_10.01.png" alt="chart US PPI inflation" /> Source: Tradingeconomics.com A higher-than-expected reading could have a bullish impact on the USD, while a lower-than-expected reading could be bearish for the USD. Impact: EUR/USD, USD/PLN <h2 id="heading-scroll2">Tuesday, 14.01, 18:00 CET, EIA Short-Term Energy Outlook</h2> In a recent report by the Energy Information Administration (EIA), we learnt about forecasts for 2025, which indicated that global oil production would increase mainly due to non-OPEC+ countries. Indeed, the cartel plans to maintain production restrictions until April 2025. Brent crude oil prices are expected to remain stable at $74 per barrel. In the US, domestic oil production is expected to continue to increase, resulting in a net decrease in oil imports of more than 20 percent, to the lowest level since 1971. US natural gas inventories will remain above the average of the past five years throughout the heating season. At the end of March 2025, stocks are forecast to be 2 percent above the five-year average. Despite this, natural gas prices are forecast to increase from $2.00/MMBtu in November to $3.00/MMBtu for the rest of the heating season. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_XTIUSD_10.01.png" alt="XTIUSD chart" /> Source: Conotoxia MT5, XTIUSD, Daily A higher-than-forecast EIA could have a bullish impact on WTI oil prices, while a lower-than-expected EIA could be bearish for WTI. Impact: XTIUSD, XBRUSD <h2 id="heading-scroll3">Wednesday, 15.01, 14:30 CET, US consumer price index (CPI) monthly (December)</h2> US inflation rose to 2.7 percent in November 2024 from 2.6 percent in October, in line with forecasts. The increase was driven by higher food and natural gas prices, while energy costs fell more slowly. Analysts forecast an increase in US CPI inflation to 2.9 percent year-on-year. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_CPI_US_10.01.png" alt="chart US CPI inflation" /> Source: Tradingeconomics.com A higher-than-expected reading could have a bullish impact on the USD, while a lower-than-expected reading could act bearishly for the USD. Impact: EUR/USD, USD/PLN <h2 id="heading-scroll4">Wednesday, 15.01, 10:00 CET, International Energy Agency (IEA) oil market report</h2> The International Energy Agency (IEA) forecasts an increase in oil demand in 2025, mainly due to the petrochemical industry, with limited demand for transport fuels. Production will grow at a slower rate than demand, with non-OPEC+ countries such as the US, Brazil and Canada leading the way. OPEC+ will delay the lifting of production cuts until September 2026, limiting the risk of oversupply, although an earlier increase in production could raise it. Brent crude prices were at $73/bbl in November and the market remained stable. The key risks are Chinese demand and OPEC+ compliance with limits, while global demand growth will moderate. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_wydobycie_USA_10.01.png" alt="graph of US oil production" /> Source: EIA A higher-than-expected IEA forecast could have a bullish impact on WTI oil prices, while a lower-than-expected forecast could be bearish for WTI. Impact: XTIUSD, XBRUSD   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72,43% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comFri, 10 Jan 2025 13:57:00 +0100Donald Trump has identified Greenland as a key territory due to its strategic location, natural resources and military importance, even suggesting the possibility of taking over the island. In his view, control of Greenland could significantly strengthe...Novo Nordisk - should you invest in winners?https://invest.conotoxia.com/investment-research/comments/novo-nordisk-should-you-invest-in-winnershttps://invest.conotoxia.com/investment-research/comments/novo-nordisk-should-you-invest-in-winnersShares in Europe's largest pharmaceutical company, best known for its obesity drug Ozempic, have fallen by 40 per cent in just six months. Until a few months ago, the company was considered by many investors to be one of the most promising on the market. Today, however, it is experiencing a sharp discount. Let's find out what led to this situation and what conclusions can be drawn from it.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Trump's conflict with Denmark</a></li> <li><a href="#heading-scroll2">Countdown to 2032</a></li> </ol> <h2 id="heading-scroll1">Trump's conflict with Denmark</h2> Donald Trump, even before becoming US president, has sparked a diplomatic crisis by renewing his controversial proposal to buy Greenland from Denmark. If refused, he threatens to impose tariffs on Danish goods. At the centre of the potential conflict was Novo Nordisk, manufacturer of the drug Ozempic, originally used to treat type 2 diabetes and now known as an effective weight-loss treatment. Former US ambassador to Copenhagen Rufus Gifford suggested that Denmark could respond by threatening to stop sales of the drug to the US, where it is hugely popular. However, for Novo Nordisk such a step would mean serious losses, as the US market generates as much as 70 per cent of the company's revenue. Novo Nordisk fears that the US tariffs will hurt its business, as the company operates several production facilities in the US and is dependent on trade with the country. <a href="https://invest.conotoxia.com/investment-research/comments/why-does-trump-want-to-take-over-greenland">The conflict over Greenland</a>, therefore, could affect the global market for pharmaceuticals targeting people struggling with type 2 diabetes and obesity. <h2 id="heading-scroll2">Countdown to 2032</h2> Novo Nordisk holds the patent for semaglutide, the active ingredient in the drug Ozempic. The patent expires at the beginning of 2032. After this date, competitors will be able to produce this compound on their own, which will almost certainly lead to a decrease in revenue for the Danish giant. It is worth noting that many of the company's key patents expire in a similar period, i.e. between 2028 and 2032. With its current patents, Novo Nordisk is a leader in three key pharmaceutical markets: <ul> <li style="font-weight: 400;" aria-level="1">GLP-1 drugs, used to treat type 2 diabetes and obesity, with a market share of 55.6 per cent,</li> <li style="font-weight: 400;" aria-level="1">insulins, where it holds a 43.3 per cent share,</li> <li style="font-weight: 400;" aria-level="1">diabetes drugs, where it controls 33.9 per cent.</li> </ul> The company's current market position is therefore based on patent protection, which provides it with a competitive advantage, but this could be significantly eroded once these rights expire. Hence, the company is currently fighting to gain as much as possible in the shortest possible time. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_udzia%C5%82_NovoNordisk_10.01.png" alt="Novo Nordisk share chart" /> Source: Novo-Nordisk, Quarterly Report At best, the company still has seven very fruitful years left. This is also borne out by the figures. The company's sales are growing at 26 per cent per year and the average net profit margin is an impressive 35 per cent. This translates into a return on invested capital of 28 per cent. This means that the company doubles every dollar invested in less than three years. However, in the context of a potential purchase of Novo Nordisk shares, it is worth recalling the words of well-known investor Howard Marks: ‘Investment success comes not from buying good things, but from buying them at a favourable price’. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_NovoNordisk_10.01.png" alt="Novo Nordisk chart" /> Source: TradingView Novo Nordisk's situation seems to fit perfectly with this principle. Assuming the company's sales halve after patent expiry, the current valuation predicts that sales will continue to grow at a rate of almost 35 per cent in the coming years. This suggests that, despite the current 40 per cent decline, the company may still show signs of overvaluation, given its current sales growth rate of 26 per cent. This confirms that the most talked-about investment themes, and Novo Nordisk was one of them just a year ago, often prove disastrous when investors, racing not to be left behind, buy without thinking about the price they have to pay. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/tabela_wycena_NovoNordisk_ENG_10.01.png" alt="valuation table Novo Nordisk" /> Source: Conotoxia own study   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72,43% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comFri, 10 Jan 2025 11:49:00 +0100Shares in Europe's largest pharmaceutical company, best known for its obesity drug Ozempic, have fallen by 40 per cent in just six months. Until a few months ago, the company was considered by many investors to be one of the most promising on the market...Why does Trump want to take over Greenland?https://invest.conotoxia.com/investment-research/comments/why-does-trump-want-to-take-over-greenlandhttps://invest.conotoxia.com/investment-research/comments/why-does-trump-want-to-take-over-greenlandDonald Trump, in a recent speech just before the inauguration of his presidency, threatened to take control of Greenland and the Panama Canal on the grounds of the need to ensure US national security. With regard to Greenland, Trump highlighted its strategic military importance and mineral wealth, which could be crucial to the US economy. Why is Trump showing such a strong interest in this independent territory? In terms of the island's investment and resource potential, what could actually prompt him to make such declarations?<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">A few words about Greenland</a></li> <li><a href="#heading-scroll2">Greenland's economy - no question of independence</a></li> <li><a href="#heading-scroll3">In Greenland they are sitting on a mountain of raw materials that they are not extracting</a></li> </ol> <h2 id="heading-scroll1">A few words about Greenland</h2> Greenland, which is an autonomous territory of the Kingdom of Denmark, has been pushing for autonomy for many years. Pro-independence movements are supported by the political parties Siumut, Inuit Ataqatigiit or Naleraq. These aspirations are rooted in historical and political circumstances, dating back to the time of Norwegian and Inuit settlement and Danish colonisation of the island. Although Greenland is the largest island in the world, it is inhabited by only about 60,000 people.  In the 18th century, the Danes recolonised Greenland and in the 19th century Denmark gained full control of the island through the Treaty of Kiel. During World War II, Greenland came under the US protectorate, which strengthened its independence from Denmark. In 1953, Greenland was formally incorporated into the Kingdom of Denmark as a Danish province. In 1979, it gained self-government, which allowed it to control its internal affairs, and in 2009 the law of self-determination was introduced. These changes have enabled Greenland to make autonomous decisions on trade and foreign policy issues. In recent years, Greenland has been working on a draft constitution for an independent state, and Prime Minister Múte Bourup Egede has suggested the possibility of an independence referendum in 2025. In the past, Greenland has been of key importance to the United States due to its strategic location in the Arctic, allowing control over sea and air routes and providing early warning of potential threats from the USSR. The US Thule Air Base, which still exists today, continues to play a vital role in the North American defence system. <h2 id="heading-scroll2">Greenland's economy - no question of independence</h2> Why is Trump even suggesting a takeover of Greenland? Perhaps the island's economic importance is such that strengthening economic ties with it seems crucial to US interests. However, if we look at the hard data, this thesis is quickly dismissed. Greenland's economy in almost every aspect makes it impossible for it to be independent of Denmark or any other protectorate state. Despite a relatively high GDP per capita of $57,000 per year, the extremely low population means that as an independent country Greenland would only rank 166th in terms of economic size. From a US perspective, Greenland's economy represents just 0.005 percent of US GDP. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_Grenlandii_08.01.png" alt="Greenland GDP graph" /> Source: World Bank Greenland's economy is based on shrimp and fish exports and a substantial subsidy from the Danish government. Fisheries account for more than 90 percent of exports, leaving the economy vulnerable to price fluctuations. The subsidy from the Danish government in 2017 was budgeted at around $535 million, which is more than 50 percent of the island's income and 25 percent of GDP. So we can clearly see that it is not the industry or the booming region that accounts for Greenland's economic potential, which could be crucial for the United States. The island faces serious challenges, such as low levels of skilled labour, geographical dispersion, lack of industrial diversification, long-term sustainability of the public budget and a declining population due to emigration. Hydrocarbon exploration has been halted due to falling oil prices. However, the island has the potential to exploit natural resources, which could become one of the key reasons for Donald Trump's attitude towards Greenland. <h2 id="heading-scroll3">In Greenland they are sitting on a mountain of raw materials that they are not extracting</h2> Greenland has significant mineral resources, including six of the fourteen raw materials identified as critical by the European Commission. Key resources include niobium, platinum group metals, rare earth elements (REEs) and tantalum. The REE resource is estimated to be worth around 12 million tonnes, representing 9.2 percent of global reserves. However, despite its high potential, Greenland does not currently extract these raw materials on a large scale. This requires significant external investment and most of the resources are still undiscovered. Therefore, international exploration missions are regularly organised to explore new deposits. Greenland has the opportunity to become an important player in the rare earths market, currently dominated by China. Chinese investment accounts for more than 70 percent of global REE production, making reducing this dominance a priority for many countries, especially the United States. In addition to minerals, Greenland has potential deposits of oil and natural gas. It is estimated that there could be as much as 17.5 billion barrels of oil and 148 trillion cubic feet of gas around the island. The discovery and exploitation of these deposits could significantly affect the region's economy and the geopolitical interests of world powers. For this reason, Greenland is gaining importance in global politics. The United States, especially during the presidency of Donald Trump, has expressed a strong interest in the region. The possible discovery of key raw material deposits (e.g. oil and gas) and the reduction of Chinese influence on mining may have been one of the reasons why Greenland became a priority topic for the US administration. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_mapa_surowc%C3%B3w_08.01.png" alt="map of greenlandic raw materials" /> Source: GOVERNMENT OF GREENLAND   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comWed, 08 Jan 2025 16:06:00 +0100Donald Trump, in a recent speech just before the inauguration of his presidency, threatened to take control of Greenland and the Panama Canal on the grounds of the need to ensure US national security. With regard to Greenland, Trump highlighted its stra...Chinese vs US money-making machineshttps://invest.conotoxia.com/investment-research/comments/chinese-vs-us-money-making-machineshttps://invest.conotoxia.com/investment-research/comments/chinese-vs-us-money-making-machinesHoward Marks, a well-known investor stated: ‘Investment success comes not from buying good things, but from buying them at a favourable price’. Today, Chinese companies that have not recovered from the property crisis are offering such investment opportunities. We will look at companies that can be considered ‘money-making machines’. We will use two metrics to evaluate them: price to free cash flow ratio and shareholder return, which takes into account profit distributions to investors and debt repayments.<h3>Table of contents:</h3> <ol> <ol> <li><a href="#heading-scroll1">Baidu – Chinese Google</a></li> <li><a href="#heading-scroll2">ZTO Express – Chinese FedEx</a></li> <li><a href="#heading-scroll3">Tencent – Chinese Facebook</a></li> <li><a href="#heading-scroll4">Alibaba – Chinese Amazon</a></li> <li><a href="#heading-scroll5">Summary</a></li> </ol> </ol> <h2 id="heading-scroll1">Baidu – Chinese Google</h2> Baidu is a Chinese technology company, best known as the operator of China's largest internet search engine. However, the company's activities go far beyond this one service - Baidu is actively investing in the development of artificial intelligence, autonomous vehicles and other advanced future technologies. The past five years have not been a period of explosive growth for the company, with sales increasing at an annual rate of 4.9 per cent. However, Baidu generated significant cash flow during this time. The price to free cash flow (P/FCF) ratio for the company currently stands at 10.7, which for a technology company may indicate a potential undervaluation. In comparison, Alphabet (owner of Google), Baidu's main competitor, has this ratio at 43. This means that Baidu is currently nearly four times cheaper than its biggest rival. Baidu's additional advantage is its shareholders yield, which is 8.3 per cent per annum, compared to just 3 per cent for Alphabet. It is also worth noting that much of Baidu's cash generation in recent quarters has been used to pay down debt. As a result, the company now has more cash than liabilities, further strengthening its financial position. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Baidu_07.01.png" alt="chart Baidu" /> Source: Conotoxia MT5, Baidu, Daily <h2 id="heading-scroll2">ZTO Express – Chinese FedEx</h2> For many Western investors, Chinese brands may seem unfamiliar and alien, as they often focus their business exclusively on China's domestic market. A good example is ZTO Express, which is one of China's leading courier companies specialising in express parcel delivery. Through its partnerships with e-commerce giants such as Alibaba, ZTO plays a key role in e-commerce-related logistics in China. ZTO Express' revenue has grown at an impressive rate of 15 per cent per year for the past five years. Despite this, the company's share price has steadily declined year on year. This situation has led to a significant divergence between the company's operating performance and its stock market valuation. The price to free cash flow (P/FCF) ratio for ZTO currently stands at 18.7, which may indicate that the company is valued at the right level. By comparison, US parcel giant FedEx is valued at a P/FCF ratio of 25. The biggest downside for ZTO Express is its relatively low shareholder yield, which is only 2.5 per cent. This means that the company pays out a relatively small proportion of the profits it generates to investors, which may limit its attractiveness in the eyes of potential shareholders. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_ZTO_07.01.png" alt="chart ZTO Express" /> Source: Conotoxia MT5, ZTOExpres, Daily <h2 id="heading-scroll3">Tencent – Chinese Facebook</h2> Tencent is a Chinese technology conglomerate that has gained international recognition for its wide range of online services and products. Among the best known of these are the instant messaging service WeChat, the social network QQ and numerous online games. The company also invests in a variety of industries: artificial intelligence, fintech or entertainment. It is safe to say that Tencent is the Chinese equivalent of Meta Platforms. Looking at Tencent's financial performance, it is easy to see where its advantage lies. Over the past five years, the company's average annual revenue growth has been 12.5 per cent. Currently, Tencent's valuation, as measured by its P/FCF ratio, is 16.4, which makes it far more attractive compared to Meta Platforms, whose valuation at the same time reaches 30.5. Furthermore, the shareholders yield in the form of dividends and share buybacks is 3.6 per cent, compared to only 2 per cent for Meta Platforms. This means that the company is still actively investing a significant portion of its profits. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Tencent_07.01.png" alt="chart Tencent" /> Source: Tradingview <h2 id="heading-scroll4">Alibaba – Chinese Amazon</h2> Alibaba is a global e-commerce leader, known for its Taobao and Tmall platforms, which enable commerce for both consumers and businesses. The company is also active in the areas of cloud services (Alibaba Cloud), online payments (Alipay) and logistics (Cainiao). It operates the largest e-commerce shop in China, hence it can be compared to the US Amazon. Although Alibaba has experienced dynamic growth of 17 per cent per year in the past five years, this growth has not fully translated into profits. Nevertheless, the price-to-earnings ratio currently stands at 13.7, compared to 55.7 for Amazon, meaning that Alibaba is almost five times cheaper than its US competitor. An additional advantage is that Alibaba pays out as much as 10.2 per cent of value to investors, mainly through share buybacks. In comparison, the rate of return on holding Amazon shares is only 0.6 per cent per year. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Alibaba_07.01.png" alt="chart Alibaba" /> Source: Conotoxia MT5, Alibaba, Daily <h2 id="heading-scroll5">Summary</h2> Let us once again recall the words of Howard Marx: ‘Investment success comes not from buying good things, but from buying them at a favourable price’. Chinese companies, despite the difficulties following the real estate crisis, offer attractive investment opportunities, especially compared to US giants. Baidu, ZTO Express, Tencent and Alibaba, despite their various challenges, stand out for their low valuations relative to cash flow generated and high shareholder returns. Baidu and Tencent are particularly interesting due to their low P/FCF ratios, while Alibaba offers a high return on investment. Compared to US companies such as Alphabet, FedEx or Amazon, Chinese companies may be a more viable choice, offering higher returns and lower valuations.   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comTue, 07 Jan 2025 15:22:00 +0100Howard Marks, a well-known investor stated: ‘Investment success comes not from buying good things, but from buying them at a favourable price’. Today, Chinese companies that have not recovered from the property crisis are offering such investment opport...Next week to watch (6-10.01.2025)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-6-10-01-2025https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-6-10-01-2025The so-called Father Christmas rally, which in theory should have lasted from the final five sessions of December to the two early sessions of January, was not observed in the financial markets this year. The main S&P 500 index fell by 2 per cent during this period, while the Nasdaq 100 technology index lost 2.7 per cent. As a result, the new year began in an atmosphere of pessimism in the markets. Similar weakness can be seen in the market for European currencies. The EUR/USD exchange rate fell below the 1.03 level and continues its downward trend, which translates into a weakening of the Polish zloty. The USD/PLN exchange rate rose above 4.15, reaching its highest level in more than a year. In the coming week, we will learn preliminary inflation readings from Germany and the euro area for December 2024. The key event, however, will be the US unemployment data, which, if they deviate significantly from forecasts, could set the direction for markets for the coming quarter.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">German consumer price index (CPI) monthly (December)</a></li> <li><a href="#heading-scroll2">Eurozone consumer price index (CPI) monthly (December)</a></li> <li><a href="#heading-scroll3">US unemployment rate (December)</a></li> </ol> <h2 id="heading-scroll1">Monday, 6.01, 14:00 CET, German consumer price index (CPI) monthly (December)</h2> Inflation in Germany rose to 2.2 per cent year-on-year in November 2024 from 2 per cent in October, reaching its highest level in four months. Services inflation remained at 4 per cent, while declines in energy prices slowed. Food prices rose by 1.8 per cent, up from 2.3 per cent earlier.  Analysts forecast a decline in German CPI inflation to 2 per cent year-on-year, the ECB's policy target. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_Niemcy_03.01.png" alt="graph inflation Germany" /> Source: Tradingeconomics.com A higher-than-expected reading could have a bullish impact on the EUR, while a lower-than-expected reading could be bearish for the EUR. Impact: EUR/USD, EUR/GBP, EUR/PLN <h2 id="heading-scroll2">Tuesday, 7.01, 11:00 CET, Eurozone consumer price index (CPI) monthly (December)</h2> As with German inflation, Eurozone inflation rose to 2.2 per cent year-on-year in November 2024, up from 2 per cent in October, lower than the initial estimate of 2.3 per cent. The increase was mainly due to base effects, i.e. comparisons to prices a year ago, when declines in energy prices no longer affected the data. Declines were recorded in the prices of services and food, alcohol and tobacco. Analysts forecast an increase in CPI inflation in the euro area to 2.4 per cent year-on-year. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_EU_03.01.png" alt="EU inflation graph" /> Source: Tradingeconomics.com A higher-than-expected reading could have a bullish impact on the EUR, while a lower-than-expected reading could be bearish for the EUR. Impact: EUR/USD, EUR/GBP, EUR/PLN <h2 id="heading-scroll3">Friday, 10.01, 14:30 CET, US unemployment rate (December)</h2> The US unemployment rate in November 2024 was 4.2 per cent, not far from the rate recorded in the previous month. The number of unemployed rose to 7.1 million people, surpassing the figures from a year ago, when the rate was 3.7 per cent and the number of unemployed was 6.3 million. Interestingly, the U-6 unemployment rate, which is measured in the same way as in Europe, was already 7.8 per cent. Analysts forecast the US unemployment rate to remain at 4.2 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_bezrobocie_US_03.01.png" alt="graph US unemployment" /> Source: Tradingeconomics.com A higher-than-expected reading could have a bearish impact on the USD, while a lower-than-expected reading could act bullishly for the USD. Impact: EUR/USD, USD/PLN   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comFri, 03 Jan 2025 13:40:00 +0100The so-called Father Christmas rally, which in theory should have lasted from the final five sessions of December to the two early sessions of January, was not observed in the financial markets this year. The main S&P 500 index fell by 2 per cent during...These may turn out to be the worst investments in 2025 that many investors will fall forhttps://invest.conotoxia.com/investment-research/comments/these-may-turn-out-to-be-the-worst-investments-in-2025-that-many-investors-will-fall-forhttps://invest.conotoxia.com/investment-research/comments/these-may-turn-out-to-be-the-worst-investments-in-2025-that-many-investors-will-fall-forMany of us wonder what is worth investing in the current environment? The legendary Warren Buffett suggests how to find the answer to this question. According to him, two principles are key. The first is: never lose money. The second is: never forget the first rule. With this in mind, here are the types of investments should be considered avoiding, when making decisions in 2025.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Tesla</a></li> <li><a href="#heading-scroll2">Crude oil</a></li> <li><a href="#heading-scroll3">DAX 40</a></li> <li><a href="#heading-scroll4">Intel</a></li> </ol> <h2 id="heading-scroll1">Tesla</h2> Undoubtedly one of the biggest beneficiaries of Donald Trump's presidential election win was Elon Musk, who now owns a 12.8 percent stake in Tesla worth as much as $142 billion. The company's shares, following the expected imposition of prohibitive tariffs on overseas competitors, have gained as much as 62 percent over the past year. However, as another famous investor Howard Marks points out, ‘Investment success comes not from buying good things, but from buying them at a good price’. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Tesla_02.01.png" alt="Tesla chart" /> Source: Conotoxia MT5, Tesla, Daily Tesla's current share price could hardly be called favourable, as it suggests that the company's profits could double every year for the next five years. The basic valuation price-to-earnings (P/E) ratio is currently as high as 104, while the market average is hovering around 25. Even in the most optimistic scenario, the projected growth rate exceeds the previous one, which was still impressive - averaging 42 percent per year over the last decade. It is also worth noting that Tesla operates in an extremely capital-intensive industry and has to spend as much as 75 percent of the profit it generates to maintain its growth rate. As such, Invest.Conoxotia.com analysts warn that 2025 could prove to be a negative surprise for investors considering buying Tesla shares at their historic peaks. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/tabela_Tesla_ENG_02.01.png" alt="Tesla Valuation" /> Source: Conotoxia own analysis <h2 id="heading-scroll2">Crude oil</h2> 2024 brought surprises for investors in the WTI oil market. The price of crude oil fell at one point to a support level of USD 65 per barrel. Despite the temporary rebound, it is believed that crude oil prices could continue to fall significantly. As the largest crude oil producer, the US accounts for 21.4 percent of global production, while the OPEC+ group supplies nearly a third of global production. In the US, production has reached record levels under the presidency of Joe Biden, and Donald Trump's campaign promises to further increase production, in order to lower crude oil prices. Meanwhile, OPEC+ maintains an output cut of 5.7 percent of global demand to stabilise prices. However, this strategy is proving ineffective due to rising supply from the US and weakening demand. Faced with these challenges, OPEC+ members may decide to end the policy of cutting production, to minimise their own losses. Maintaining costly cutback policies may soon be curtailed, which could consequently lead to a further decline in crude oil prices, on global markets. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_XTIUSD_02.01.png" alt="chart XTIUSD" /> Source: Conotoxia MT5, XTIUSD, Daily <h2 id="heading-scroll3">DAX 40</h2> In 2024, the German economy contracted by 0.3 percent and industry lost as much as 4.6 percent. Despite this, the DAX 40 index rose by 18 percent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/Wykres_DAX_02.01.png" alt="chart DAX 40" /> Source: Conotoxia MT5, DE40, Daily Passenger car sales in Germany fell by 27.8 percent year-on-year in August, with registrations of electric cars down by as much as 69 percent. Only Volkswagen reported an increase in sales (+4.2 percent), while BMW, Mercedes-Benz and Porsche recorded declines. Over the decade, German shares grew by an average of 4.2 percent, compared to 13.1 percent in the USA. The valuation of the DAX 40 index assumes earnings growth of 16.5 percent per year, which analysts at Invest.Conotoxia.com view as unlikely due to increasing competition, especially from China. For this reason, there could be a correction on the DAX 40 index in 2025. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/tabela_DAX_ENG_02.01.png" alt="DAX 40 valuation" /> Source: Conotoxia own analysis <h2 id="heading-scroll4">Intel</h2> Intel, once considered a leader in its industry, is now facing serious financial problems. The company, which designs and manufactures processors and graphics cards, has missed out on key technological milestones, giving way to competitors such as Nvidia, AMD and TSMC. Despite strong market growth driven by the development of artificial intelligence technology, Intel's sales fell by 6 percent year-on-year. This caused the company's shares to be repriced 70 percent below their historic highs. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Intel_02.01.png" alt="chart Intel" /> Source: Conotoxia MT5, Intel, Daily To catch up with its competitors, Intel had to incur high capital costs, which led to a record loss of $16.6 billion in the last quarter. The loss represents about 20 percent of the company's current capitalisation of $85.5 billion. The company plans to bring its new lithography technology into full production in Q3 2025. However, these forecasts, published in 2021, have not yet been updated, raising doubts about their realisation. The current valuation, based on the company's pre-crisis results, assumes that sales would have to grow at a rate of around 37 percent per year for the next few years. According to Invest.Conotoxia.com analysts, rising operating costs will mean that many investors may be disappointed with the company's performance in 2025. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/tabela_intel_ENG_02.01.png" alt="Intel Valuation" /> Source: Conotoxia own analysis   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comThu, 02 Jan 2025 15:27:00 +0100Many of us wonder what is worth investing in the current environment? The legendary Warren Buffett suggests how to find the answer to this question. According to him, two principles are key. The first is: never lose money. The second is: never forget th...Next week to watch (23-27.12.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-23-27-12-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-23-27-12-2024Merry Christmas! Christmas already starts on Tuesday, so we wish you, dear investors, all the best! Due to Christmas, most markets will be closed on Tuesday, Wednesday and Thursday. Even before Christmas, the Fed cut interest rates by 25 bps, which boosted the dollar. USD/PLN rose to 4.12 and EUR/USD fell below 1.04. The meeting had a distinctly hawkish tone, with inflation and GDP growth forecasts for 2025 raised and fears of recession giving way to optimistic scenarios. In the short term, the dollar remains strong, although further appreciation may be limited if the US economy weakens in 2025. The festive period also affects the timing of macroeconomic data releases. Key readings this week include final UK GDP data on Monday and Friday's inflation reading in Japan.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">UK gross domestic product (GDP) quarterly (Q3).</a></li> <li><a href="#heading-scroll2">Japan's core consumer price index (CPI) annualised (December)</a></li> </ol> <h2 id="heading-scroll1">Monday 23.12, 8:00 CET, UK gross domestic product (GDP) quarterly (Q3).</h2> UK GDP grew by 0.1 per cent quarter-on-quarter in Q3 2024, the slowest in three quarters. The services sector grew by 0.1 per cent. Construction grew by 0.8 per cent and the manufacturing sector fell by 0.2 per cent. Net trade improved performance as imports fell faster than exports. Household spending increased by 0.5 per cent, business investment by 1.2 per cent and government consumption by 0.6 per cent. The economy accelerated at an annualised rate of 1 per cent (0.7 per cent in Q2). Analysts forecast confirmation of quarterly UK GDP growth of 0.1 per cent q/q. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_UK_20.12.png" alt="UK GDP graph" /> Source: Tradingeconomics.com A higher-than-expected reading could have a bullish impact on the GBP, while a lower-than-expected reading could be bearish for the GBP. Impact: GBP/USD, EUR/GBP, GBP/PLN <h2 id="heading-scroll2">Friday, 27.12, 00:30 CET, Japan's core consumer price index (CPI) annualised (December)</h2> Inflation in Japan is still around the Bank of Japan's (BoJ) target. Tokyo's core consumer price index rose by 2.2 per cent year-on-year in November 2024, reaching its highest level in three months. At the last meeting, BoJ Governor Kazuo Ueda suggested a possible interest rate hike in the face of a weak yen. Analysts forecast an increase in Japan's core CPI inflation to 2.3 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_Japonii_20.12.png" alt="chart inflation of Japan" /> Source: Tradingeconomics.com A higher-than-expected reading could have a bullish impact on the JPY, while a lower-than-expected reading could be bearish for the JPY. Impact: EUR/JPY, USD/JPY   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comFri, 20 Dec 2024 14:19:00 +0100Merry Christmas! Christmas already starts on Tuesday, so we wish you, dear investors, all the best! Due to Christmas, most markets will be closed on Tuesday, Wednesday and Thursday. Even before Christmas, the Fed cut interest rates by 25 bps, which b...Next week to watch (16-20.12.)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-16-20-12https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-16-20-12The following week is the last this year before the Christmas holidays start. It means that nearly three weeks’ worth of economic news may be expected in the following days. The Fed interest rate decision is expected on Wednesday, followed by the Bank of Japan and Bank of England with the same decision on Thursday. In Europe, ECB President Lagarde speaks on Monday and ZEW economic sentiment is published on Tuesday. The latest inflation data will be published in the Eurozone and England as well. In the US, retail sales, home sales, GDP growth rate, and PCE price index are expected to be reported next week. Key data are discussed in more detail below. Table of Contents: <ol> <li><a href="#heading-scroll1">UK Consumer Price Index (CPI) YoY (November)</a></li> <li><a href="#heading-scroll2">Eurozone Consumer Price Index (CPI) YoY (November)</a></li> <li><a href="#heading-scroll3">Fed Interest Rate Decision</a></li> <li><a href="#heading-scroll4">UK Interest Rate Decision</a></li> <li><a href="#heading-scroll5">US GDP growth rate (QoQ) Q3</a></li> </ol>   <h3>Wednesday 18.12. 08:00 CET, UK Consumer Price Index (CPI) YoY (November)</h3> The inflation rate in the UK rose to 2.3% in October 2024, marking the highest level in six months, up from 1.7% in September. This figure surpassed both the Bank of England's target and the market expectation of 2.2%.  The primary driver of this increase was housing and household services, which rose to 5.5% from 3.8% in the previous month. This was largely due to changes in electricity prices (falling to -6.3% from -19.5%) and gas prices (dropping to -7.3% from -22.8%), following the implementation of Ofgem's increased energy price cap in October 2024.  Additionally, prices for restaurants and hotels slightly increased (4.3% compared to 4.1%), and housing and utility costs rebounded (up to 2.9% from -1.7%). Service prices also saw a marginal lift to 5% from 4.9%, aligning with the central bank's projections. In contrast, food inflation remained unchanged at 1.9%, while the most significant offset to inflation came from recreation and culture, which decreased to 3% from 3.8%.  Overall, the Consumer Price Index (CPI) increased by 0.6% from the previous month, and the annual core inflation rate slightly rose to 3.3% from 3.2%. Analysts expect the UK's inflation rate to remain at 2.3% from the previous month's reading.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/image1u.png" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bearish effect on the GBP, while a lower-than-expected reading could be bullish for the GBP. Impact: USD/GBP, EUR/GBP   <h3>Wednesday 18.12. 11:00 CET, Eurozone Consumer Price Index (CPI) YoY (November)</h3> According to the preliminary estimates, the annual inflation rate in the Eurozone rose for the second consecutive month to 2.3% in November, up from 2% in the previous month, aligning with market predictions. This year-end increase was anticipated, mainly due to base effects, as the significant drops in energy prices of the prior year are no longer influencing annual rates. Energy prices saw a decline of 1.9%, which was less severe than the 4.6% decrease recorded in October. Additionally, costs for non-energy industrial goods increased by 0.7%, higher than the 0.5% increase noted in October.  Conversely, inflation for services slowed to 3.9% from 4%, and the increase for food, alcohol, and tobacco moderated to 2.8% from 2.9%. Meanwhile, core inflation, which excludes the more volatile categories of food, energy, alcohol, and tobacco, held steady at 2.7%, contrary to expectations for a rise to 2.8%. Month-over-month, the Consumer Price Index (CPI) decreased by 0.3%, following a 0.3% increase in October.  Analysts' expectations align with the initial estimates of the 2.3% inflation rate in the Eurozone in November.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/image2u.png" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bearish effect on the EUR, while a lower-than-expected reading could be bullish for the EUR. Impact: EUR/USD, EUR/GBP, EUR/PLN   <h3>Wednesday 18.12. 20:00 CET, Fed Interest Rate Decision</h3> Minutes from the Federal Reserve's November 6-7 meeting reflected optimism that inflation is easing while the labour market remains strong, suggesting the potential for additional interest rate cuts at a cautious pace. Officials emphasized that monetary policy decisions depend on evolving economic conditions and warned against premature reductions. They highlighted challenges in policymaking due to recent data volatility and uncertainty about the neutral interest rate's influence on the economy. Some participants favoured maintaining restrictive rates if inflation persisted, while others supported faster cuts if labour market conditions weakened. The meeting did not address the economic implications of Donald Trump’s recent presidential election win but stressed the importance of flexibility in policy decisions. Analysts expect the Fed funds interest rate to be lowered by 25 basis points to 4.50% in the upcoming meeting.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/image3u.png" /> Source: Tradingeconomics.com A decision on a higher-than-expected interest rate may have a bullish effect on the USD, while a decision on a lower-than-expected interest rate could be bearish for the USD. Impact: EUR/USD, USD/GBP, USD/PLN   <h3>Thursday 19.12. 13:00 CET, UK Interest Rate Decision</h3> As anticipated, the Bank of England reduced its Bank Rate by 25 basis points to 4.75% during its November 2024 meeting. This marks the second rate cut in four years, following the initiation of the easing cycle in August. Eight of the nine Monetary Policy Committee (MPC) members supported the decision, exceeding expectations of seven votes, while Catherine Mann voted to maintain the rate. The decision was driven by evidence of slowing price growth in the UK, with September’s inflation falling to a three-year low of 1.7%. Additionally, services inflation—a measure of underlying price pressures, which tends to be more persistent—dropped to a two-year low of 4.9%, though it remained relatively high. While the Bank projects underlying inflation to continue moderating in the medium term, it estimates that the Labour Party’s expansionary budget may temporarily increase inflation by up to 0.5 percentage points at its peak. The Bank now forecasts inflation to reach 2.5% by the end of the year and 2.2% by 2026. The budget is also expected to boost GDP by 0.75% at its peak impact within one year. Analysts expect the UK interest rate to remain at 4.75% in the upcoming meeting.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/image4u.png" /> Source: Tradingeconomics.com A decision on a higher-than-expected interest rate may have a bullish effect on the GBP, while a decision on a lower-than-expected interest rate could be bearish for the GBP. Impact: EUR/GBP, USD/GBP, GBP/PLN   <h3>Thursday 19.12. 14:30 CET, US GDP Growth rate (QoQ) Q3</h3> Current estimates suggest that the US economy grew at an annualised rate of 2.8% in Q3 2024, unchanged from the initial estimate and slightly below the 3% growth recorded in Q2. Personal spending rose fastest since Q1 2023 but was revised slightly down from the preliminary estimate (3.5% vs. 3.7%). This increase was driven by a 5.6% jump in goods consumption (revised from 6%) and strong service spending, which remained steady at 2.6%. Government consumption growth was confirmed at 5%. Net trade contributed slightly less to growth than initially reported (-0.57 percentage points vs. -0.56 percentage points), with both exports (7.5% vs. 8.9%) and imports (10.2% vs. 11.2%) revised downward. Meanwhile, private inventories subtracted 0.11 percentage points from GDP growth, an improvement from the previously estimated 0.17 percentage point drag. Fixed investment performed better than expected, rising 1.7% instead of 1.3%. Equipment investment saw significant gains (10.6% vs. 11.1%), while declines were noted in structures (-4.7% vs. -4%) and residential investment (-5% vs. -5.1%). Analysts' expectations align with previous estimates of the US’s 2.8% GDP growth rate in Q3 2024.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/image5u.png" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bullish effect on the USD, while a lower-than-expected reading could be bearish for the USD. Impact: EUR/USD, USD/GBP, USD/PLN   Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comFri, 13 Dec 2024 13:45:00 +0100The following week is the last this year before the Christmas holidays start. It means that nearly three weeks’ worth of economic news may be expected in the following days. The Fed interest rate decision is expected on Wednesday, followed by the Bank...Next week to watch (9-13.12.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-9-13-12-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-9-13-12-2024The President of the National Bank of Poland, Adam Glapiński, tightened his rhetoric, pushing back the prospect of interest rate cuts in Poland to 2026. This decision strengthened the zloty, bringing the EUR/PLN exchange rate down to 4.26 and the USD/PLN exchange rate to 4.03, while at the same time reducing expectations for rate cuts in 2025. In the coming week, markets' attention will focus on Japan's GDP reading, US CPI inflation and interest rate decisions by the Fed, ECB, Bank of Canada and Swiss National Bank. Currency investors may be keeping a close eye on monetary policy plans in these economies.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Japan's gross domestic product (GDP) quarterly (Q3).</a></li> <li><a href="#heading-scroll2">US consumer price index (CPI) annualised (November)</a></li> <li><a href="#heading-scroll3">Canada's interest rate decision</a></li> <li><a href="#heading-scroll4">Swiss interest rate decision</a></li> <li><a href="#heading-scroll5">Eurozone interest rate decision</a></li> </ol> <h2 id="heading-scroll1">Monday 9.12, 00:50 CET, Japan's gross domestic product (GDP) quarterly (Q3).</h2> From preliminary estimates, we know that Japanese GDP grew by 0.2 per cent (quarter-on-quarter) in Q3 2024 (0.3 per cent year-on-year), down from 0.5 per cent in Q2 2024. This is the second consecutive increase showing a rather fragile economic recovery. Business investment fell by 0.2 per cent after previously rising by 0.9 per cent. Private consumption, driven by rising wages, exceeded forecasts and government spending rose for the third consecutive quarter, supporting the economy after the summer's natural disasters. Analysts forecast a confirmation of Japan's quarterly GDP growth of 0.2 per cent q/q. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_Japonii_06.12.png" alt="chart of Japan's GDP" /> Source: Tradingeconomics.com A higher-than-expected reading could have a bullish impact on the JPY, while a lower-than-expected reading could be bearish for the JPY. Impact: USD/JPY, EUR/JPY <h2 id="heading-scroll2">Wednesday, 11.12, 14:30 CET, US consumer price index (CPI) annualised (November)</h2> US CPI inflation rose to 2.6 per cent in October 2024 from 2.4 per cent in September. This was the first increase in seven months. Higher energy costs, especially natural gas, impacted the result, although food and transport prices fell. Jerome Powell, Fed chairman, announced that he was concerned about rising inflation caused by Donald Trump's announced tariff policy. Analysts forecast a rise in US CPI inflation to 2.7 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_CPI_USA_06.12.png" alt="graph US inflation" /> Source: Tradingeconomics.com A higher-than-expected reading could have a bullish impact on the USD, while a lower-than-expected reading could be bearish for the USD. Impact: EUR/USD, USD/PLN <h2 id="heading-scroll3">Wednesday, 11.12, 15:45 CET, Canada's interest rate decision</h2> The Bank of Canada cut its main interest rate by 50 bps to 3.75 per cent in October 2024, accelerating the pace of cuts after earlier cuts of 25 bps. The decision was justified by a fall in inflation to 1.6 per cent in September, below the 2 per cent target, and a weakening consumption and labour market (unemployment rose above 6.5 per cent). The bank forecasts inflation close to the target in the near term and GDP growth of 1.2 per cent in 2024 and 2.1 per cent in 2025. Analysts forecast another Bank of Canada interest rate cut of 25 bps, to 3.5 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_Kanada_06.12.png" alt="wykres stopy Kanada" /> Source: Tradingeconomics.com A higher-than-expected interest rate could be bullish for CAD, while a lower-than-expected rate could act bearishly on CAD. Impact: EUR/CAD, USD/CAD <h2 id="heading-scroll4">Wednesday, 11.12, 15:45 CET, Swiss interest rate decision</h2> The Swiss National Bank cut the interest rate by 25 bps to 1 per cent in September 2024, continuing its monetary easing cycle. The decision was justified by a decline in inflationary pressures, supported by the appreciation of the franc. Inflation stood at 1.1 per cent in August and inflation forecasts for 2024-2026 were lowered. GDP is expected to grow by 1 per cent in 2024 and 1.5 per cent in 2025.  Analysts are forecasting another 25bp interest rate cut by the Swiss National Bank, to 0.75 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_szwajcaria_06.12.png" alt="rate chart Switzerland" /> Source: Tradingeconomics.com A higher-than-expected interest rate could be bullish for the CHF, while a lower-than-expected rate could act bearishly on the CHF. Impact: EUR/CHF, USD/CHF, CHF/PLN <h2 id="heading-scroll5">Wednesday, 11.12, 15:45 CET, Eurozone interest rate decision</h2> In October, the European Central Bank (ECB) cut its main interest rate by 25 bps to 3.4 per cent. The European Central Bank has signalled that it is increasingly considering interest rate cuts, according to reports from its November meeting. Inflation is expected to ease, mainly due to falling energy prices, but officials remain cautious about domestic inflationary pressures, particularly strong wage growth and sluggish labour productivity. Analysts forecast another ECB rate cut of 25 bps, to 3.15 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Stopy_EU_06.12.png" alt="EU rate graph" /> Source: Tradingeconomics.com A higher-than-expected interest rate could be bullish for the EUR, while a lower-than-expected rate could act bearishly on the EUR. Impact: EUR/USD, EUR/PLN   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comFri, 06 Dec 2024 13:30:00 +0100The President of the National Bank of Poland, Adam Glapiński, tightened his rhetoric, pushing back the prospect of interest rate cuts in Poland to 2026. This decision strengthened the zloty, bringing the EUR/PLN exchange rate down to 4.26 and the USD/PL...Next week to watch (2-6.12.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-2-6-12-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-2-6-12-2024By the end of November, the dollar had clearly lost value, with the USD/PLN exchange rate falling from annual highs of 4.20 to 4.07, while the EUR/PLN exchange rate approached 4.28 , in line with forecasts of further weakness. In Poland, inflation fell from 5.0 per cent to 4.6 per cent in November, but is expected to rise again in the first quarter of 2025, culminating at 5.5 per cent in March. The Monetary Policy Council plans to resume interest rate cuts in March at the earliest, with the prospect of cautious policy easing in 2025, comprising 3-4 cuts of 25bp each. It is expected that in 2025, the dollar could fall to PLN 3.85 and the euro below PLN 4.30. The zloty has limited potential to strengthen against the euro, but could continue its gains against the dollar. In the week ahead, attention will be drawn to Wednesday's MPC interest rate decision, Thursday's OPEC+ meeting, which will discuss a possible move away from oil production cuts, and Friday's US labour market data.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Poland's interest rate decision</a></li> <li><a href="#heading-scroll2">OPEC+ cartel meeting on oil production policy</a></li> <li><a href="#heading-scroll3">US unemployment rate (November)</a></li> </ol> <h2 id="heading-scroll1">Wednesday, 4.12, 14:30 CET, Poland's interest rate decision</h2> At its latest meeting, the Monetary Policy Council (MPC) decided to maintain the NBP's main interest rate at 5.75 per cent. NBP Deputy President Marta Kightley said that the MPC may start discussing interest rate cuts after the publication of the March 2025 inflation projection. Inflation currently stands at around 5 per cent, and could slightly exceed this level in the first quarter of 2025. The MPC's decisions will depend on the situation in the energy market and the overall health of the economy. The government has announced an energy price freeze for nine months in 2025, which could limit the rise in inflation. If the freeze is maintained, inflation could fall to 3.5 per cent in the second half of 2025, approaching the NBP target (2.5 per cent ± 1 pp). The March inflation projection could be crucial for further decisions by the MPC. If conditions are favourable, a gradual reduction in interest rates is possible in the second half of next year. Analysts forecast interest rates to remain at 5.75 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_PL_29.11.png" alt="chart of interest rates in Poland" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the PLN, while a lower-than-expected reading could act bearishly on the PLN. Impact: EUR/PLN, USD/PLN, GBP/PLN, CHF/PLN <h2 id="heading-scroll2">Thursday, 5.12, OPEC+ cartel meeting on oil production policy</h2> The largest association of oil producing countries will hold a meeting on Thursday. The organisation is considering delaying a planned January 2025 increase in oil production due to difficulties caused by a global slowdown in demand and an increase in oil production outside the group. OPEC+ currently maintains production cuts of 5.86 million barrels per day (about 5.7 per cent of global demand). The price of Brent crude is hovering around $70-80 per barrel, which is influencing the group's decisions. Talks between the main OPEC+ ministers, including representatives of Saudi Arabia, Russia and Iraq, have taken place over the past few days. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_XTIUSD_29.11.png" alt="XTIUSD chart" /> Source: Tradingeconomics.com Higher-than-expected production can act bearishly on the oil price, while lower-than-expected production can act bullishly on the oil price. Impact: XTI/USD, XBR/USD <h2 id="heading-scroll3">Friday, 6.12, 14:30 CET, US unemployment rate (November)</h2> The US unemployment rate stood at 4.1 per cent in October 2024, maintaining the previous month's level and in line with forecasts. Despite the recent rise in unemployment, the labour market situation in the world's largest economy remains stable. According to the measure used in Europe (the so-called U-6 index), unemployment in the USA is 7.7 per cent.  The analysts' consensus is that the US unemployment rate will remain at its current level in the near term. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_bezrobocie_USA_29.11.png" alt="graph US unemployment" /> Source: Tradingeconomics.com A higher-than-expected reading could be bearish for the USD, while a lower-than-expected reading could act bullishly on the USD. Impact: EUR/USD, USD/PLN   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comFri, 29 Nov 2024 13:26:00 +0100By the end of November, the dollar had clearly lost value, with the USD/PLN exchange rate falling from annual highs of 4.20 to 4.07, while the EUR/PLN exchange rate approached 4.28 , in line with forecasts of further weakness. In Poland, inflation fell ...How do you safeguard your assets in case of crisis and war?https://invest.conotoxia.com/investment-research/comments/how-do-you-safeguard-your-assets-in-case-of-crisis-and-warhttps://invest.conotoxia.com/investment-research/comments/how-do-you-safeguard-your-assets-in-case-of-crisis-and-warSafeguarding oneself in the event of having to leave one's home or country requires a carefully considered strategy, including both tangible and intangible goods. During economic or military crises, few assets avoid being overvalued. <h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Currencies for a ‘black hour’</a></li> <li><a href="#heading-scroll2">‘Safe Havens’</a></li> </ol> <h2 id="heading-scroll1">Currencies for a ‘black hour’</h2> In moments of panic, people often swap illiquid assets, such as real estate, for more liquid ones, such as currencies, which lowers the value of most goods while boosting the value of cash. We are talking especially about those currencies that are considered safe: the US dollar, the pound sterling or the Swiss franc. An example is the outbreak of war in Ukraine, which caused the USD/PLN exchange rate to rise to a record high around 5.00. Therefore, investing in safe currencies may seem reasonable. However, there are limitations associated with cash, for example in the context of transport. <h2 id="heading-scroll2">‘Safe Havens’</h2> Faced with the bleakest scenario, investors look for so-called safe havens. These include, among others, currencies of developed countries, gold, precious stones and bonds. The king of metals is often associated with security in times of crisis, but historical analysis shows that it has not always been an effective protection in times of war. The data shows that in 44 percent of the cases following the outbreak of global conflicts since 1971, the price of gold rose. Although demand from central banks is driving the price up, the bullion cannot be considered a reliable ‘safe haven’. Owning jewellery or gold coins in physical form may have its advantages, but it is worth remembering that selling such assets in a crisis may involve a steep discount. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_26.11.png" alt="chart gold and war" /> Source: Conotoxia own study Government bonds are another option considered a safe haven, offering stability as they are priced in a country's currency and pay interest. Although bonds are not as liquid as currencies, the current attractive yields on Western government bonds (in the order of 4-6 percent) make them worth considering as part of an asset protection strategy.   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comTue, 26 Nov 2024 14:19:00 +0100Safeguarding oneself in the event of having to leave one's home or country requires a carefully considered strategy, including both tangible and intangible goods. During economic or military crises, few assets avoid being overvalued. Next week to watch (25-29.11.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-25-29-11-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-25-29-11-2024NVIDIA announced record results for the third quarter of fiscal 2025, with revenues of $35.1 billion . The main driver of growth was the Data Centre segment, which brought in $30.8 billion . With these results, NVIDIA overtook Apple in terms of market capitalisation to become the world's most valuable company. The company's CEO Jensen Huang stressed that artificial intelligence is revolutionising the industry and that demand for NVIDIA technologies, such as Hopper and Blackwell, is huge. The company forecast Q4 revenue of $37.5 billion and a high gross margin . The results confirm that NVIDIA retains its leadership position in advanced technologies, addressing the global demand for AI-based solutions. In the coming week, we will learn preliminary US GDP readings and CPI inflation readings from the Eurozone and PCE from the US.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">US gross domestic product (GDP) quarterly (Q3)</a></li> <li><a href="#heading-scroll2">US personal consumption expenditures (PCE) monthly price index (October)</a></li> <li><a href="#heading-scroll3">Eurozone consumer price index (CPI) monthly (November)</a></li> </ol> <h2 id="heading-scroll1">Wednesday, 27.11, 14:30 CET, US gross domestic product (GDP) quarterly (Q3)</h2> The US economy grew by 2.8 per cent in Q3 2024, slower than the 3 per cent in the previous quarter, based  on the preliminary GDP reading. Consumers spent more, especially on goods (up 6 per cent) and services such as medicines, cars, medical care and dining out. Government spending also increased, mainly on defence. Foreign trade was less of a drag on economic growth, with exports and imports increasing. Sales of capital goods increased markedly. In contrast, investment in residential construction declined. This picture for the US, amid a global slowdown in Europe and China, shows the strength of the US economy. Analysts forecast a confirmation of the US GDP growth reading of 2.8 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_USA_22.11.png" alt="graph of US GDP" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD. Impact: EUR/USD, USD/PLN, US500 <h2 id="heading-scroll2">Wednesday, 27.11, 16:00 CET, US personal consumption expenditures (PCE) monthly price index (October)</h2> PCE inflation, which measures total consumer spending in the economy (as opposed to the CPI, which refers to spending by the average citizen), fell to 2.1 per cent in September, reaching its lowest level since March 2021. It thus virtually equated with the Federal Reserve's target, which may prompt central bank members to consider further interest rate cuts at upcoming meetings. Analysts predict that PCE inflation will rise slightly in October, reaching 2.2 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PCE_USA_22.11.png" alt="PCE inflation graph" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD. Impact: EUR/USD, USD/PLN <h2 id="heading-scroll3">Friday, 29.11, 11:00 CET, Eurozone consumer price index (CPI) monthly (November)</h2> Annual inflation in the euro area rose to 2 per cent in October 2024 from 1.7 per cent in September, in line with expectations. The increase was due to so-called base effects, as last year's fall in energy prices is no longer taken into account. Prices of food, manufactured goods and services rose faster, and core inflation remained at 2.7 per cent, the lowest since February 2022. Analysts forecast a rebound in EUR area CPI inflation, to 2.3 per cent in November. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_CPI_EU_22.11.png" alt="EU CPI inflation graph" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR. Impact: EUR/USD, EUR/PLN   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comFri, 22 Nov 2024 13:16:00 +0100NVIDIA announced record results for the third quarter of fiscal 2025, with revenues of $35.1 billion (+17 per cent quarterly, +94 per cent y-o-y). The main driver of growth was the Data Centre segment, which brought in $30.8 billion (+17 per cent quarte...Next week to watch (18-22.11.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-18-22-11-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-18-22-11-2024Almost all “super-investors”, including Warren Buffett, Bill Gates and Michael Burry, have released 13F reports outlining changes to their portfolios for Q3 2024. Despite the bull market, “super-investors” regularly sell more stocks than they buy. The largest reductions were in the financials, technology and industrials sectors. The largest purchases were made in the consumer and basic goods sectors. Warren Buffett, who has record cash of $320 billion, sold another 25 per cent of Apple shares, 23 per cent of Bank of America shares and almost his entire stake in media giant SiriusXM. He shed as much as 13 per cent of his portfolio during the quarter, and this is the seventh consecutive quarter in which he has been on the sellers' side, which may indicate signs of an overvalued market. Michael Burry , known for predicting the 2008 crisis, increased positions in Chinese technology companies such as JD.com, Baidu and Alibaba, which gained in value after China announced its stimulus package. At the end of Q3, Chinese stocks accounted for 65.5 per cent of his portfolio, but these investments are facing pressure from US sanctions. In the coming week, we will learn the final inflation readings from the Eurozone and the UK for October. We will also find out whether Germany's economy is emerging from two years of economic stagnation.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Eurozone consumer price index (CPI) monthly (October)</a></li> <li><a href="#heading-scroll2">UK consumer price index (CPI) monthly (October)</a></li> <li><a href="#heading-scroll3">Germany's gross domestic product (GDP) quarterly (Q3)</a></li> </ol> <h2 id="heading-scroll1">Tuesday, 19.11, 11:00 CET, Eurozone consumer price index (CPI) monthly (October)</h2> We know from preliminary data that annual inflation in the euro area rose to 2 per cent in October 2024, up from 1.7 per cent in September, exceeding forecasts of 1.9 per cent. Inflation shot up, against the European Central Bank's target. Energy prices fell more slowly in October than the month before, while prices of food, alcohol, tobacco and manufactured goods rose faster while inflation in the services sector stabilised at 3.9 per cent. Analysts forecast a confirmation of the euro area CPI inflation reading of 2 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_UE_15.11.png" alt="EU inflation graph" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR. Impact: EUR/USD, EUR/PLN <h2 id="heading-scroll2">Wednesday, 20.11, 8:00 CET, UK consumer price index (CPI) monthly (October)</h2> Annual inflation in the UK fell to 1.7 per cent in September 2024, the lowest level since April 2021. The fall in inflation was mainly due to a drop in transport prices. The price of petrol fell by 10.9 per cent year-on-year. The prices of housing, utilities and furniture continued to decline, while the cost of leisure and culture and restaurants rose. Inflation in services fell to 4.9 per cent, the lowest level since May 2022. Analysts forecast that October's reading will illustrate another rise in UK CPI inflation to 2 per cent.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_UK_15.11.png" alt="UK inflation graph" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for GBP, while a lower-than-expected reading could act bearishly on GBP. Impact: EUR/GBP, USD/GBP, GBP/PLN <h2 id="heading-scroll3">Friday, 22.11, 8:00 CET, Germany's gross domestic product (GDP) quarterly (Q3)</h2> Germany's economy alternately grows and shrinks every quarter. From the preliminary reading, we know that Germany's GDP grew by 0.2 per cent in Q3 2024 qoq, rebounding after a contraction of 0.3 per cent in Q2. Growth in government and household spending is responsible for the rebound. On an annualised basis, GDP fell by 0.2 per cent, marking the sixth consecutive quarter without growth. The government forecasts a continuation of the 0.2 per cent contraction in GDP, in 2024, following a 0.3 per cent decline in 2023. Despite difficulties, such as high energy costs and weak external demand, a recovery is forecasted for 2025, with GDP growth of 1.1 per cent, driven by an increase in private consumption and a resumption of industrial exports. Analysts forecast Germany's GDP growth rate to remain at 0.2 per cent qoq. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Niemcy_PKB_15.11.png" alt="graph of German GDP" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR. Impact: EUR/USD, EUR/PLN Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comFri, 15 Nov 2024 14:18:00 +0100Almost all “super-investors”, including Warren Buffett, Bill Gates and Michael Burry, have released 13F reports outlining changes to their portfolios for Q3 2024. Despite the bull market, “super-investors” regularly sell more stocks than they buy. The l...GDP slowdown in Poland - forecasts for PLN and WIGhttps://invest.conotoxia.com/investment-research/comments/gdp-slowdown-in-poland-forecasts-for-pln-and-wighttps://invest.conotoxia.com/investment-research/comments/gdp-slowdown-in-poland-forecasts-for-pln-and-wigPoland's Q3 GDP growth slows to 2.7 from 3.2 per cent y/y. Forecasts called for a reading of 3 per cent y/y. The economy contracted by 0.2 per cent q/q. The CSO's preliminary reading does not include information on the structure of growth. These will not be published until the end of the month. Nevertheless, the worsening situation of the hitherto strong Polish consumer and the weakening situation of Polish exports may be behind the downturn.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Problems faced by the Polish consumer</a></li> <li><a href="#heading-scroll2">Earnings in Poland continue to rise rapidly</a></li> <li><a href="#heading-scroll3">Problems with export</a></li> <li><a href="#heading-scroll4">Forecasts for USD/PLN and EUR/PLN</a></li> <li><a href="#heading-scroll5">Forecasts for the WIG</a></li> </ol> <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_14.11.png" alt="graph of Poland's GDP" /> Source: Tradingeconomics <h2 id="heading-scroll1">Problems faced by the Polish consumer</h2> We could see the first signs of the breathlessness of the Polish consumer indirectly through the decline in shopping centre activity. In the third quarter of 2024, the number of customers in galleries fell by 12.4 per cent compared to last year. This translated into a 3 per cent year-on-year decline in retail sales in September, although an increase of 2.1 per cent was previously forecast. Despite this, we are still at the forefront of European GDP growth.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_sprzeda%C5%BC_detaliczna_14.11.png" alt="chart Poland's retail sales" /> Source: Tradingeconomics <h2 id="heading-scroll2">Earnings in Poland continue to rise rapidly</h2> We are still able to maintain growth to a large extent through consumption supported by loose fiscal policy, but above all the good health of the labour market, which, after the fall in inflation, resulted in a temporary increase in real wage growth to double-digit figures. The extreme favourable situation for household budgets could not last for long, but in the coming quarters, unlike most of 2023, wages would grow at a rate of around 10 per cent, which is definitely faster than prices - the last CPI inflation reading was 5 per cent - and this is a result of the fact that the economy would continue to grow. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_wynagrodzenia_14.11.png" alt="wage chart" /> Source: Tradingeconomics <h2 id="heading-scroll3">Problems with export</h2> For the whole of 2024, in an unfavourable external environment, the Polish economy may grow by around 3 per cent year-on-year. Under current conditions, this would be a good result, but the most optimistic forecasts of a few months ago will clearly not materialise. In the next year, the situation of Polish GDP will largely depend on the economic situation in Western Europe. Its improvement could change the situation of the balance of payments, which started to be strongly negative in the third quarter of this year. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_bilans_p%C5%82atniczy_14.11.png" alt="Current Account graph" /> Source: Tradingeconomics <h2 id="heading-scroll4">Forecasts for USD/PLN and EUR/PLN</h2> The MPC's stance underpins the zloty's attractiveness and contrasts sharply with the global wave of monetary easing, which was also joined in September by the US Federal Reserve, which has already cut interest rates twice.  The zloty remains stable against the euro, with the EUR/PLN exchange rate oscillating around 4.35.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_EURPLN_14.11.png" alt="EURPLN chart" /> Source: Conotoxia MT5, EURPLN, Daily Following the publication of disappointing Polish GDP data, the dollar continues to strengthen, reaching its highest levels in 2024, with USD/PLN breaking through key resistance at PLN 4.12, which could trigger a further rally in the weakening of the domestic currency. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_USDPLN_14.11.png" alt="USDPLN chart" /> Source: Conotoxia MT5, USDPLN, Daily It is worth remembering that the USD/PLN exchange rate is largely dependent on the EUR/USD relationship, with a high correlation of the two pairs at as high as 0.81! The latest US CPI inflation data, which rose to 2.6 per cent in October from 2.4 per cent, supported the US dollar, pushing EUR/USD below 1.06, its lowest value since the spring. This also reached a key support level at 1.05. Investors anticipate that Donald Trump's victory could contribute to economic growth and higher inflation in the US as a result of the tariff policy, supporting the short-term strengthening of the dollar. Nevertheless, Invest.Cinkciarz analysts view these market expectations as overstated and forecast that the dollar will weaken in 2025, which would allow the zloty to recover some of its losses and the USD/PLN exchange rate could fall towards 4.0.The EUR/USD exchange rate is likely to return to the  <h2 id="heading-scroll5">Forecasts for the WIG</h2> The broad WIG index has been on a downward trend for the past six months, losing 11 per cent from its peaks, after earlier spectacular gains in 2023, when it gained as much as 40 per cent. Recall that the stock market often anticipates future economic events, which is why falls on indices often precede crises. However, the current decline can hardly be seen as a harbinger of economic collapse. Rather, investors seem to be pricing in a slower pace of economic growth, as confirmed by the latest GDP reading. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_WIG_14.11.png" alt="WIG chart" /> Source: Tradingview The thawing of food and energy prices has brought inflation back to Poland, which is already being felt by consumers, who are cutting back on spending and visiting shopping centres less frequently. As a result, sectors dependent on individual consumption, such as the automotive, media and retail sectors, may be facing challenges. However, Invest.Cinkciarz analysts emphasise that Poland is still among the top European countries in terms of growth rates and, with valuations at extremely low levels, they remain optimistic about the future of the price of Polish equities; the WIG index may even break through its historical highs in the first half of next year.   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comThu, 14 Nov 2024 14:10:00 +0100Poland's Q3 GDP growth slows to 2.7 from 3.2 per cent y/y. Forecasts called for a reading of 3 per cent y/y. The economy contracted by 0.2 per cent q/q. The CSO's preliminary reading does not include information on the structure of growth. These will no...The price of uranium has shot up by 200 per cent! Could uranium be the investment of the decade?https://invest.conotoxia.com/investment-research/comments/the-price-of-uranium-has-shot-up-by-200-per-cent-could-uranium-be-the-investment-of-the-decadehttps://invest.conotoxia.com/investment-research/comments/the-price-of-uranium-has-shot-up-by-200-per-cent-could-uranium-be-the-investment-of-the-decadeOver the past five years, the price of uranium has risen by 208 per cent, although it has seen a 27 per cent correction from recent peaks since the beginning of this year. Over the same period, the Global X Uranium ETF has gained 177 per cent. The rise in uranium prices has been driven by two main factors: declining production and plans to increase consumption of the commodity in developed countries.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">The future of the uranium market</a></li> <li><a href="#heading-scroll2">What is driving the uranium price up?</a></li> <li><a href="#heading-scroll3">The nuclear market has stagnated for 20 years!</a></li> <li><a href="#heading-scroll4">The average age of power plants has exceeded 30 years!</a></li> <li><a href="#heading-scroll5">Long-term projections of uranium price developments</a></li> </ol> <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_global_X_13.11.png" alt="Global X Uranium ETF chart" /> Source: Tradingview <h2 id="heading-scroll1">The future of the uranium market</h2> A World Nuclear Association report indicates that uranium demand will increase in the coming years due to plans to develop nuclear power as a low-carbon source. At the recent COP28 conference in Dubai, 25 countries announced their intention to triple global nuclear capacity by 2050. Implementing these plans could significantly increase demand for uranium both to supply new reactors and to extend the life of existing units. The largest increase in demand is expected in Asia, particularly in China and India, where 26 and eight new reactors are under construction respectively. In addition, US technology giants such as Alphabet, Meta, Amazon and Microsoft have announced investments in nuclear power and co-funding the construction of small modular reactors (SMRs) to secure the energy needs of data centres supporting the development of artificial intelligence. However, the pledged contribution of large technology companies is still small in relation to global demand. Uranium demand is estimated to increase by 27 per cent by 2030 and by 38 per cent in the next decade. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_cena_uranu_13.11.png" alt="graph uranium price" /> Source: Tradingeconomics <h2 id="heading-scroll2">What is driving the uranium price up?</h2> However, the main factor driving uranium prices up is the continued decline in uranium production. About two-thirds of global uranium production comes from Kazakhstan, Canada and Australia, with Kazakhstan accounting for about 45 per cent, Canada for 15 per cent and Namibia for 11 per cent of global production. Between 2018 and 2022, uranium production declined by 8.8 per cent, with the result that current production meets only about 70 per cent of global demand, with the remainder supplied by recycling and existing reserves. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_wydobycie_uranu_13.11.png" alt="graph uranium mining" /> Source: World Nuclear Association <h2 id="heading-scroll3">The nuclear market has stagnated for 20 years!</h2> Although uranium prices fluctuate, demand for this raw material has remained stable over the past two decades. The demand outlook depends mainly on the number of operating reactors and their capacity, which has remained stable since the Fukushima disaster in 2011. The United States currently has the largest number of reactors (94), followed by France and China (56 reactors each). <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_energia_atomowa_13.11.png" alt="graph nuclear energy production" /> Source: World Nuclear Association <h2 id="heading-scroll4">The average age of power plants has exceeded 30 years!</h2> However, it is worth noting that many Western reactors are ageing and may be decommissioned in the coming years, potentially negatively impacting uranium demand. Current projections suggest that the number of new reactors will almost offset the number of units scheduled for shutdown. However, new reactors are much more efficient, which affects uranium demand. The average age of an operating reactor is now over 30 years, with some of the oldest reactors being over 50 years old. These older units are much less efficient than the newer reactors being built mainly in China and India. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_wiek_elektrowni_13.11.png" alt="graph age of nuclear power plant" /> Source: World Nuclear Association <h2 id="heading-scroll5">Long-term projections of uranium price developments</h2> Analysts at Invest.Conotoxia.com highlight that the growing demand for nuclear energy in Asian countries and ongoing uranium supply shortages support long-term price increases for this resource and positively impact the fundamentals of uranium mining companies. As a result, further price increases for uranium appear highly likely. Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comWed, 13 Nov 2024 13:20:00 +0100Over the past five years, the price of uranium has risen by 208 per cent, although it has seen a 27 per cent correction from recent peaks since the beginning of this year. Over the same period, the Global X Uranium ETF has gained 177 per cent. The rise ...Next week to watch (11-15.11.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-11-15-11-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-11-15-11-2024Following the US election, financial markets reacted sharply: the USD/PLN exchange rate even rose to 4.09 and bitcoin reached a record high of USD 76 000. The S&P 500 index approached 6,000 points and Tesla shares gained 18 per cent since the election. At the same time, gold fell by 1 per cent, slipping below US$2,700 per ounce. What lies ahead in the coming months after Donald Trump's victory? In the cryptocurrency market, the dominance of bets on the rise of bitcoin is increasing. These are backed by ETFs, which have accumulated bitcoin worth more than US$22 billion. Currently, ETFs hold 3.3 per cent of bitcoin's total supply, and investors expect the price to rise above USD 80 000. In the Invext.Conotoxia analysts' base case scenario, we also expect the price to rise and the year could end at record levels for the most popular cryptocurrency. Gold may continue to cheapen, as historically its price has fallen 77 per cent of the time in an election quarter. In the base case scenario, Invext.Conotoxia analysts estimated that the election could be a turning point where the gold price starts to fall. Nevertheless, the year is expected to end above $2,500 per ounce, which could provide strong support for the gold price. The dollar may be strengthening thanks to Trump's protectionist policies, although the market is waiting for possible Fed action that could moderate this trend. The election also favours growth in the stock market, which ended election quarters on a positive note 77 per cent of the time. Invext.Conotoxia analysts in the base case scenario assume that the indices.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">German consumer price index (CPI) monthly (October)</a></li> <li><a href="#heading-scroll2">US consumer price index (CPI) monthly (October)</a></li> <li><a href="#heading-scroll3">UK gross domestic product (GDP) quarterly (Q3)</a></li> <li><a href="#heading-scroll4">Japan's gross domestic product (GDP) quarterly (Q3)</a></li> </ol> <h2 id="heading-scroll1">Tuesday, 12.11, 8:00 CET, German consumer price index (CPI) monthly (October)</h2> From the preliminary reading, we know that annual inflation in Germany rose to 2 per cent in October 2024, the highest level in three months. Service and food prices in particular rose faster and commodity prices rebounded, while the fall in energy costs was smaller due to high prices a year ago. Analysts forecast a confirmation of the German CPI inflation reading of 2 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_niemiec_08.11.png" alt="German inflation graph" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR. Impact: EUR/USD, EUR/PLN <h2 id="heading-scroll2">Wednesday, 13.11, 14:30 CET, US consumer price index (CPI) monthly (October)</h2> US annual inflation slowed in September 2024 to 2.4 per cent, the lowest level since February 2021. Housing price growth slowed, energy costs fell, but natural gas prices rebounded, and food and transportation inflation accelerated. Analysts forecast, another rise in US CPI inflation to 2.6 per cent in October. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_USA_08.11.png" alt="graph US inflation" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD. Impact: EUR/USD, USD/PLN <h2 id="heading-scroll3">Thursday, 14.11, 8:00 CET, UK gross domestic product (GDP) quarterly (Q3)</h2> The UK economy grew by 0.7 per cent year-on-year in the second quarter of 2024, reaching its highest level of growth since the third quarter of 2022. Investment, household and government spending, however, increased less than expected, exports fell more sharply and imports accelerated. The UK government raised taxes by £40 billion ($52 billion), focusing on wealthy citizens, foreign residents and companies. Finance Minister Rachel Reeves, in Labour's first budget after her election victory, announced, among other things, a tax on inherited pensions, higher capital gains tax, an end to public school relief and an increase in National Insurance contributions for employers. It has also introduced £100 billion of new investment to support the future growth of the economy. Analysts forecast, a sustained 0.6 per cent year-on-year growth rate in UK GDP. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_UK_08.11.png" alt="UK GDP graph" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for GBP, while a lower-than-expected reading could act bearishly on GBP. Impact: EUR/GBP, GBP/USD, GBP/PLN, UK100 <h2 id="heading-scroll4">Friday, 15.11, 00:50 CET, Japan's gross domestic product (GDP) quarterly (Q3)</h2> On a quarterly basis, Japanese GDP grew by 0.7 per cent in the second quarter of 2024, but recorded a year-on-year decline of 1 per cent. This was the strongest quarterly growth in a year, driven by rising wages and a recovery in the automotive sector. Private consumption grew at a slightly slower pace, with business investment increasing by 0.8 per cent q-o-q. Government spending increased by 0.1 per cent q/q, while net trade fell slightly as exports grew more slowly than imports. Analysts forecast further stagnation in Japan, with quarterly GDP growth of just 0.2 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_japonii_08.11.png" alt="chart of Japan's GDP" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the JPY, while a lower-than-expected reading could act bearishly on the JPY. Impact: EUR/JPY, USD/JPY, Nikkei225   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comFri, 08 Nov 2024 13:38:00 +0100Following the US election, financial markets reacted sharply: the USD/PLN exchange rate even rose to 4.09 and bitcoin reached a record high of USD 76 000. The S&P 500 index approached 6,000 points and Tesla shares gained 18 per cent since the election. ...Cartier, Dior, Amiri is my dress code, or the situation in the luxury goods markethttps://invest.conotoxia.com/investment-research/comments/cartier-dior-amiri-is-my-dress-code-or-the-situation-in-the-luxury-goods-markethttps://invest.conotoxia.com/investment-research/comments/cartier-dior-amiri-is-my-dress-code-or-the-situation-in-the-luxury-goods-marketOver the past five years, global luxury goods companies have performed slightly below the market average. The S&P Global Luxury index has risen by less than 50 per cent over this period, while the main S&P 500 index has gained 85 per cent. The most robust gains among luxury companies came after the pandemic shock of 2020, when stocks in the sector gained an average of as much as 180 per cent from the bottom, peaking in November 2021. Since then, stagnation has been evident, heavily influenced by the economic situation following the outbreak of war in Ukraine. The stagnation is mainly in Europe, where many companies in the sector originate from. Demand for luxury goods is also slowing down in China, which is an increasingly important market for this segment. The sales performance of luxury companies is therefore strongly linked to the global economic situation, particularly in developed countries, which should be taken into account when analysing their potential.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Investment success does not come from buying the good stuff....</a></li> <li><a href="#heading-scroll2">High-quality homeware from Williams-Sonoma</a></li> <li><a href="#heading-scroll3">Coach, Kate Spade, or Stuart Weitzman from Tapestry</a></li> <li><a href="#heading-scroll4">Jewellery Kay, Zales and Jared from Signet Jewelers</a></li> <li><a href="#heading-scroll5">Tough situation on Christian Dior's stock price</a></li> </ol> <h2 id="heading-scroll1">Investment success does not come from buying the good stuff....</h2> Before making an investment decision, it is worth remembering the words of the famous investor Howard Marks: ‘Investment success does not come from buying good things, but from buying them at a favourable price.’ A similar approach is taken by New York University professor Aswath Damodaran, who emphasises: ‘Keep your eyes on the price.’ Hence, the selection of companies for an investment portfolio should not be based solely on liking their products; the main factor should be the price we pay for the company's future earnings. To assess whether an entity is undervalued or overvalued, valuation ratios such as the Price to Earnings (P/E) ratio can be used. For the S&P Global Luxury index, this is 18, while for the S&P 500 index it is as high as 29, meaning that companies in the luxury sector are relatively cheaper. However, this ratio does not take into account expected earnings growth, which may be higher for the S&P 500 due to its strong exposure to technology developments, including artificial intelligence. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_luxury_index_05.11.png" alt="wykres luxury index vs SPX" /> Source: TradingView It is therefore worth looking at the comparative advantages of individual companies, which may arise from brand recognition, the efficiency of production processes or the possession of unique patents. For this purpose, the return on invested capital (ROIC) ratio, which should exceed the cost of capital, can be helpful. In this way, the company generates additional value for stakeholders. A high ROIC, usually above 15 percent, indicates solid growth potential. <h2 id="heading-scroll2">High-quality homeware from Williams-Sonoma</h2> A company that fits these criteria perfectly is the US-based Williams-Sonoma Inc. which retails luxury home goods such as kitchen equipment, furniture and home décor. It operates under well-known brands such as Pottery Barn and West Elm. The company's shares are trading with a P/E ratio of 15.9, which is below the market average, and the company has a very high and growing ROIC of 30.7 percent. Its competitive advantage is operational efficiency, with high operating margins of 18.4 percent at the same time. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_willSonoma_05.11.png" alt="wykres Williams Sonoma" /> Source: Conotoxia MT5, WillSonoma, Daily <h2 id="heading-scroll3">Coach, Kate Spade, or Stuart Weitzman from Tapestry</h2> Another example from the luxury sector is Tapestry Inc, a US fashion company that owns brands such as Coach, Kate Spade and Stuart Weitzman, specialising in luxury handbags, clothing and accessories. Tapestry shares trade with a P/E ratio of 14 and a ROIC of 18.9 percent. Like Williams-Sonoma, Tapestry achieves a competitive advantage through efficient production, which is reflected in a relatively high operating margin of 18.8 percent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_tampestr_05.11.png" alt="Tapestry chart" /> Source: Conotoxia MT5, Tapestry, Daily <h2 id="heading-scroll4">Jewellery Kay, Zales and Jared from Signet Jewelers</h2> Also of interest is Signet Jewelers Ltd., the world's largest jewelry retailer, operating shops under the Kay, Zales and Jared brands, offering a wide range of jewelry and watches. The company's P/E ratio is only 9.2, with an ROIC of 18.3 percent. Despite a relatively low operating margin of 7.9 percent, the company achieves a competitive advantage through economies of scale. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_sygnetJeweler_05.11.png" alt="SignetJewelers chart" /> Source: Conotoxia MT5, SignetJewelers, Daily <h2 id="heading-scroll5">Tough situation on Christian Dior's stock price</h2> An example of a company achieving a comparative advantage through high margins is Christian Dior SE, a French company specialising in luxury goods, particularly in the areas of fashion, cosmetics and perfumes. Dior owns a renowned brand known for its haute couture collections, clothing, leather handbags, footwear and jewelry. The price-to-earnings ratio for the company is 17.8, which is close to the market average, but the high operating margin of 25.4 percent allows the company to achieve a ROIC of 13.5 percent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Dior_05.11.png" alt="Dior chart" /> Source: Conotoxia MT5, Dior, Daily   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comTue, 05 Nov 2024 15:39:00 +0100Over the past five years, global luxury goods companies have performed slightly below the market average. The S&P Global Luxury index has risen by less than 50 per cent over this period, while the main S&P 500 index has gained 85 per cent. The most robu...Today is the Day…https://invest.conotoxia.com/investment-research/research-articles/today-is-the-dayhttps://invest.conotoxia.com/investment-research/research-articles/today-is-the-dayPossibly the most important event of the year has finally approached. The US presidential election and, more importantly – its result – holds power to affect a broad range of variables worldwide. Starting from social security of less protected groups of Americans and ending with major geopolitical events, including war escalation. Somewhere in the middle of this spectrum, the stock market and other financial instruments may also be strongly affected by the political party in power and the main person leading the United States. <h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">The power to affect the stock market</a></li> <li><a href="#heading-scroll2">Democratic administration: sector beneficiaries</a></li> <li><a href="#heading-scroll3">Republican administration: sector beneficiaries</a></li> <li><a href="#heading-scroll4">Which administration may be “better” for the stock market?</a></li> <li><a href="#heading-scroll5">Other considerations – budget deficit</a></li> </ol> <h2 id="heading-scroll1">The power to affect the stock market</h2> The presidential administration tends to influence market sectors in distinctive ways, depending on the policies and priorities of each political party. While not every administration follows the same pattern, historical data shows trends where certain sectors perform better depending on whether a Democrat or a Republican occupies the White House. Factors such as tax policies, government spending, environmental regulations, and approaches to foreign policy play a critical role in shaping which sectors may benefit. As investors cope with the uncertainty, stock markets often see increased volatility in the period leading up to the presidential elections. As both presidential candidates – Donald Trump and Kamala Harris – are fighting “neck-to-neck” and there is no one distinct favorite, investors are holding back with any rush investment decisions. This may indicate that once the outcome of the election is clear, investors might take sharp movements in one or another direction.  While the stock market generally reacts to many political, economic, social, and even “black swan” events, history shows us that each administration has their own priorities. Acting in favor of these priorities, the White House has the power to affect various stock market sectors.  <h2 id="heading-scroll2">Democratic administration: sector beneficiaries</h2> When Democrats take office, they often focus on social programs, healthcare reforms, environmental protections, and labor rights. Historically, Democratic policies emphasize regulation and increased government spending in areas like healthcare, infrastructure, and green energy, as well as initiatives to reduce income inequality. For example, the Biden administration focused on reducing carbon emissions and rejoining the Paris Climate Agreement. While the Obama administration’s Affordable Care Act positively affected healthcare providers and insurance companies. Democrats are more inclined to fund public health initiatives and support medical research that develops new treatments and diagnostics.  Furthermore, Democratic administrations often promote infrastructure spending, which includes rebuilding roads, bridges, public transit, and broadband expansion. Companies in the construction, engineering, and materials industries may benefit from increased government contracts and funding, leading to higher stock performance. Democrats are also often seen as supporters of innovation and are more likely to favor policies that support emerging technologies in clean energy, artificial intelligence, and digital infrastructure. These policies can create favorable conditions for tech companies, especially those focused on advancing digital connectivity and supporting environmental goals. <h2 id="heading-scroll3">Republican administration: sector beneficiaries</h2> Meanwhile, Republican administrations historically have shown different interests prioritizing a more business-friendly approach by advocating for lower taxes, fewer regulations, and policies favoring free-market capitalism. Republican administrations are known to support the oil and gas industries, preferring policies that reduce regulations on fossil fuels and open federal lands for energy development, which positively impacts stock performance in these sectors. Furthermore, Republican presidents frequently advocate for strengthening the US defense capabilities, benefiting defense contractors and aerospace companies.  Republican administrations also traditionally support policies that ease financial regulations, which can lead to a favorable environment for banking and financial services. This may lead banks to enjoy more flexibility in lending practices, mergers, and other financial services, thus boosting profitability and stock prices in the financial sector. Similarly, in the past, Republicans have implemented deregulation and tax policies favorable to manufacturing and industrial companies. By cutting corporate taxes and reducing environmental restrictions, Republicans have created conditions that help manufacturing companies reduce operational costs and increase profitability, bolstering their stock performance. As an example of the above findings, we may look at some of the acts by Donald Trump during his first presidency. As there is no reason to believe that the Republican presidential candidate has changed his priorities since his first presidency, these accomplishments may give us a quality insight into how his second presidency might look like. The Trump administration worked on rolling back imposed regulations on banks following the 2008 financial crisis, reducing regulatory scrutiny for them. While on the subject of undoing some of the work done by previous administrations, Donald Trump also vowed to repeal Obama’s Affordable Care Act and announced the withdrawal from the Paris Climate Agreement (only for Biden to rejoin later on). The previous Trump administration also focused heavily on military funding, which saw companies like Lockheed Martin, Northrop Grumman, and Raytheon experience growth in stock performance. <h2 id="heading-scroll4">Which administration may be “better” for the stock market?</h2> While at first glance, it may seem that the stock market should benefit more from the Republican administration, a report by Lubos Pastor and Pietro Veronesi from the University of Chicago shows that during the last century, the US economy and stock market actually performed better during Democratic administrations. The researchers found that between 1927 and 2015, the US GDP grew by 4.86% under the Democratic presidencies and only 1.7% under the Republican presidencies. In the same period, the US stock market’s equity risk premium was 10.9% higher under Democratic presidencies in comparison to Republicans. As one may suspect, the stock market also managed to generate massive gains during Joe Biden’s presidency. The S&P500 index has gained roughly 50% since January 2021, when Joe Biden became the US president (the second-best performance after the dotcom bubble during fellow Democrat Bill Clinton’s presidency). One of the reasons that might explain the above tendency is that in the past, Republican representatives in the White House have favored more active shifts in the nation’s policies regarding domestic economic developments, as well as foreign relations. Such shifts may cause considerable volatility in the markets as investors face uncertainty about the future. If Ms. Kamala Harris continues the Democratic administration in the White House, fewer changes in foreign and domestic policies might lead to lower volatility in the stock market.  <h2 id="heading-scroll5">Other considerations – budget deficit</h2> While the above-discussed division of sectors benefiting from the US administrations may provide valuable information, investors should keep in mind that other variables – such as economic cycles, global events, and evolving technologies – also play a crucial role in shaping stock performance. Thus, while historical trends offer guidance, a balanced approach that considers the current economic and geopolitical context is essential for understanding sector performance across different administrations.  One such variable worth mentioning is the US budget deficit. While Republicans often worry about the large public debt and even call themselves “more fiscally responsible than Democrats”, history shows that may not be entirely true. For example, during his first presidency, Donald Trump promised to reduce the US national debt. Instead, the US national debt grew by 7.2 trillion US Dollars in four years while Mr. Trump was in the White House – around 30% of the total national debt at the time. A similar tendency is seen when looking at budget deficit and surplus during the Democratic administrations (Clinton and Obama) and the Republican administrations (Bush and Trump) in the graph below.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_deficyt_USA_05.11.png" alt="US Budget Deficit" /> Source: <a href="https://www.democrats.senate.gov/">https://www.democrats.senate.gov/</a> National debt is a crucial but uncomfortable part of the US economy, which both presidential candidates have tried to avoid during their campaigns. Regardless of who the next US president will be, he or she will have to deal with the ongoing national debt crisis. But judging from the past, one candidate is more likely to reduce the US budget deficit in the next four years, while the other one – increase it. As the national debt increases, it poses a risk to the country’s economic stability and hence – the stock market.  Very soon, we will know who will lead the US for the next four years and conclude which sectors may benefit from the upcoming policy changes. However, while causing short-term market volatility, US presidential elections may have minimal long-term impact. More importantly, a well-balanced portfolio with adequate risk limitations may benefit the most in the long term, regardless of the changes in the White House.    Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Invest.conotoxia.com investment service) Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comTue, 05 Nov 2024 11:51:00 +0100Possibly the most important event of the year has finally approached. The US presidential election and, more importantly – its result – holds power to affect a broad range of variables worldwide. Starting from social security of less protected groups of...Next week to watch (4-8.11.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-4-8-11-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-4-8-11-2024Investors have invested more than $4 billion in bitcoin's rise to $100k after the election. After rebounding from USD 53,000, the price of the most popular cryptocurrency has risen by more than 30 percent, approaching historic highs, with bets on a rise above USD 80,000 dominating the options market. At the same time, the price of gold has rebounded from USD 2800 per ounce. Historically, gold has lost value 77 percent of the time post-election, while the stock market has gained an average of 4.5 percent in an election quarter. We expect a correction in the gold market in the coming weeks, but our base case scenario assumes that bullion will end the year above $2,500 per ounce. Invest.Conotoxia.com analysts predict that the stock market could continue its upward movement, regardless of the election outcome. In the case of the dollar, there is no strong correlation with the election, so the decision at Thursday's FOMC meeting will be key. Invest.Conotoxia.com analysts' forecasts point to a drop in EUR/PLN below PLN 4.30 and USD/PLN to around PLN 3.90 in the coming months, with the possibility of further strengthening of the Polish zloty against the dollar in mid-2025. The Bank of England will also make a decision on interest rate cuts in the coming week.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">US presidential election</a></li> <li><a href="#heading-scroll2">UK interest rate decision</a></li> <li><a href="#heading-scroll3">US interest rate decision</a></li> </ol> <h2 id="heading-scroll1">Tuesday, 5.11, US presidential election</h2> In the final days before the election, the so-called Road to 270, the battle to win 270 electoral votes, is underway. So far, around a third of the electorate has voted in the early elections. The attention of the majority, however, is focused on the swing states, the so-called swing states, where the Republican candidate has achieved a slight lead in the latest polls. According to statistical analyses, Donald Trump wins 52 times out of 100 compared to Kamala Harris' 48 wins. Bookmakers already seem to have largely predicted the favourite, estimating that the Republican has as much as a 63.1 percent chance of winning, but we still have to wait for that outcome. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_wybory_USA_31.10.png" alt="chart US elections" /> Source: RealClearPolitics Impact: EUR/USD, USD/PLN, US500 <h2 id="heading-scroll2">Thursday 7.11, 13:00 CET, UK interest rate decision</h2> The Bank of England kept interest rates at 5 percent in September 2024, in line with market expectations. However, there were the first dovish signals as one committee member voted in favour of cutting rates to 4.75 percent. UK inflation was 2.2 per cent in August and the Bank of England expects it to rise to 2.5 percent by the end of the year. The committee also announced a £100 billion sale of government bonds, which could support the strengthening of sterling. Analysts forecast that the Bank of England will decide to cut the interest rate to 4.75 percent at its next meeting. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_UK_31.10.png" alt="UK interest rate graph" /> Source: Tradingeconomics.com A higher-than-expected interest rate could be bullish for GBP, while a lower-than-expected rate could act bearishly on GBP. Impact: EUR/GBP, GBP/USD <h2 id="heading-scroll3">Thursday, 7.11, 19:00 CET, US interest rate decision</h2> Federal Reserve officials cut interest rates by 0.5 percentage points in September 2024 to an upper level of 5 percent to balance inflationary pressures with concerns about the labour market. Currently, according to the FedWatch tool, the market is pricing in as much as a 96 percent probability of another 25 bp interest rate cut. This means that the current pace of cuts would be slower than earlier expectations. Analysts' consensus is for the main interest rate to fall to 4.75 percent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_USA_31.10.png" alt="US interest rate graph" /> Source: Tradingeconomics.com A higher-than-expected interest rate could be bullish for the USD, while a lower-than-expected rate could act bearishly on the USD. Impact: EUR/USD, USD/PLN Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comThu, 31 Oct 2024 13:51:00 +0100Investors have invested more than $4 billion in bitcoin's rise to $100k after the election. After rebounding from USD 53,000, the price of the most popular cryptocurrency has risen by more than 30 percent, approaching historic highs, with bets on a rise...Investors have placed a bet of more than $4bn that bitcoin will break through the $100,000 level after the election.https://invest.conotoxia.com/investment-research/comments/investors-have-placed-a-bet-of-more-than-4bn-that-bitcoin-will-break-through-the-100-000-level-after-the-electionhttps://invest.conotoxia.com/investment-research/comments/investors-have-placed-a-bet-of-more-than-4bn-that-bitcoin-will-break-through-the-100-000-level-after-the-electionThe price of bitcoin, after rebounding from the $53,000 level almost two months ago, has scored a more than 30 percent rally, thus approaching its ATH. The rise in the cryptocurrency market has largely coincided with the start of the US presidential campaign, with less than a week to go. So let's take a look at how the upcoming election may affect the cryptocurrency market.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Huge bets on bitcoin</a></li> <li><a href="#heading-scroll2">The state of the cryptocurrency market</a></li> <li><a href="#heading-scroll3">How did bitcoin behave during the recent election?</a></li> <li><a href="#heading-scroll4">What bitcoin prices can we expect?</a></li> </ol> <h2 id="heading-scroll1">Huge bets on bitcoin price increases above $80k and $100k!</h2> The options market is very specific in that it allows investors to set precise expectations about future asset prices. An option is a kind of bet that an instrument will rise or fall above or below a certain level within a set period of time. Currently, the largest number of bets in the market are on options to increase (call) the price of bitcoin above USD 80,000 or even USD 100,000 by the end of December this year. The number of call options is double the number of put options, suggesting that investors and hedge funds are betting heavily on the price of the cryptocurrency rising after the election, probably regardless of the outcome. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_opcje_Call_29.10.png" alt="Call option chart for bitcoin" /> Source: Coinglas <h2 id="heading-scroll2">The state of the cryptocurrency market</h2> It is always important to keep a significant distance when analysing the cryptocurrency market. Of course, it is possible to forecast that the price of bitcoin will exceed a certain level in a week's time, but let's focus on hard data from the market to avoid wishful thinking. Let's start with the question of whether there are still investors ready to bring new funds into this market, or whether all interested parties have already managed to buy in. We can indirectly assess this by analysing the capitalisation of stablecoins, which act as a quantity of money in this market. From this perspective, we have seen a continuous inflow of new capital for the last 12 months, although we are still below 2022 levels. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stablecoiny_29.10.png" alt="chart stablecoin capitalisation" /> Source: Defilama The introduction of ETFs earlier this year had a major impact on the bitcoin market. Since their debut, these funds have acquired more than $22 billion worth of bitcoin, a trend that has clearly accelerated in recent days. Currently, the funds already hold more than 3.3 percent of all bitcoin. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_BTC_ETF_29.10.png" alt="chart of capital inflows from ETFs" /> Source: Farside <h2 id="heading-scroll3">How did bitcoin behave during the recent election?</h2> In his election campaign, Donald Trump explicitly advocated the development and deregulation of the cryptocurrency market, which, in the event of his victory, could provide an additional boost to the price. However, let's take a look at how bitcoin has behaved during previous elections. The history of bitcoin is not a long one, but analysing the last two election campaigns - 2016 and 2020 - we see that in both cases bitcoin did very well. In the 2016 election (Trump vs. Clinton), bitcoin gained 15.1 percent a month before the vote and another 8.4 percent a month after the election. The situation was similar in the 2020 election (Trump vs. Biden), when bitcoin rose by as much as 30.7 per cent the month before the election and another 35 per cent the month after. We seem to be following a similar path now, but we must treat these data with caution, as the sample is far too small. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_cena_BTC_wybory_29.10.png" alt="chart bitcoin price during the election" /> Source: Conotoxia own analysis <h2 id="heading-scroll4">What bitcoin prices can we expect?</h2> As we have already mentioned, forecasting in the cryptocurrency market is extremely difficult due to its speculative nature and the intrinsic value of cryptocurrencies, which is difficult to determine. However, based on hard data, such as the dynamic inflow of new capital into the market, analysts at Invest.Cinkciarz.pl estimate that the probability of reaching new historical highs (ATH) by the end of the year is increasing, regardless of the outcome of the election. Donald Trump's win, however, could further strengthen investor optimism.   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comTue, 29 Oct 2024 15:03:00 +0100The price of bitcoin, after rebounding from the $53,000 level almost two months ago, has scored a more than 30 percent rally, thus approaching its ATH. The rise in the cryptocurrency market has largely coincided with the start of the US presidential cam...Next week to watch (28.10-1.11.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-28-10-1-11-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-28-10-1-11-2024With 10 days left until the US presidential election, volatility in financial markets is likely to increase. Polls in the major states, or ‘swing states’, are deadlocked. The exceptions are Arizona and Georgia, where Donald Trump has a slight lead, within the statistical error. Bookmakers estimate his chances of winning at 60 per cent. Historically, the dollar's behaviour during election months has been mixed, with average gains of 1 percent. Forecasts indicate that this year could be a particularly weak year for the dollar, especially in the context of possible interest rate cuts by the Fed. There is a noticeable correlation between gold prices and election periods; gold typically loses value 77 per cent of the time during these quarters. Analysts predict that the price of gold could rise until the election, but then it could start to fall, ending the year above $2,500 per ounce.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">German gross domestic product (GDP) quarterly (Q3)</a></li> <li><a href="#heading-scroll2">US gross domestic product (GDP) quarterly (Q3)</a></li> <li><a href="#heading-scroll3">US monthly unemployment rate (October)</a></li> </ol> <h2 id="heading-scroll1">Wednesday, 30.10, 11:00 CET, German gross domestic product (GDP) quarterly (Q3)</h2> The German economy contracted by 0.1 per cent quarter-on-quarter in Q2 2024, according to preliminary estimates, following growth of 0.2 per cent in Q1. Private consumption fell by 0.2 per cent and business capital expenditure declined. Net trade lowered growth by 0.1 percentage points, with exports falling and imports stagnating. Government spending, on the other hand, increased by 1.0 per cent, reversing an earlier decline of 0.1 per cent. On an annual basis, the economy was unchanged, following a 0.1 per cent decline in Q1. Analysts' consensus is for another quarter-on-quarter decline in GDP of 0.1 per cent. Which would again signal a move into a technical recession. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_Niemcy_25.10.png" alt="GDP chart Germany" /> Source: Tradingeconomics A higher than expected reading could be bullish for the EUR, while a lower reading could act bearishly on the EUR. Impact: EUR/USD, EUR/PLN <h2 id="heading-scroll2">Wednesday, 30.10, 14:30 CET, US gross domestic product (GDP) quarterly (Q3)</h2> The US economy grew at an annual rate of 3 per cent in Q2 2024, in line with the previous estimate and higher than the 1.6 per cent growth in Q1. Federal spending and imports increased, while consumer spending, fixed asset investment and exports declined slightly.  Analysts forecast GDP growth of 3 per cent per annum again in the third quarter of this year. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_USA_25.10.png" alt="graph of US GDP" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD. Impact: EUR/USD, USD/PLN <h2 id="heading-scroll3">Friday, 1.11, 14:30 CET, US monthly unemployment rate (October)</h2> In September 2024, the US unemployment rate fell from 4.2 per cent to 4.1 per cent, surprising the market, which had expected a deterioration in the labour market. The number of unemployed decreased by 281,000 and employment increased by 430,000, with the labour force participation rate stable at 62.7 per cent. Analysts' consensus is for the unemployment rate to remain at 4.1 per cent in October this year. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_bezrobocie_USA_25.10.png" alt="graph US unemployment" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD. Impact: EUR/USD, USD/PLN   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comFri, 25 Oct 2024 16:04:00 +0200With 10 days left until the US presidential election, volatility in financial markets is likely to increase. Polls in the major states, or ‘swing states’, are deadlocked. The exceptions are Arizona and Georgia, where Donald Trump has a slight lead, with...Argentina's ‘Balcerowicz plan’ from Javier Mileihttps://invest.conotoxia.com/investment-research/comments/argentina-s-balcerowicz-plan-from-javier-mileihttps://invest.conotoxia.com/investment-research/comments/argentina-s-balcerowicz-plan-from-javier-mileiIt has been almost a year since Javier Milei, the controversial economist, won the presidential election in Argentina, which has been struggling with serious economic problems for years. Let's take a look at what the effects of Milei's actions are in numbers and what forecasts the world is making for Argentina.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Javier Milei - what is worth knowing about him?</a></li> <li><a href="#heading-scroll2">What does the market think of Argentina?</a></li> <li><a href="#heading-scroll3">Argentina's economy. Light at the end of the tunnel is visible</a></li> <li><a href="#heading-scroll4">What does the IMF see as the future of Argentina's economy?</a></li> </ol> <h2 id="heading-scroll1">Javier Milei - what is worth knowing about him?</h2> Born in 1970 in Buenos Aires, the Argentine president worked as an economist before taking office. He became known as a television commentator, harshly criticising government policies. Inspired by anarcho-capitalism, he rejected state intervention in the economy. He entered politics in 2021, forming the La Libertad Avanza party, and his presidential campaign in 2023 focused on radical reforms, including abolishing the Central Bank and replacing the peso with the US dollar. His views and announcements were controversial from the start of his political activities, with Milei calling for, among other things, the privatisation of the public sector, deregulation of gun ownership and organ sales, and opposition to sex education and abortion. However, the Libertarian economist won the second round of elections in 2023, winning 56 per cent of the vote. The victory was not entirely satisfying, as his party failed to gain a majority in the Argentine parliament, causing many of the changes initiated by Miley to enter into force late or be blocked altogether. <h2 id="heading-scroll2">What does the market think of Argentina?</h2> Let us begin our analysis of the economic situation of crisis-ridden Argentina by assessing the reaction of investors to Javier Milei's rule. High inflation is drastically weakening the purchasing power of the peso, Argentina's official currency, forcing many citizens and businesses to look for alternative currencies for daily transactions. The choice falls mainly on the US dollar. This trend further exacerbates the depreciation of the peso and can lead to hyperinflation. To counter this, the government regulates the official exchange rate, which is used for international transactions but is much lower than the black market rate, the so-called blue dollar. Currently, one USD officially costs 984 pesos, while on the parallel market the ‘blue dollar’ costs around 1,200 pesos, a difference of almost 25 per cent. This disparity was not so long ago, however, much greater. After taking over, Milei weakened the currency from a rate of 365 to 800 USD/ARS, hoping that the official rate would coincide with the black market rate. However, the difference remains significant enough to discourage foreign investors who fear instability. The release of the exchange rate could be a form of shock therapy for the economy, similar to what happened in Poland in 1990, when the zloty was pegged to the US dollar at a rate of US$0.95/PLN, which only managed to be maintained for a year. In the case of Argentina, such a decision could involve the risk of deeper economic perturbations. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_USDARS_24.10.png" alt="USDARS chart" /> Source: Tradingeconomics Argentina has passed an economic reform bill, marking President Javier Milei's first major legislative achievement in his more than six months in office. The bill, known as ‘Bases’, gives the government greater control over the deregulation of the economy and includes a fiscal package introducing changes to income and wealth tax. Although the bill has passed through Congress with many changes, it still aims to encourage investment, privatise state-owned companies and simplify the tax system. The bill has also strengthened Argentina's stock market, with the value of the Global X MSCI Argentina ETFs, priced in US dollars, increasing by almost 70 per cent since the new president won. The direction of deregulation supported by tightening government spending for the crisis-ridden country appears to be an effective step. However, artificially maintaining the exchange rate could significantly block the inflow of new capital into this market. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_MSCI_Argentina_24.10.png" alt="MSCI Argentina chart" /> Source: Tradingeconomics <h2 id="heading-scroll3">Argentina's economy. Light at the end of the tunnel is visible</h2> Argentina's economic situation is grave. The country of nearly 47.1 million people is currently facing an inflation rate of 209 per cent per year and a projected fall in GDP of 3.5 per cent in 2024. This state of affairs is causing the percentage of people living in poverty (earning less than USD 3.65 per day) to rise dramatically to as much as 42.5 per cent. Despite this, however, there is light at the end of the tunnel. Percentage of urban households below the poverty line in Argentina <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopa_ub%C3%B3stwa_24.10.png" alt="chart poverty rate" /> Source: Statista Cuts in government spending not only wiped out almost the entire budget deficit, but also did not cause a significant surge in unemployment, which rose from 5.7 per cent to 7.6 per cent. Moreover, the strong weakening of the Argentine peso exchange rate supported Argentina's exports, whose dollar value increased by 20 per cent year-on-year, and this was enough for a surplus in the trade balance. We believe that such a situation should further support economic growth and have a positive impact on wages and quality of life in the long term. Unfortunately, when we take a closer look at what goes into Argentina's exports, we see that the country mainly sells agricultural and food commodities and raw materials, such as oil. This makes Argentina's exports not a key contributor to GDP and barely account for about 13 per cent of it, whereas, for example, Poland's exports account for almost 60 per cent of GDP. Therefore, Argentina mainly relies on domestic demand. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_bilans_hanlowy_24.10.png" alt="chart balance of trade" /> Source: Tradingeconomics <h2 id="heading-scroll4">What does the IMF see as the future of Argentina's economy?</h2> The International Monetary Fund (IMF) did not update its inflation forecasts for Argentina in its latest October report, predicting higher figures than the government's draft budget for 2025. The government estimates inflation of 104.4 per cent in 2024 and 18.3 per cent in 2025. Meanwhile, the IMF forecasts 140 per cent and 45 per cent respectively. The Fund also forecasts a slightly smaller decline in GDP in 2024 (-3.5 per cent) and growth of 5 per cent in 2025. However, the announcement does not suggest that inflation will fall below 10 per cent over the next six years, nor that GDP will grow at a steady rate of 3 per cent per year. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_prognozy_MFW_24.10.png" alt="IMF forecast chart" /> Source: IMF   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comThu, 24 Oct 2024 10:09:00 +0200It has been almost a year since Javier Milei, the controversial economist, won the presidential election in Argentina, which has been struggling with serious economic problems for years. Let's take a look at what the effects of Milei's actions are in nu...Gold may start to fall after the election?https://invest.conotoxia.com/investment-research/comments/gold-may-start-to-fall-after-the-electionhttps://invest.conotoxia.com/investment-research/comments/gold-may-start-to-fall-after-the-electionThe US presidential election is less than two weeks away, raising significant concerns about the future of politics in the world's largest superpower. Rising tensions favour assets considered ‘safe havens’, including gold, which has gained as much as 32 per cent since the start of the year.<h3>Table of contents:</h3> <ol> <ol> <li><a href="#heading-scroll1">Who will win the election? The road to 270</a></li> <li><a href="#heading-scroll2">How will the election affect the price of gold?</a></li> </ol> </ol> <h2 id="heading-scroll1">Who will win the election? The road to 270</h2> Without going into detail about the electoral system in the United States, the so-called swing states, i.e. the states with the most undecided voters, play a key role. It is these that are now becoming the main target of election campaigns. The ‘swing states’ include seven states: Nevada, Arizona, Wisconsin, Michigan, Pennsylvania, Georgia and North Carolina. Together, these states have 93 electoral votes (270 are needed to win) and are the most likely to determine the outcome of the election. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_swing_states_22.10.png" alt="map of the swing states" /> Source: U.S. News Based on the aggregate results of recent polls, a significant proportion of the ‘swing states’ remain deadlocked. The exceptions are Arizona and Georgia, where the latest polls indicate a slight lead for Donald Trump, although this is still within the statistical error. Despite this, bookmakers are already betting almost confidently on the victory of the Republican candidate, giving him as much as a 60 per cent chance of winning the upcoming election. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_US_elections_22.10.png" alt="graph probability of electiona" /> Source: RealClearPolling <h2 id="heading-scroll2">How will the election affect the price of gold?</h2> Analysis of historical data shows a fairly clear correlation between gold price movements and US election periods. It turns out that gold performed worst during the election quarter, losing value in 77 per cent of cases. The declines typically started just after the election, leading to an average loss of 1.8 per cent. If, on the other hand, we look at the election results, it is difficult to see any correlation or market preference towards either party's candidate. Change in the price of gold in Q4 of the election year <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_zmiana_cen_z%C5%82ota_Q4_22.10.png" alt="chart gold Q4" /> Source: Conotoxia own analysis In the base case scenario, Conotoxia’s analysts assume that the price of gold may rise until the election. However, the election itself could be a turning point, after which the bullion price could start to fall. Nonetheless, the year is expected to end above $2,500 per ounce, which could provide strong support for the gold price. Change in gold price six months before and after the election (election day = 100) <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_zmiana_cen_z%C5%82ota_22.10.png" alt="chart gold price elections" /> Source: Conotoxia own analysis   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comTue, 22 Oct 2024 14:09:00 +0200The US presidential election is less than two weeks away, raising significant concerns about the future of politics in the world's largest superpower. Rising tensions favour assets considered ‘safe havens’, including gold, which has gained as much as 32...Next week to watch (21-25.10.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-21-25-10-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-21-25-10-2024The debut of the Żabka group, which we wrote about in our previous articles, does not appear to have been successful. Although it was one of the largest debuts in recent years, it did not achieve the significant success seen with similar IPOs. The return on the day of the debut was 0 per cent and the share price is currently almost 5 per cent below the offer price. The third quarter earnings season is underway. So far, 63 per cent of companies have performed better than forecasts. Companies from the financial sector have performed particularly well. In the coming week, Alphabet , Tesla and Amazon, among others, will publish their reports. From the economic data, we will also learn about the October reading of the US manufacturing and services PMIs and the Bank of Canada's decision on a possible interest rate cut.<h3>Table of contents:</h3> <ol> <ol> <li><a href="#heading-scroll1">Canada's interest rate decision</a></li> <li><a href="#heading-scroll2">US economic leading indicators (S&P Global PMI) monthly (October)</a></li> </ol> </ol> <h2 id="heading-scroll1">Wednesday, 23.10, 15:45 CET, Canada's interest rate decision</h2> In September 2024, the Bank of Canada cut the main interest rate by 25 bps to 4.25 per cent, the third consecutive cut after 10 months of holding the rate at 5 per cent. The decision was argued on the basis of excess supply in the economy, which was putting downward pressure on inflation. The bank also pointed to a slowing labour market.  Analysts' consensus is for another 50bp cut in interest rates in Canada, to 3.75 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_Kanady_18.10.png" alt="Interest rate chart Canada" /> Source: Tradingeconomics A higher-than-expected interest rate could be bullish for CAD, while a lower-than-expected rate could act bearishly on CAD. Impact: USD/CAD, EUR/CAD <h2 id="heading-scroll2">Thursday, 24.10, 15:45 CET, US economic leading indicators (S&P Global PMI) monthly (October)</h2> In September 2024, the S&P Global US Services PMI fell to 55.2 and the Manufacturing PMI rose to 47.3, but the two sectors show different trends. The services sector continues to grow, albeit at a slightly slower pace, with strong growth in new orders, but firms are holding back on hiring due to rising costs. In the manufacturing sector, which recorded its third month of decline, production and orders fell sharply due to weakened demand and political uncertainty. Industrial employment fell at the fastest rate since 2010. Despite this, companies in both sectors raised prices and there was a slight optimism in manufacturing due to the expected recovery after the election. There is currently no established consensus on the latest PMI reading. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PMI_us%C5%82ug_18.10.png" alt="PMI Services graph" /> Source: Tradingeconomics.com <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PMI_Przemys%C5%82u_18.10.png" alt="Manufacturing PMI chart" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD. Impact: EUR/USD, USD/PLN   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comFri, 18 Oct 2024 15:45:00 +0200The debut of the Żabka group, which we wrote about in our previous articles, does not appear to have been successful. Although it was one of the largest debuts in recent years, it did not achieve the significant success seen with similar IPOs. The retur...TSMC beats market expectations. AI development is accelerating!https://invest.conotoxia.com/investment-research/comments/tsmc-beats-market-expectations-ai-development-is-acceleratinghttps://invest.conotoxia.com/investment-research/comments/tsmc-beats-market-expectations-ai-development-is-acceleratingTaiwan Semiconductor , the world's largest semiconductor manufacturer, controls 62 per cent of the Market and more than 90 per cent of production of advanced chips of 7nm and smaller. It is also a major supplier to AI giants such as Apple, Nvidia and AMD. These chips are key to modern technology, especially in the development of artificial intelligence. The company published its Q3 financial results, which exceeded the expectations of analysts and the company itself. Let's take a closer look at the conclusions of this report.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">AI development accelerates</a></li> <li><a href="#heading-scroll2">Tough situation for TSMC's competitors</a></li> </ol> <h2 id="heading-scroll1">AI development accelerates</h2> TSMC, with its strong position, reported a 39 per cent year-on-year increase in sales and a 54.2 per cent year-on-year increase in net profit. The main driver of this growth was the development of the artificial intelligence and smartphone sectors, which require more specialised chips sold at higher margins. This increased the operating profit margin to 47.8 per cent from 41.5 per cent a year earlier. The company maintains low debt levels - debt represents only 16 per cent of assets - and uses capital efficiently, achieving a 33.4 per cent return on equity (ROE). <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_TSMC_7nm_17.10.png" alt="TSMC sales graph" /> Source: TSMC quarterly report TSMC's Q3 revenue increased by 12.8 per cent q/q, driven by demand for smartphones and AI technologies, especially 3 nm and 5 nm. 3nm technologies accounted for 20 per cent of revenue, 5nm for 32 per cent and 7nm for 17 per cent. Advanced technologies (7nm and below) generated 69 per cent of revenue. Data centres (HPC) and smartphones accounted for 51 per cent and 34 per cent of revenue. Geographically, 71 per cent of revenue came from North America and 11 per cent from China. Here it is also worth mentioning that China's growth in AI technology is significantly blocked by the US. This is exemplified by the latest quarterly report from the manufacturer of lithography machines, which are essential in the ASML semiconductor manufacturing process. China has a sales share of as much as 47 per cent in this segment. However, due to US export restrictions on advanced technology, this share is set to fall to 20 per cent in 2025. This news has triggered a sell-off in the Dutch manufacturer's shares, which have already fallen by 38 per cent from their peaks. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_ASML_17.10.png" alt="ASML chart" /> Source: Conotoxia MT5, ASML-NL, Daily <h2 id="heading-scroll2">Tough situation for TSMC's competitors</h2> At present, TSMC appears to be unrivalled in the production of the most advanced chips (7 nm and below). So far, concerns about increasing competition have mainly come from China and Intel. However, China's technology constraints and Intel's severe financial problems mean that TSMC remains even more dominant, giving it a technological edge over its competitors for the next 5 years or so. For this reason, TSMC shares are up almost 10 per cent in pre-market trading. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_TSMC_17.10.png" alt="TSMC chart" /> Source: Tradingview   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comThu, 17 Oct 2024 15:16:00 +0200Taiwan Semiconductor (TSMC), the world's largest semiconductor manufacturer, controls 62 per cent of the Market and more than 90 per cent of production of advanced chips of 7nm and smaller. It is also a major supplier to AI giants such as Apple, Nvidia ...Will the escalation of the Middle East conflict change OPEC's forecasts? https://invest.conotoxia.com/investment-research/comments/will-the-escalation-of-the-middle-east-conflict-change-opec-s-forecastshttps://invest.conotoxia.com/investment-research/comments/will-the-escalation-of-the-middle-east-conflict-change-opec-s-forecastsOPEC in its latest report maintains its oil demand and supply projections for 2025. The current escalation of the conflict in the Middle East does not seem to have affected the cartel's projections, which continue to point to shortages in the crude market. OPEC has also not changed its expectations of an economic slowdown in China, despite the announcement of significant government support there.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">OPEC raport </a></li> <li><a href="#heading-scroll2">Current oil market situation</a></li> <li><a href="#heading-scroll3">Oil price development forecasts</a></li> </ol> <h2 id="heading-scroll1">OPEC raport </h2> OPEC forecasts global oil shortages, predicting a 1.6 per cent increase in crude consumption in 2025, while production is expected to grow by only 1.2 per cent. Shortages could reach as much as 2.5 per cent of total consumption. In such a scenario, they would be nearly 2 times higher than during the post-pandemic recovery. India is expected to lead consumption growth. However, OPEC's projections may not fully reflect current economic data. In the wake of the Iranian missile attack on Israel, the price of oil has risen by more than 10 per cent. At the last OPEC+ (OPEC plus Russia) meeting, the decision was taken to maintain production restrictions. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_nadprodukcja_ropy_ENG_15.10.png" alt="graph of oil overproduction" /> Source: Conotoxia own study, OPEC data <h2 id="heading-scroll2">Current oil market situation</h2> OPEC has been maintaining production cuts for many months in order to boost crude prices. However, numerous sources indicate that these limits are not being respected by all cartel members, as reported by Saudi Arabia's energy minister. Currently, the price of Brent crude is $73 per barrel, while Saudi Arabia, as OPEC's largest member, needs at least $85 to meet its economic plans. As tensions in the region escalate and some OPEC countries fail to comply with production limits, Saudi Arabia may have to increase production to maintain its market share. Despite the escalation of conflict in the Middle East, the situation in oil markets remains stable and a significant increase in prices would require a major supply disruption. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_WBRUSD_15.10.png" alt="chart Brent crude oil" /> Source: Conotoxia MT5, XBRUSD, Daily <h2 id="heading-scroll3">Oil price development forecasts</h2> Currently, the oil price is approaching $80 per barrel. However, Conotoxia Ltd experts believe that fears of a recession in the United States are overestimated by the market, OPEC projections do not reflect a potential economic recovery in China, and yet shortages are forecast for this market. Therefore, in the baseline scenario, Conotoxia’s analysts assume a continuation of oil price increases, with the possibility of exceeding $90 per barrel by the end of this year.   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.forex conotoxia.comTue, 15 Oct 2024 13:39:00 +0200OPEC in its latest report maintains its oil demand and supply projections for 2025. The current escalation of the conflict in the Middle East does not seem to have affected the cartel's projections, which continue to point to shortages in the crude mark...Next week to watch (14-18.10.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-14-18-10-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-14-18-10-2024Why are wages in Germany higher than in Poland? What has made the United States the cradle of the world's richest people? How are India and China building their economic power? We tried to answer these and other questions in our last article. Looking ahead, we begin the Q3 earnings season. Traditionally, financial companies will be the first to report data, providing a better assessment of the current economic situation in the US. In September 2024, US core inflation rose by 0.3 per cent m/m and 3.3 per cent y/y, strengthening the dollar. Despite expectations of interest rate cuts by the Fed, inflation and good labour market data suggest that the process will be gradual. The dollar is holding near PLN 3.92 and the euro at PLN 4.30. Analysts at Conotoxia Ltd indicate that the dollar could fall below PLN 3.85 by the end of 2024. At present, however, currency markets remain influenced by uncertainty surrounding the situation in the Middle East and the upcoming US elections. The ECB's decision on a possible further interest rate cut, as well as the publication of inflation data from the UK and the euro area, appear to be key in the coming week.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">UK consumer price index (CPI) monthly (September)</a></li> <li><a href="#heading-scroll2">Eurozone consumer price index (CPI) monthly (September)</a></li> <li><a href="#heading-scroll3">Eurozone interest rate decision</a></li> </ol> <h2 id="heading-scroll1">Wednesday, 16.10, 8:00 CET, UK consumer price index (CPI) monthly (September)</h2> The annual rate of inflation in the UK in August this year was 2.2 per cent, remaining at the same level as in July. The main drivers of price increases were in the leisure, cultural and used car sectors. In turn, falling fuel prices, particularly petrol, and reductions in restaurant and hotel prices, including alcohol, put downward pressure on inflation. Analysts' consensus is for UK CPI inflation to remain further down at 2.2 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_UK_11.10.png" alt="UK inflation graph" /> Source: Tradingeconomics A higher-than-expected reading could be bullish for GBP, while a lower-than-expected reading could act bearishly on GBP. Impact: EUR/GBP, GBP/USD, GBP/PLN <h2 id="heading-scroll2">Thursday, 17.10, 11:00 CET, Eurozone consumer price index (CPI) monthly (September)</h2> According to the preliminary reading for September 2024, inflation in the euro area fell to 1.8 per cent, the lowest level since April 2021 and below the ECB's target of 2 per cent. Energy prices fell and inflation in services slowed, although food, alcohol and tobacco prices rose slightly. The ECB expects inflation to pick up by the end of the year, but should fall back towards 2 per cent from 2025. Analysts' consensus is for CPI inflation in the euro area to remain at 1.8 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wukres_inflacja_EU_11.10.png" alt="EU inflation graph" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR. Impact: EUR/USD, EUR/PLN <h2 id="heading-scroll3">Thursday 17.10, 14:15 CET, Eurozone interest rate decision</h2> The ECB cut interest rates by 60 bps at its last meeting, which was in line with market expectations. This was the 2nd rate cut in this cycle, but the first time the ECB has started a cycle of rate cuts before the US. In its latest meeting report, the ECB suggested that a gradual rate cut would be appropriate if data were in line with forecasts. Faster disinflation or a slower recovery may require faster action, while slower disinflation or rapid economic growth may require a slower pace. Policymakers stressed that decisions will depend on incoming data. Analysts' consensus is for another 25bp interest rate cut. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_EU_11.10.png" alt="EU interest rate graph" /> Source: Tradingeconomics.com A higher-than-expected interest rate could be bullish for the EUR, while a lower-than-expected rate could act bearishly on the EUR. Impact: EUR/USD, EUR/PLN   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 11 Oct 2024 13:51:00 +0200Why are wages in Germany higher than in Poland? What has made the United States the cradle of the world's richest people? How are India and China building their economic power? We tried to answer these and other questions in our last article. Looking ah...Why do people earn less in Poland than in Germany?https://invest.conotoxia.com/investment-research/comments/why-do-people-earn-less-in-poland-than-in-germanyhttps://invest.conotoxia.com/investment-research/comments/why-do-people-earn-less-in-poland-than-in-germanyWhy are wages higher in Germany than in Poland? What makes the United States the cradle of the world's richest people? By what means are India and China building their economic power? Many answers to these questions can be obtained by accurately interpreting the CAR indicators.Comparative advantage is often misjudged by many market observers. It is most often assessed in terms of the number of factories. Although factories increase production and reduce unemployment, their impact on wages is limited, especially for the production of basic goods such as meat or raw materials. For wages to be higher, it is necessary to have comparative advantages in high-margin sectors. Products must be non-substitutable and attractive to consumers, even at higher prices than competitors. An example is luxury goods, which are sold at high margins despite low production costs. Let us therefore look at how to measure and how individual comparative advantages affect earnings and quality of life in a country. <h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Revealed Comparative Advantage (RCA)</a></li> <li><a href="#heading-scroll2">Why do you earn good money in Germany?</a></li> <li><a href="#heading-scroll3">Is the strength of the Polish economy strong diversification?</a></li> <li><a href="#heading-scroll4">US with surprisingly low competitiveness</a></li> <li><a href="#heading-scroll5">India's emerging power based on cheap labour</a></li> <li><a href="#heading-scroll6">China stands on industry</a></li> </ol> <ul> <li style="font-weight: 400;" aria-level="1">To measure comparative advantage, the Revealed Comparative Advantage (RCA) index is used, which assesses a country's competitiveness in the production of a specific good or service against other countries by measuring its share of global exports of the good in question.</li> <li style="font-weight: 400;" aria-level="1">The German economy is based on advanced industrial technologies, such as the production of automobiles and medical equipment. It is least competitive in low-value-added products such as raw materials and foodstuffs.</li> <li style="font-weight: 400;" aria-level="1">Poland avoids the problems associated with the high concentration of the economy on selected sectors, achieving comparative advantage in many categories, especially in raw materials, food products and industrial goods. However, low value added in these sectors explains why wages in Poland remain lower than in Germany.</li> <li style="font-weight: 400;" aria-level="1">The US economy performs poorly in terms of export competitiveness as a result of its greater reliance on domestic demand. Although the US has a comparative advantage in a small number of product categories, it is the world leader in financial services, which contributes to the functioning of many billionaires.</li> <li style="font-weight: 400;" aria-level="1">India's economy is characterised by significant competitiveness due to comparative advantage in many products. Exports consist mainly of food, raw materials and processed goods, which are largely based on low labour costs.</li> <li style="font-weight: 400;" aria-level="1">China has a comparative advantage in many product categories, which is similar to the situation in Poland. Although they still base their economy on low-cost products, more advanced and processed products are increasingly appearing in their exports.</li> </ul> <h2 id="heading-scroll1">Revealed Comparative Advantage (RCA)</h2> The Revealed Comparative Advantage (RCA) index is used in economics and international trade to assess a country's competitiveness in producing a particular good or service compared to other countries. RCA measures whether a country has a comparative advantage in a particular area, meaning that its products or services are more competitive in the international market. The interpretation of the indicator is simple: if the CAR is greater than 1, it means that the country has a comparative advantage in a particular sector. In other words, the country's share of global exports of a particular good is greater than its share of the country's total exports. An index of less than 1 suggests that the country has a smaller share of exports of the good in question compared to the global average. For example, an CAR of 2 indicates a high comparative advantage, indicating that a country has a significantly larger share of global production of that good than in other sectors. <h2 id="heading-scroll2">Why do you earn good money in Germany?</h2> The German economy has long been based on high-tech industries, such as the production of cars and other vehicles, which require some of the most advanced industrial processes in the world. As a result, Germany achieves a competitive advantage (CAR > 1) in 40 per cent of product categories. However, this economy bases its advantage on a relatively narrow group of sectors, mainly industrial, as only 8 per cent of categories have an RCA > 2. The most competitive products include tractors, aircraft and spacecraft, motor vehicles, medical apparatus and internal combustion engines. Each of these categories requires advanced know-how, highly qualified specialists and significant capital investment. In contrast, the least competitive German products (with the lowest CAR) are low-value-added goods such as food products (meat, fruit, vegetables) and raw materials (nickel, natural gas, aluminium, gold), which are mainly used for industrial production and processing into more advanced products. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_RCA_Niemcy_10.10.png" alt="RCA Germany" /> Source: UNCTADstat <h2 id="heading-scroll3">Is the strength of the Polish economy strong diversification?</h2> Although the high concentration of the economy on selected sectors brings with it many problems, particularly related to vulnerability to external factors (such as rising energy prices or broken supply chains), Poland seems to avoid similar difficulties. As many as 49 per cent of product categories achieve a comparative advantage in Poland, many of which are significant (CAR > 2). But why do wages in Poland still remain lower than in Germany? The answer lies in the structure of these comparative advantages. Poland dominates in categories such as raw materials (coke, coal), food and agricultural products (fish, meat, offal, eggs, cereals, chocolate), manufactured goods (railway rails, steel structures, paper, ammunition, machine and car parts), and household goods (cutlery, electrical appliances, furniture, toiletries). In most of these sectors, value added is relatively low, which explains why, despite Poland's low level of unemployment, wages remain below the European average. Nevertheless, this structure of the economy provides a solid basis for further development. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_RCA_Polska_10.10.png" alt="RCA Poland" /> Source: UNCTADstat <h2 id="heading-scroll4">US with surprisingly low competitiveness</h2> On the basis of export competitiveness, the US economy performs surprisingly poorly, due to its greater reliance on domestic demand, fuelled by the availability of vast amounts of investment capital. The US shows a comparative advantage in only 31 per cent of product categories, with only 5 per cent of these having a significant advantage (CAR > 2). The most competitive US products include works of art, arms and ammunition, films, specialised medical devices, natural gas, and food and agricultural products (such as cereals and corn). One would expect much more from the world's largest economy in terms of exports. However, it is worth remembering that these figures do not include financial products and services, in which the US is the world leader. It is the US stock market that has helped many of the world's richest billionaires raise capital. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_RCA_USA_10.10.png" alt="RCA USA" /> Source: UNCTADstat <h2 id="heading-scroll5">India's emerging power based on cheap labour</h2> The Indian economy, despite having a comparative advantage in 40 per cent of product types (like Germany), has as many as twice as many products for which the CAR exceeds 2. This means that this economy has many comparative advantages, which raises the question of what it bases its competitiveness on. Analysing the products that account for a significant share of India's global export trade are: food and agricultural commodities (rice, spices, tea, sugar, cattle), raw materials and inputs (lead, tobacco, building materials, silk and textiles) and processed products such as jewellery, motorbikes and medicines. In most of these, comparative advantage is achieved mainly through low labour costs rather than through high added value. However, we are beginning to see slow changes in the economy in this area too. India has been categorised by the International Monetary Fund as one of the fastest growing economies in the coming years, with a projected average annual GDP growth of 7 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_RCA_Indie_10.10.png" alt="RCA India" /> Source: UNCTADstat <h2 id="heading-scroll6">China stands on industry</h2> Is China still basing its economy on cheap counterfeits exported around the world? In terms of comparative advantages, it resembles Poland's economy in numbers, as it has a comparative advantage in as many as 47 per cent of product categories, with 16 per cent having an RCA of more than 2. These include products such as materials (ceramics, textiles), clothing, toys, furniture and lighting, as well as more high-tech consumer electronics and household appliances (televisions, radios, sound players) and machinery and apparatus (automatic data processing machines, electrical apparatus, sanitary appliances). Although China still maintains much of its comparative advantage in exports through low-cost products, more advanced and processed products are also increasingly emerging. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_RCA_Chiny_10.10.png" alt="RCA China" /> Source: UNCTADstat   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comThu, 10 Oct 2024 10:43:00 +0200Why are wages higher in Germany than in Poland? What makes the United States the cradle of the world's richest people? By what means are India and China building their economic power? Many answers to these questions can be obtained by accurately interpr...Next week to watch (7-11.10.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-7-11-10-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-7-11-10-2024The Żabka Group, which manages over 10,000 shops, earlier this week announced details of its stock market debut, a particularly high-profile topic among Polish investors. This will be one of the largest debuts on the Polish capital market, and our team of analysts took a close look at the attractiveness of the Group's offering. We also analysed the situation and valuations of three particularly important global stock markets: United States, China and Taiwan. We have tried to assess whether there is an overvaluation of equities and what trends we will observe in the near future. In the coming week, US CPI and PPI inflation data will be particularly important. On Wednesday, we will also learn about FOMC members' discussions at the September meeting, which may help to understand the pace of further interest rate cuts.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">FOMC meeting minutes</a></li> <li><a href="#heading-scroll2">US consumer price index (CPI) monthly (September)</a></li> <li><a href="#heading-scroll3">US producer price index (PPI) monthly (September)</a></li> </ol> <h2 id="heading-scroll1">Wednesday 9.10, 20:00 CET, FOMC meeting minutes</h2> The Federal Reserve's Open Market Committee (FOMC) meeting in July discussed the economic outlook ahead of the first interest rate cut in the cycle, in September. Already at that time, policymakers noted a further slowdown in economic growth and inflation, with the expectation that price dynamics would return to around 2 per cent by 2026. Inflation and employment risks are beginning to level off, although some factors, such as supply chain disruptions and geopolitical tensions, may increase inflationary pressures. Risks to financial stability, including cyber-attack risks and those related to the commercial real estate market, remain significant. Most participants felt that with inflation continuing to fall, policy easing would be possible at future meetings. A more hawkish tone to the latest ‘minutes’ could have a bullish impact on the USD, while a more dovish tone could be bearish for the USD. Impact: EUR/USD, USD/PLN <h2 id="heading-scroll2">Czwartek, 10.10, 14:30 CET, indeks cen konsumpcyjnych w Stanach Zjednoczonych (CPI) miesięcznie (wrzesień)</h2> The US annual inflation rate fell to 2.5 per cent in August this year, the lowest level since February 2021 and the fifth consecutive month of decline. Energy costs, including gasoline and gas, declined significantly, as did food, transport and car prices. Increases, however, were recorded in the shelter and clothing categories. The monthly CPI rose by 0.2 per cent, in line with expectations. Analysts' consensus forecasts that disinflation of the US CPI will continue to advance to 2.3 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_CPI_04.10.png" alt="chart CPI inflation" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD. Impact: EUR/USD, USD/PLN <h2 id="heading-scroll3">Friday, 11.10, 14:30 CET, US producer price index (PPI) monthly (September)</h2> In August this year, producer inflation - the increase in the price of goods straight from factories and the costs incurred by companies - was 1.7 per cent year-on-year in the US. This is the lowest level in six months, down from 2.1 per cent in July (after downward revision) and below market expectations of 1.8 per cent.  Analysts' consensus is for US PPI inflation to fall to 1.3 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_PPI_04.10.png" alt="chart PPI inflation" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD. Impact: EUR/USD, USD/PLN   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 04 Oct 2024 13:33:00 +0200The Żabka Group, which manages over 10,000 shops, earlier this week announced details of its stock market debut, a particularly high-profile topic among Polish investors. This will be one of the largest debuts on the Polish capital market, and our team ...A debut that could prove to be a trap? Analysis of the Żabka Group IPOhttps://invest.conotoxia.com/investment-research/comments/a-debut-that-could-prove-to-be-a-trap-analysis-of-the-zabka-group-ipohttps://invest.conotoxia.com/investment-research/comments/a-debut-that-could-prove-to-be-a-trap-analysis-of-the-zabka-group-ipoLater this month, the Żabka Group, which manages over 10,000 shops, can be expected to go public. The last significant IPO on the Polish stock exchange was that of Allegro, whose offering amounted to PLN 10.6 billion with a valuation of PLN 44 billion. The owners of Żabka, intend to sell shares worth PLN 6.45 billion at a valuation of PLN 21.5 billion, so it will not be the biggest debut, but it may be significant. However, let's look at the details of this valuation to find out what potential it could have.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">First yellow card early in the match</a></li> <li><a href="#heading-scroll2">Żabka's successes to date</a></li> <li><a href="#heading-scroll3">Valuation of Żabka like a tech giant</a></li> </ol> <h2 id="heading-scroll1">First yellow card early in the match</h2> The immediate purpose of Żabka's debut is not to raise capital for the company's development, but to sell 30 per cent of all shares held mainly by the US private equity fund CVC Capital. This could be the first warning sign for potential investors, as one does not sell the hen that lays golden eggs. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_CVC_Capital_03.10.png" alt="chart CVC Capital" /> Source: Żabka Group prospectus Żabka's planned debut is expected to facilitate access to capital for future growth and acquisitions, increasing the company's credibility in the eyes of investors. However, the question arises why the owners do not decide to issue new shares already at the debut instead of selling their shares. Management argues that a stock market debut will raise the Group's profile, attract new investors and provide liquidity for existing shareholders, while motivating management and enhancing the company's image as an employer. <h2 id="heading-scroll2">Żabka's successes to date</h2> Comparable in some ways to the Uber model, Żabka's business model is based on converting a significant part of its operations to franchisees, which significantly reduces the cost and risk of doing business. The company's primary focus on data analytics and logistics has streamlined the convenience ecosystem it has created. This can be seen in the data - sales grew at an annual rate of 23 per cent between 2000 and 2023, and more than 1,000 new shops were opened last year. Future growth potential also lies in international expansion, particularly in Romania, where the company sees great opportunities. Żabka already has more than 10,500 shops and plans include growing the chain to 19,500 outlets in Poland and 4,000 in Romania and doubling overall sales in the next five years. Żabka's business model, based on meeting the needs of customers who value fast, convenient shopping (not necessarily the cheapest), allows the company to generate higher margins than its competitors. For example, Dino Polska's EBITDA margin is 8 per cent, while Żabka achieved a margin of 12.4 per cent in 2023. As a result, the company benefits from economies of scale, and opening new shops involves lower costs than chains such as Biedronka or Dino. In the first half of 2024, Żabka recorded sales growth of 23 per cent year-on-year, while Dino recorded growth of 15 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Dino_03.10.png" alt="chart Dino" /> Source: Tradingview It is worth remembering, however, that Żabka operates on a franchise model, which involves giving 16.5 per cent of revenue to serve more than 9,000 franchisees. This affects the final net profit margin (after taking into account depreciation and amortisation and interest on debt), which is only 1.8 per cent. By comparison, the net margin for Dino Polska is 5.2 per cent and for the Portuguese owner of the Biedronka chain, Jerónimo Martins, 1.9 per cent. Such a low net margin for Żabka is due to the very high level of debt, which accounts for 91 per cent of the company's assets, compared to 43 per cent for Dino Polska and 79 per cent for Jerónimo Martins. <h2 id="heading-scroll3">Valuation of Żabka like a tech giant</h2> It is worth remembering the principle often emphasised by Professor Aswath Damodaran: ‘keep your eyes on the price’. A good investment is about buying an asset below its intrinsic value, rather than picking trendy and widely advertised products. Particular caution should be exercised when investing in high-profile IPOs, which often end in negative results. Allegro's recent major IPO is a case in point - after four years, the company's shares are trading 15 per cent below the offer price on the day of the IPO. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Allegro_03.10.png" alt="chart Allegro" /> Source: Tradingview Żabka's top offer price per share is PLN 21.50, which translates into a capitalisation of PLN 21.5 billion. For comparison, the Polish shop chain Dino is valued at PLN 33.5 billion and the Portuguese owner of Biedronka (Jerónimo Martins) is valued at PLN 48.1 billion (€11.2 billion). At first glance, it seems that Żabka is much lower valued compared to its domestic competitors. However, after looking at the valuation ratios, the situation looks different. The price-to-earnings (P/E) ratio for Żabka is around 45, while it is 28 for Dino Polska and 15.7 for Jerónimo Martins. Of course, this ratio does not take into account potential future earnings growth, but it suggests that Żabka's valuation assumes more than twice as fast earnings growth compared to its competitors. Management announced in the prospectus that it plans to double sales over the next five years, which would imply annual profit growth of around 15 per cent, compared to a dynamic 23 per cent per year to date over the past two decades. However, a valuation of £21.50 per share would require growth of around 24 per cent per annum over the next five years, higher than management's own forecasts. This is another warning sign, suggesting that the investment in Żabka's IPO could follow a similar path to the Allegro or Pepco debuts, leading to long-term shareholder disappointment. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/tabela_wycena_%C5%BBabka_03.10.png" /> Source: Conotoxia own analysis   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76,23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comThu, 03 Oct 2024 11:43:00 +0200Later this month, the Żabka Group, which manages over 10,000 shops, can be expected to go public. The last significant IPO on the Polish stock exchange was that of Allegro, whose offering amounted to PLN 10.6 billion with a valuation of PLN 44 billion. ...Investment gems: Taiwan, China and the US in the light of artificial intelligencehttps://invest.conotoxia.com/investment-research/comments/investment-gems-taiwan-china-and-the-us-in-the-light-of-artificial-intelligencehttps://invest.conotoxia.com/investment-research/comments/investment-gems-taiwan-china-and-the-us-in-the-light-of-artificial-intelligenceA good investment is defined not by whether we buy shares in the innovative companies that are the most talked about, but by whether we buy assets below their intrinsic value. Howard Marks, a well-known investor, said: ‘Investment success comes not from buying good things, but from buying them at a favourable price’. Therefore, let's take a look at the current situation of valuations of individual markets.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">United States</a></li> <li><a href="#heading-scroll2">Taiwan</a></li> <li><a href="#heading-scroll3">The awakening Chinese dragon</a></li> <li><a href="#heading-scroll4">Summary</a></li> </ol> <h2 id="heading-scroll1">United States</h2> New York University professor Aswath Damodaran follows a similar principle to Howard Marks, saying: ‘keep your eyes on the price’. Analysing the valuation of individual markets, one can conclude that the US stock market does not currently appear to be particularly attractively valued. The fundamental price-to-earnings (P/E) ratio for the main S&P 500 index is 29.9, with a historical average of 16. However, it should be emphasised that these levels are not yet indicative of a speculative bubble or crisis - in such situations the ratio has been above 40, and analysts have sought alternative methods of valuing companies. S&P 500 - Price to earnings <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PE_SPX_01.10.png" alt="PE chart S&P 500" /> Source: MacroMicro The increased valuations of US equities are due to the increased potential of artificial intelligence technology, which is now not just a future hope, but is translating into real sales growth for many companies. Therefore, it is expected that US indices are likely to be correctly valued, due to the dynamic development of AI. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_SPX_01.10.png" alt="SPX chart" /> Source: Conotoxia MT5, US500, Daily <h2 id="heading-scroll2">Taiwan</h2> The development of artificial intelligence requires enormous computing power, making the semiconductor sector a particular beneficiary of this trend. The sector is divided into two segments: semiconductor design, led by the well-known company Nvidia, and semiconductor manufacturing. Although most semiconductor design companies are based in the US, as much as 90 per cent of the most advanced semiconductors are manufactured in Taiwan. Taiwan's main index TAIEX, despite earnings growth of 14 per cent year-on-year (versus 9 per cent for the S&P 500 index), is priced significantly lower. The P/E ratio for the TAIEX is 22.8, meaning that, despite its higher growth potential, Taiwanese shares are cheaper than their US counterparts. TAIEX - Price to earnings <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PE_TAIEX_01.10.png" alt="TAIEX PE chart" /> Source: MacroMicro The key player here is Taiwan's largest company TSMC, which accounts for more than 20 per cent of this index and is a major semiconductor supplier to giants such as Nvidia, Apple and AMD. These and other leading technology companies have announced increased investment in the development of artificial intelligence technology, which will require an increasing number of specialised graphics cards and processors, and in their production Taiwan has an undeniable global competitive advantage. For this reason, it is expected that the current valuations of Taiwan's equity indices appear more attractive than their US counterparts, and that artificial intelligence development could be a key driver of earnings growth in the coming years. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_TSMC_01.10.png" alt="TSMC chart" /> Source: Conotoxia MT5, TaiwanSemic, Daily <h2 id="heading-scroll3">The awakening Chinese dragon</h2> One of the cheapest equity markets among the major economies is China. The MSCI China index is trading with a P/E ratio of 11.3, which means that it is almost three times lower valued than the US S&P 500. Behind such a low valuation of Chinese equities is the country's economic situation. Following the bankruptcy of major property developer Evergrande Group, the Chinese economy is facing numerous problems. In response, the government, with the involvement of the People's Bank of China, has decided on one of the boldest support programmes in recent years. MSCI China - Price to earnings <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PE_China_01.10.png" alt="PE China chart" /> Source: MacroMicro The central bank cut interest rates and reserve requirements for banks to stimulate economic growth and ease the property crisis. The interest rate on existing mortgages fell by 0.5 percentage points, and the minimum deposit for the purchase of a second home was reduced from 25 per cent to 15 per cent. The central bank also announced programmes to support stock market investment through loans from the central bank. Since this decision was announced, the entire Chinese index has gained as much as 24 per cent in just one week. it is expected that the Chinese stock market can still contain many attractively valued companies. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_China50_01.10.png" alt="China50 chart" /> Source: Conotoxia MT5, China50, Daily <h2 id="heading-scroll4">Summary</h2> Stock market indices in the US, China and Taiwan may yet surprise investors in the future. While the US market appears to be correctly valued, especially in the context of the development of artificial intelligence, Taiwanese stocks, especially in the semiconductor sector, have more attractive valuations with strong growth potential. China, on the other hand, offers the lowest valuations among the major economies, and government and central bank actions may support further market growth despite the current economic challenges. It is important to remember to pay particularly close attention to the valuations of individual markets and stocks because, as we quoted in the introduction, ‘Investment success comes not from buying good things, but from buying them at a favourable price’.   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79,03% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comTue, 01 Oct 2024 13:07:00 +0200A good investment is defined not by whether we buy shares in the innovative companies that are the most talked about, but by whether we buy assets below their intrinsic value. Howard Marks, a well-known investor, said: ‘Investment success comes not from...Next week to watch (30.09-04.10.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-30-09-04-10-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-30-09-04-10-2024Investors are increasingly overcoming fears of a possible recession in the US, as can be seen by the gains in the main S&P 500 index, which has reached new historic peaks. More important than predicting the future of the economy, however, is understanding the current situation. The rise in US unemployment from 3.4 to 4.2 per cent, although it is still below average, seems to be a worrying sign. The GDP growth rate is 3 per cent in the second quarter, compared to 1.6 per cent at the beginning of the year. Industrial production in August was unchanged from a year ago, indicating that growth is mainly driven by the services sector. Data from the latest PMI reading for manufacturing was 47 , suggesting a decline in the near future, while the services sector is expected to grow, reaching a PMI reading of 55. Conotoxia’s analysts therefore remain optimistic about the future of the US economy, closely monitoring labour market and industrial data. In the coming week, US labour market data, which will be announced on Friday, will be particularly important. We also expect news on the UK economy, which is showing the first signs of a return to growth. We will also learn inflation readings for September from Germany and the euro area.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">UK gross domestic product (GDP) by quarter (Q2).</a></li> <li><a href="#heading-scroll2">German consumer price index (CPI) monthly (September)</a></li> <li><a href="#heading-scroll3">Eurozone consumer price index (CPI) monthly (September)</a></li> <li><a href="#heading-scroll4">US unemployment rate on a monthly basis (September)</a></li> </ol> <h2 id="heading-scroll1">Monday, 30.09, 8:00 CET, UK gross domestic product (GDP) by quarter (Q2).</h2> We learned from the preliminary reading that the UK economy grew by 0.9 per cent year-on-year in Q2 2024, the strongest growth since Q3 2022. The main driver of growth was the services sector, which expanded at a rate of 1.3 per cent, but industrial production fell by 0.6 per cent. Investment, household and government spending increased, while exports declined and imports rose. This situation exacerbates the trade deficit and could weaken sterling. Analysts' consensus is for GDP growth to be confirmed at 0.9 per cent year-on-year. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_UK_27.09.png" alt="UK GDP graph" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for GBP, while a lower-than-expected reading could act bearishly on GBP. Impact: EUR/GBP, GBP/USD, GBP/PLN <h2 id="heading-scroll2">Monday, 30.09, 14:00 CET, German consumer price index (CPI) monthly (September)</h2> Annual inflation in Germany stood at 1.9 per cent in August 2024, down from 2.3 per cent in July. This was the lowest inflation since March 2021, helped by a faster decline in energy prices. Food prices rose for the fifth consecutive month. Analysts' consensus forecasts that Germany's CPI disinflation will continue to advance to 1.5 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_niemcy_27.09.png" alt="chart of the German CPI" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR. Impact: EUR/USD, EUR/PLN <h2 id="heading-scroll3">Tuesday, 1.10, 11:00 CET, Eurozone consumer price index (CPI) monthly (September)</h2> Annual inflation in the euro area fell to 2.2 per cent in August 2024, the lowest level since July 2021. Growth was driven by the prices of services and food, alcohol and tobacco, while energy prices fell. Disinflation was recorded in the zone's largest economies, with increases in only a few countries such as Latvia and Malta. In its forecasts, the ECB projects average inflation of 2.5 per cent in 2024 and 1.9 per cent in 2026. The analysts' consensus is for CPI inflation in the euro area to fall to 1.5 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_EU_27.09.png" alt="EU CPI chart" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR. Impact: EUR/USD, EUR/PLN <h2 id="heading-scroll4">Friday, 4.10, 14:30 CET, US unemployment rate on a monthly basis (September)</h2> The US unemployment rate fell to 4.2 per cent in August 2024 from 4.3 per cent in July. The number of unemployed remained at 7.1 million. The long-term unemployed account for 21.3 per cent of the total unemployed, slightly higher than a year ago. The labour force participation rate remained at 62.7 per cent, the highest since 2020. Analysts' consensus is for the US unemployment rate to rise to 4.3 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_bezrobocie_USA_27.09.png" alt="graph US unemployment" /> Impact: Tradingeconomics.com A higher-than-expected reading could be bearish for the USD, while a lower-than-expected reading could act bullishly on the USD. Impact: EUR/USD, USD/PLN   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79,03% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 27 Sep 2024 15:16:00 +0200Investors are increasingly overcoming fears of a possible recession in the US, as can be seen by the gains in the main S&P 500 index, which has reached new historic peaks. More important than predicting the future of the economy, however, is understandi...Next week to watch (23-27.09.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-23-27-09-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-23-27-09-2024As expected, the Federal Reserve cut interest rates by 50bp, although the scale of the reduction sparked divided opinions in the markets. The dollar initially weakened after the decision, with EUR/USD rising to 1.12 and USD/PLN falling to 3.82. It is likely that the Fed is planning another 50bp cut by the end of the year. Rate lowering in the US started later than in other developed countries, which is expected to be made up for by faster cuts. Invest.Conotoxia.com’s analysts point to a further possible fall in the dollar, with USD/PLN below 3.75 by mid-2025. In the coming week, markets will be closely monitoring key decisions and economic data that could significantly affect the quotations of the major currencies, particularly the franc. On Thursday, the Swiss National Bank will announce its interest rate decision, which could see another cut. On the same day, the final US GDP reading for the second quarter will be published. On Friday, meanwhile, the latest US PCE inflation data will be known.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Interest rate decision in Switzerland</a></li> <li><a href="#heading-scroll2">US gross domestic product (GDP) quarterly (Q2).</a></li> <li><a href="#heading-scroll3">US personal consumption expenditures (PCE) price index per year (August)</a></li> </ol> <h2 id="heading-scroll1">Thursday, 26.09, 9:30 CET, interest rate decision in Switzerland</h2> At its latest meeting in June, the Swiss National Bank cut its main interest rate by 25 basis points to 1.25 percent, in line with market expectations. It continued what started as one of the first cycles of rate cuts in developed countries. The decision appears to have been driven by falling inflationary pressures and the strength of the franc. The SNB forecasts annual inflation of 1.3 percent in 2024, 1.1 percent in 2025 and 1.0 percent in 2026, under the assumption of maintaining rates at 1.25 percent. The bank also forecasts moderate GDP growth of 1 percent in 2024 and 1.5 percent in 2025. Analysts' consensus is for another interest rate cut in Switzerland to 1 percent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_szwajcaria_20.09.png" alt="interest rate graph Switzerland" /> Source: Tradingeconomics.com A higher-than-expected interest rate could be bullish for the CHF, while a lower-than-expected interest rate could act bearishly on the CHF. Impact: EUR/CHF, USD/CHF, CHF/PLN <h2 id="heading-scroll2">Thursday, 26.09, 14:30 CET, US gross domestic product (GDP) quarterly (Q2).</h2> According to second estimates, US real GDP grew at an annual rate of 3.0 percent in the second quarter of 2024 and 1.4 percent in the first quarter. Growth was driven by consumer spending (2.9 percent), inventory investment (7.5 percent) and fixed asset investment (4.6 percent). Exports, non-residential investment and government spending figures were revised downwards. Analysts' consensus is for the final US GDP reading to remain at 3 percent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_USA_20.09.png" alt="graph of US GDP" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD. Impact: EUR/USD, USD/PLN <h2 id="heading-scroll3">Friday, 27.09, 14:30 CET, US personal consumption expenditures (PCE) price index per year (August)</h2> PCE inflation, the equivalent of CPI growth, remained at 2.5 percent in July, the lowest since February 2021. The low inflation allowed the Federal Reserve to cut interest rates by 50 bps for the first time this cycle. Analysts' consensus is for inflation to fall further to 2.4 percent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_PCE_20.09.png" alt="PCE inflation graph" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD. Impact: EUR/USD, USD/PLN   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79,03% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 20 Sep 2024 12:02:00 +0200As expected, the Federal Reserve cut interest rates by 50bp, although the scale of the reduction sparked divided opinions in the markets. The dollar initially weakened after the decision, with EUR/USD rising to 1.12 and USD/PLN falling to 3.82. It is li...Next week to watch (16 – 20.09.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-16-20-09-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-16-20-09-2024An important week ahead for investors with the US Federal Reserve deciding on the first interest rate cut since March 2020. Along with the US colleagues, Bank of England and Bank of Japan monetary policy members will come together next week to vote on where to set the key interest rates. However, all three central banks are in different positions. While the US potential interest rate cut would be the first one since the COVID-19 crisis, the BoE started loosening its monetary policy in August. The BoJ, on the other hand, has only recently started to tighten monetary policy, ending its era of negative rates since 2016. Meanwhile, major Asian markets will be closed for half a week to celebrate national holidays.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">UK Consumer Price Index (CPI) YoY (August)</a></li> <li><a href="#heading-scroll2">Euro Area Consumer Price Index (CPI) YoY (August)</a></li> <li><a href="#heading-scroll3">Fed Interest Rate Decision</a></li> <li><a href="#heading-scroll4">UK Interest Rate Decision</a></li> <li><a href="#heading-scroll5">Japan Interest Rate Decision</a></li> </ol> <h2 id="heading-scroll1">Wednesday 18.09. 08:00 CET, UK Consumer Price Index (CPI) YoY (August)</h2> In July 2024, the annual inflation rate in the UK increased slightly to 2.2 per cent from 2 per cent in June, although it remained below the anticipated rate of 2.3 per cent. There was a more significant rise in costs for housing and household services (3.7 per cent compared to 2.3 per cent), as the decline in gas (-22.8 per cent from -37.5 per cent) and electricity prices (-19.5 per cent from -21 per cent) was less severe than in the prior month. Additionally, prices for clothing and footwear saw a greater increase (2.1 per cent from 1.6 per cent), along with communication services (4.5 per cent from 2.9 per cent) and various goods and services (3.5 per cent from 2.9 per cent).  Meanwhile, inflation remained unchanged for food and non-alcoholic beverages (1.5 per cent) and education (4.5 per cent). Service inflation slowed to 5.2 per cent, marking the lowest rate since June 2022 and falling short of the Bank of England's forecast of 5.6 per cent. Prices for restaurants and hotels (4.9 per cent compared to 6.2 per cent) primarily reflected increases in hotel costs. In comparison, prices for recreation and culture rose (3.7 per cent from 3.9 per cent) along with transportation costs (0.2 per cent compared to 0.9 per cent), influenced mainly by maintenance and repairs (5.7 per cent from 8 per cent), passenger air transport (-10.4 per cent from -0.9 per cent), and motor fuels.  The core inflation rate decreased to 3.3 per cent, down from 3.5 per cent and below the expected 3.4 per cent. The Consumer Price Index (CPI) declined by 0.2 per cent compared to June. Analysts expect the UK's inflation rate to remain unchanged at 2.2 per cent from the previous month's reading.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_UK_13.09.png" alt="UK inflation graph" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bearish effect on the GBP, while a lower-than-expected reading could be bullish for the GBP. Impact: USD/GBP, EUR/GBP <h2 id="heading-scroll2">Wednesday 18.09. 11:00 CET, Euro Area Consumer Price Index (CPI) YoY (August)</h2> Initial estimates show that the annual inflation rate in the Euro Area dipped to 2.2 per cent in August 2024, down from 2.6 per cent in the previous month, in line with market expectations and representing the smallest increase in consumer prices since July 2021. This decline marked a shift from several months of persistent inflation above the 2.5 per cent level, suggesting a move towards the European Central Bank's (ECB) target of 2 per cent and creating a favourable environment for adjustments in interest rates by the central bank. The slowdown was primarily driven by a significant drop in energy prices, with base effects contributing to a decrease of -3 per cent in August compared to a rise of 1.2 per cent in July, while inflation for non-energy industrial goods also slowed to 0.4 per cent from 0.7 per cent. Conversely, inflation for services increased to 4.2 per cent from 4 per cent, and prices for food, alcohol, and tobacco rose to 2.4 per cent from 2.3 per cent. When excluding energy and unprocessed food, price growth remained steady at 2.8 per cent. On a monthly basis, the Harmonised Index of Consumer Prices (HICP) in the Euro Area rose by 0.2 per cent in August. Analysts' expectations align with the initial estimates of the 2.2 per cent inflation rate in the Euro Area in August.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_EU_13.09.png" alt="chart EU inflation" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bearish effect on the EUR, while a lower-than-expected reading could be bullish for the EUR. Impact: EUR/USD, EUR/GBP, EUR/PLN <h2 id="heading-scroll3">Wednesday 18.09. 20:00 CET, Fed Interest Rate Decision</h2> During his address at the Jackson Hole Economic Symposium, Federal Reserve Chairman Jerome Powell indicated that the central bank is likely to reduce interest rates in the upcoming September meeting. He pointed out that the US labour market is cooling rapidly, following the weaker jobs report from July and the recent downward revision of payroll figures. Powell also mentioned that the Federal Open Market Committee (FOMC) has become increasingly confident that inflation is trending towards the central bank's 2 per cent target, suggesting that it is an appropriate time to shift monetary policy toward less restrictive measures. This statement came after the release of minutes from the Federal Reserve's previous meeting, which revealed that most policymakers concur that lowering the federal funds rate this quarter would be suitable.  Analysts expect the Fed funds interest rate to be lowered to 5.00 per cent in the upcoming meeting.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_USA_13.09.png" alt="US rate chart" /> Source: Tradingeconomics.com A decision on a higher-than-expected interest rate may have a bullish effect on the USD, while a decision on a lower-than-expected interest rate could be bearish for the USD. Impact: EUR/USD, USD/GBP, USD/PLN <h2 id="heading-scroll4">Thursday 19.09. 13:00 CET, UK Interest Rate Decision</h2> In its August meeting, the Bank of England reduced its Bank Rate by 25 basis points to 5 per cent, which was a move anticipated by a small majority of market participants. However, the Bank indicated it will proceed cautiously with any further easing of monetary policy until there is greater confidence that inflation will remain under control. This rate cut marks a decrease from the 16-year high at which the rate had been held for the past year. The decision was described as "finely balanced," with four members of the Monetary Policy Council choosing to keep borrowing costs unchanged. This choice reflected concerns that while UK inflation has slowed, rising service prices and potential second-round effects could undermine the progress made by the central bank. Nevertheless, the Committee remained confident that headline inflation would fall and that inflation expectations would move closer to target. The MPC also noted that restrictive policy is needed to slow GDP growth to below potential and to ease labour market conditions further, justifying a more accommodative policy stance.  Analysts expect the UK interest rate to stay unchanged at 5.00 per cent in the upcoming meeting.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_UK_13.09.png" alt="UK rate chart" /> Source: Tradingeconomics.com A decision on a higher-than-expected interest rate may have a bullish effect on the GBP, while a decision on a lower-than-expected interest rate could be bearish for the GBP. Impact: EUR/GBP, USD/GBP, GBP/PLN <h2 id="heading-scroll5">Friday 20.09. 05:00 CET, Japan Interest Rate Decision</h2> In its July 2024 meeting, the BoJ increased its key short-term interest rate to around 0.25 per cent, up from the previous 0 to 0.1 per cent established in March. The central bank also announced plans to reduce its monthly bond purchases to 3 trillion JPY between January and March 2026, down from the current 6 trillion JPY, as part of a move towards more conventional monetary policy. Starting in August, the BoJ will offer to buy 400 billion JPY of 5- and 10-year Japanese government bonds (JGBs) in each operation, eliminating the previous range of 400-550 billion JPY. These adjustments are aimed at decreasing the BoJ's nearly 5 trillion USD balance sheet and gradually withdrawing from the bond market. In its quarterly outlook, the BoJ revised its core inflation forecast for the fiscal year 2024 to about 2.5 per cent, down from the April estimate of 2.8 per cent. Inflation is expected to be around 2 per cent for fiscal years 2025 and 2026. The bank also reduced its GDP growth forecast for 2024 to 0.6 per cent from 0.8 per cent due to a statistical revision while maintaining its 1.0 per cent growth outlook for fiscal years 2025 and 2026. Analysts expect Japan's interest rate to stay unchanged at 0.25 per cent in the upcoming meeting.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_japonia_13.09.png" alt="rate chart Japan" /> Source: Tradingeconomics.com A decision on a higher-than-expected interest rate may have a bullish effect on the JPY, while a decision on a lower-than-expected interest rate could be bearish for the JPY. Impact: EUR/JPY, USD/JPY, GBP/JPY   Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79.03 %  of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 13 Sep 2024 11:41:00 +0200An important week ahead for investors with the US Federal Reserve deciding on the first interest rate cut since March 2020. Along with the US colleagues, Bank of England (BoE) and Bank of Japan (BoJ) monetary policy members will come together next week ...Next week to watch (9-13.09.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-9-13-09-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-9-13-09-2024The US bond yield curve, which had been inverted for the past two years, had returned to normal. This meant that short-term bonds offered higher yields than long-term bonds, which was counterintuitive. Historically, an inversion of this curve has always presaged a recession within a few to several months. In the coming week, Thursday's ECB interest rate decision, preceded by inflation readings in Germany and the US, will be key for investors.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">German consumer price index (CPI) annualised (August)</a></li> <li><a href="#heading-scroll2">US consumer price index (CPI) annualised (August)</a></li> <li><a href="#heading-scroll3">Eurozone interest rate decision</a></li> </ol> <h2 id="heading-scroll1">Tuesday, 10.09, 8:00 CET, German consumer price index (CPI) annualised (August)</h2> According to preliminary estimates, Germany's annual inflation rate fell from 2.3 per cent in July to 1.9 per cent in August 2024, the lowest level since March 2021. Compared to the previous month, the CPI fell by 0.1 per cent Meanwhile, an increase of 0.1 per cent was expected. Analysts' consensus is for CPI inflation to remain at 1.9 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_Niemcy_6.09.png" alt="graph inflation Germany" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR. Impact: EUR/USD, EUR/PLN <h2 id="heading-scroll2">Wednesday, 11.09, 14:30 CET, US consumer price index (CPI) annualised (August)</h2> US annual inflation fell to 2.9 per cent in July 2024, the lowest level since March 2021, down from 3 per cent in June. Housing, transport and clothing costs declined, while food inflation stabilised at 2.2 per cent. Analysts' consensus forecasts, a further decline in CPI inflation to 2.6 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflajca_USA_6.09.png" alt="graph US inflation" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD. Impact: EUR/USD, USD/PLN <h2 id="heading-scroll3">Thursday, 12.09, 14:15 CET, Eurozone interest rate decision</h2> The ECB kept interest rates unchanged at its July meeting, in line with expectations. The main rate remains at 4.25 per cent. Despite high price pressures and inflation in the services sector, the ECB forecasts that inflation will remain above target until 2025. The Bank faces a difficult choice: to continue cutting rates, in line with market expectations and anticipated cuts in the US, or to maintain them at current levels. Analysts' consensus is for a 25bp cut in interest rates, to 4.00 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_proc_EBC_6.09.png" alt="ECB interest rate graph" /> Source: Tradingeconomics.com A higher-than-expected interest rate could be bullish for the EUR, while a lower-than-expected interest rate could act bearishly on the EUR. Impact: EUR/USD, EUR/PLN   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79,03% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 06 Sep 2024 13:06:00 +0200The US bond yield curve, which had been inverted for the past two years, had returned to normal. This meant that short-term bonds offered higher yields than long-term bonds, which was counterintuitive. Historically, an inversion of this curve has always...Next week to watch (2-6.09.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-2-6-09-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-2-6-09-2024Nvidia, the leader in artificial intelligence, delivers record financial results in Q2 2024, with net profit up 168 per cent year-on-year. Despite this, the share price is down 6 per cent, suggesting that high investor expectations are triggering a reaction along the lines of ‘buy the rumours, sell the facts’. Although the current valuation of the stock seems appropriate, the market has reacted with a discount that may be a correction of earlier expectations. The company continues to cement its solidity, highlighted by an increase in its share buyback programme. The decline in Nvidia shares did not have a significant impact on the major indices. The US S&P 500 ended the week up 0.4 per cent, while the technology Nasdaq 100 fell 0.9 per cent. With each week, we move closer to historic highs. In the coming week, we will learn about interest rate decisions in Poland and Canada. However, investors' special attention is directed towards Friday's Eurozone GDP reading for the second quarter of this year and the US unemployment rate data. In particular, statistics from the US labour market could be crucial for currency quotations. After all, the latest reading crossed the threshold that has often heralded the onset of a recession, as evidenced by data from the past 50 years.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Interest rate decision in Poland</a></li> <li><a href="#heading-scroll2">Interest rate decision in Canada</a></li> <li><a href="#heading-scroll3">Eurozone gross domestic product (GDP) quarterly (Q2).</a></li> <li><a href="#heading-scroll4">US unemployment rate (August)</a></li> </ol> <h2 id="heading-scroll1">Wednesday, 4.09, 15:00 CET, interest rate decision in Poland</h2> The National Bank of Poland kept interest rates unchanged at 5.75 per cent for the ninth consecutive meeting in July. In August, the inflation rate rose to 4.3 per cent, exceeding the inflation target, which is in the range of 1.5-3.5 per cent. As a result, NBP President Adam Glapinski rejected the possibility of interest rate cuts this year. Analysts' consensus is for no change in NBP interest rates. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_PL_30.08.png" alt="Rate graph EN" /> Source: Tradingeconomics.com A higher-than-expected interest rate could be bullish for the PLN, while a lower-than-expected interest rate could act bearishly on the PLN. Impact: EUR/PLN, USD/PLN, GBP/PLN <h2 id="heading-scroll2">Wednesday, 4.09, 15:45 CET, interest rate decision in Canada</h2> The Bank of Canada began a cycle of interest rate cuts in June, reducing the main rate by 25 bps and then again in July, to 4.5 per cent. The decision follows an oversupply in the economy, which has slowed inflation significantly. The Bank of Canada expects CPI inflation to fall further by the end of the year, and to stabilise at 2 per cent in 2025.  Analysts' consensus is for interest rates to be cut to 4.25 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_Kanada_30.08.png" alt="rate chart Canada" /> Source: Tradingeconomics.com A higher-than-expected interest rate could be bullish for CAD, while a lower-than-expected interest rate could act bearishly on CAD. Impact: USD/CAD, EUR/CAD <h2 id="heading-scroll3">Friday, 6.09, 11:00 CET, Eurozone gross domestic product (GDP) quarterly (Q2).</h2> According to preliminary data, Eurozone GDP grew by 0.6 per cent year-on-year in Q2 2024, the same as in the previous period. Growth was recorded in major economies such as France, Italy and Spain, but also in Belgium, Ireland, Portugal, Lithuania, Cyprus, Slovakia and Finland. In contrast, Germany's economy stalled at 0 per cent, while Latvia and Austria recorded declines. The European Commission forecasts the eurozone economy to grow by 0.8 per cent throughout 2024. Analysts' consensus is for eurozone GDP growth of 0.5 per cent year-on-year. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_EU_30.08.png" alt="EU GDP graph" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR. Impact: EUR/USD, EUR/PLN <h2 id="heading-scroll4">Friday, 6.09, 14:30 CET, US unemployment rate (August)</h2> Investors' fears of a possible recession in the US increased after the unemployment rate rose from 3.7 per cent at the beginning of the year to 4.3 per cent in July. Nevertheless, this level remains historically low for the US economy. However, it is worth bearing in mind the so-called Sahm rule, which indicates that when the unemployment rate rises by more than 0.5 percentage points in 12 months, it often heralds the onset of a recession, as evidenced by data over the past 50 years.  The analysts' consensus, however, is for the unemployment rate to fall to 4.2 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_bezrobocie_USA_30.08.png" alt="graph US unemployment" /> Impact: Tradingeconomics.com A higher-than-expected reading could be bearish for the USD, while a lower-than-expected reading could act bullishly on the USD. Impact: EUR/USD, USD/PLN   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79,03% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 30 Aug 2024 14:21:00 +0200Nvidia, the leader in artificial intelligence, delivers record financial results in Q2 2024, with net profit up 168 per cent year-on-year. Despite this, the share price is down 6 per cent, suggesting that high investor expectations are triggering a reac...Nvidia's record result and investors hold their breath - what's behind the share fall?https://invest.conotoxia.com/investment-research/comments/nvidia-s-record-result-and-investors-hold-their-breath-what-s-behind-the-share-fallhttps://invest.conotoxia.com/investment-research/comments/nvidia-s-record-result-and-investors-hold-their-breath-what-s-behind-the-share-fallNvidia's financial results again exceeded even the most optimistic forecasts. Despite this, the share price in after-hours trading fell by up to 8 per cent. After the opening of trading on the German market, the decline narrowed to 3 per cent. It seems that the very high expectations of investors confirmed the stock market saying: ‘buy the rumours, sell the facts’. No matter how good the company's results and forecasts would have been, the market could have reacted with a discount. Therefore, let's take a look at what is behind the decline in Nvidia shares?<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">What has happened on the markets?</a></li> <li><a href="#heading-scroll2">Is Nvidia overvalued?</a></li> </ol> <h2 id="heading-scroll1">What has happened on the markets?</h2> The fall in the shares of a key AI technology player caused Nasdaq 100 index contracts to fall by more than 1 per cent and most large technology companies to be discounted. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Nvidia_30.08.png" alt="Nvidia chart" /> Source: Conotoxia MT5, NVIDIA, Daily In Q2 2024, the company reported record revenues of $30 billion, up 122 per cent year-on-year. Net profit grew 168 per cent year-on-year, which translated into a net profit margin of as much as 55 per cent. The biggest sales growth came from the data centre segment, driven by demand for the Hopper GPU platform used in AI applications. The company plans to introduce the new Blackwell architecture in Q4 this year, which may have worried markets hoping for an earlier deployment. <h2 id="heading-scroll2">Is Nvidia overvalued?</h2> From a fundamentals perspective, the current share price assumes an average annual improvement in financial performance of around 40 per cent over the next 10 years. The company is growing in line with these assumptions, although it may experience a slowdown in earnings growth in the future. Based on these assumptions, the company's current valuation appears neither overvalued nor undervalued. Noteworthy is the significant increase in the distribution of earnings to shareholders, particularly through the share buyback programme, which has been extended by an additional $50bn, up from the previous $7.4bn. Conotoxia Ltd. believes that the current market discount can only be a correction of earlier expectations, as Nvidia fundamentally still looks solid. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/tabela_wycena_Nvidii_ENG_30.08.png" alt="Nvidia valuation table" /> Source: Conotoxia's own analysis   Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79,03% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 30 Aug 2024 09:13:00 +0200Nvidia's financial results again exceeded even the most optimistic forecasts. Despite this, the share price in after-hours trading fell by up to 8 per cent. After the opening of trading on the German market, the decline narrowed to 3 per cent. It seems ...These Smart Beta ETFs have been beating the broad market for many years!https://invest.conotoxia.com/investment-research/comments/these-smart-beta-etfs-have-been-beating-the-broad-market-for-many-yearshttps://invest.conotoxia.com/investment-research/comments/these-smart-beta-etfs-have-been-beating-the-broad-market-for-many-yearsSmart Beta ETFs are a type of fund that combines features of traditional passively managed ETFs with elements of active management strategies. Unlike classic ETFs, which replicate popular market indices , Smart Beta ETFs seek to outperform the market by selecting stocks according to specific rules, known as ‘smart beta’, while keeping management costs low. Let's take a look at the best of these, which have beaten broad indices in past years.<h3>Table of contnets:</h3> <ol> <li><a href="#heading-scroll1">Invesco S&P 500 Momentum ETF</a></li> <li><a href="#heading-scroll2">Invesco Energy Exploration & Production ETF</a></li> <li><a href="#heading-scroll3">iShares Russell Top 200 Growth ETF</a></li> <li><a href="#heading-scroll4">First Trust RBA American Industrial Renaissance ETF</a></li> <li><a href="#heading-scroll5">iShares Semiconductor ETF</a></li> </ol> <h2 id="heading-scroll1">Invesco S&P 500 Momentum ETF</h2> <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Momentum_ETF_28.08.png" alt="chart Invesco S&P 500 Momentum ETF" /> Source: Tradingview The first is the interestingly structured Invesco S&P 500 Momentum ETF, based on a momentum strategy. The fund twice a year increases the share of stocks from the S&P 500 index that are trending upwards and decreases their share when they start to fall. This has allowed it to achieve a return of 134 per cent over five years, compared to 91 per cent for the S&P 500 index alone, while maintaining a management cost of just 0.13 per cent.  <h2 id="heading-scroll2">Invesco Energy Exploration & Production ETF</h2> <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Exploration_Production_ETF_28.08.png" alt="chart Invesco Energy Exploration & Production ETF" /> Source: Tradingview The other fund beating the broad market, with a 146 per cent return over the past five years, is the Invesco Energy Exploration & Production ETF. It focuses on investing in companies in the US energy sector, mainly those involved in the exploration, production and processing of energy commodities such as oil and natural gas. This fund has continued to increase in value despite the fact that the price of oil has risen by 43 per cent over these five years. <h2 id="heading-scroll3">iShares Russell Top 200 Growth ETF</h2> <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Russe_Growth_ETF_28.08.png" alt="chart iShares Russell Top 200 Growth ETF" /> Source: Tradingview A third fund that regularly outperforms the broad market is the iShares Russell Top 200 Growth ETF, which has delivered a total return of 157 per cent over the past five years. The fund invests in shares of US companies with large market capitalisations that stand out for their above-average earnings growth forecast potential over the coming years. <h2 id="heading-scroll4">First Trust RBA American Industrial Renaissance ETF</h2> <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Industrial_Renaissance_ETF_28.08.png" alt="chart First Trust RBA American Industrial Renaissance ETF" /> Source: Tradingview Another more concentrated fund that has outperformed the major indices over the years is the First Trust RBA American Industrial Renaissance ETF, with a return of 182 per cent over the past five years. The fund invests in shares of companies in the US industrial sector, covering manufacturing, construction, transportation, industrial technology and industrial services. The success of this fund can be attributed to the fact that all companies included in the index must have a positive analyst consensus earnings forecast. Otherwise, they are excluded. This allows the index to naturally and quickly purge itself of less promising assets. An additional advantage of the fund is that the companies held appear to be relatively cheap, with a price-to-earnings (P/E) ratio of 18.7, compared to 29 for the S&P 500 index. <h2 id="heading-scroll5">iShares Semiconductor ETF</h2> <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Semiconductor_ETF_28.08.png" alt="chart iShares Semiconductor ETF" /> Source: Tradingview An impressive return of more than 200 per cent over the past five years has been achieved by the iShares Semiconductor ETF. This fund offers exposure to semiconductor companies. The dynamic growth in this case can be attributed to the developing artificial intelligence technology, which relies heavily on semiconductors, graphics cards and processors. However, it is worth bearing in mind that this fund is focused on a single sector, which means that it does not benefit from sector diversification. As a result, it is 60 per cent more volatile than the broad market. However, the dynamic development of artificial intelligence technology and the investments announced by major technology giants in data centres and AI development may continue to support the earnings growth of semiconductor companies.   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79,03% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comWed, 28 Aug 2024 15:22:00 +0200Smart Beta ETFs are a type of fund that combines features of traditional passively managed ETFs with elements of active management strategies. Unlike classic ETFs, which replicate popular market indices (such as the S&P 500), Smart Beta ETFs seek to out...Investing in the face of crisis: how to protect yourself, what moves to avoid?https://invest.conotoxia.com/investment-research/comments/investing-in-the-face-of-crisis-how-to-protect-yourself-what-moves-to-avoidhttps://invest.conotoxia.com/investment-research/comments/investing-in-the-face-of-crisis-how-to-protect-yourself-what-moves-to-avoidInvesting involves risk, especially when investing in equities and ETFs. Stock market crashes are a natural part of this market, so it is worth being prepared for this eventuality. If we expect falls, we should first determine our investment horizon and understand the value of the assets we hold. If our horizon is less than 12 months or we are unsure about the future of our investments, it is worth considering several scenarios.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Two basic principles of investment</a></li> <li><a href="#heading-scroll2">How to hedge your investment portfolio against risk?</a></li> <li><a href="#heading-scroll3">What to avoid during a crisis?</a></li> </ol> <h2 id="heading-scroll1">Two basic principles of investment</h2> One solution that may come to mind is to sell the investment. However, this should be a last resort, in the words of Warren Buffett: ‘The first rule of investing is don't lose money, and the second rule is don't forget rule number one’. If you do decide to sell, it is worth moving the funds into safer assets, such as government bonds or deposits, to keep them working. <h2 id="heading-scroll2">How to hedge your investment portfolio against risk?</h2> We do not have to sell our shares or funds to hedge against falls. We can use portfolio hedging by using contracts for difference (CFDs) on shares, ETFs or other instruments available from brokers. In this way, we can temporarily hedge the value of the portfolio against market movements. Futures contracts, which were originally used for hedging, are now also used for speculation, offering short-term investments with lower transaction costs and leverage. Hedge funds use them for arbitrage, earning money from differences in valuations, which increases liquidity and market efficiency, although it requires sophisticated systems and large amounts of capital. More sophisticated investors can use options, which give the right (rather than the obligation) to sell at a certain price. However, this requires a fee called a premium and more knowledge, but allows you to hedge against dips while leaving you with the opportunity to profit on rises. <h2 id="heading-scroll3">What to avoid during a crisis?</h2> Perhaps the worst decision is to sell an investment simply because it has fallen in value. It is worth remembering the difference between investing and speculation. We invest in assets whose intrinsic value is higher than the market. Speculation, on the other hand, is based on anticipating short-term price movements, driven by massive market behaviour.   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79,03% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comTue, 27 Aug 2024 12:43:00 +0200Investing involves risk, especially when investing in equities and ETFs. Stock market crashes are a natural part of this market, so it is worth being prepared for this eventuality. If we expect falls, we should first determine our investment horizon and...Next week to watch (26-30.08.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-26-30-08-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-26-30-08-2024The main US S&P 500 index has returned to near its historic highs. In contrast, Japan's Nikkei 225 index, which was hit hard during ‘Black Monday’, has gained more than 23 per cent from its low in just two weeks. This may suggest that investors have returned to ‘Risk ON’ mode and have started buying risky assets again, including cryptocurrencies, among others. The NBP increased its purchases of gold, becoming the largest buyer globally in the second quarter of this year. Gold has gained 21 per cent since the start of the year, outperforming many key assets. The rise in bullion prices is mainly driven by central bank purchases, which are hedging against a possible recession and geopolitical uncertainty. The coming week will see final Q2 GDP data for Germany, the US and Poland, which will help assess the risk of a global recession. The week will conclude with Eurozone inflation data for August. These may influence the pace of interest rate cuts by the ECB.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Germany's gross domestic product (GDP) by quarter (Q2)</a></li> <li><a href="#heading-scroll2">Poland's gross domestic product (GDP) in quarterly terms (Q2)</a></li> <li><a href="#heading-scroll3">US gross domestic product (GDP) by quarter (Q2)</a></li> <li><a href="#heading-scroll4">Eurozone consumer price index (CPI) annualised (August)</a></li> </ol> <h2 id="heading-scroll1">Tuesday, 27.08, 8:00 a.m. CET, Germany's gross domestic product (GDP) by quarter (Q2)</h2> Preliminary data show that the German economy unexpectedly contracted by 0.1 per cent (q/q) in the second quarter of 2024. The decline is mainly due to lower domestic investment, influenced by high interest rates. On an annual basis, the economy also contracted by 0.1 per cent, marking the fifth consecutive quarter without growth. The European Commission forecasts that the German economy will grow by 0.1 per cent in 2024, although investment and exports will remain low.  Analysts' consensus forecasts a 0.1 per cent fall in GDP in the second quarter. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB)niemiec_23.08.png" alt="graph of German GDP" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR. Impact: EUR/USD, EUR/PLN <h2 id="heading-scroll2">Thursday, 29.08, 10:00 CET, Poland's gross domestic product (GDP) in quarterly terms (Q2)</h2> Preliminary data show that in the second quarter of 2024, non-seasonally adjusted GDP grew by 3.2 per cent in real terms year-on-year, compared to a decline of 0.6 per cent in the corresponding period of 2023. This is the fourth consecutive quarter of GDP growth, indicating that the Polish economy, despite a noticeable slowdown in Europe, continues to develop dynamically.  Analysts' consensus is to confirm Poland's GDP growth at 3.2 per cent year-on-year. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_PL_23.08.png" alt="graph of Poland's GDP" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the PLN, while a lower-than-expected reading could act bearishly on the PLN. Impact: EUR/PLN, USD/PLN <h2 id="heading-scroll3">Thursday, 29.08, 14:30 CET, US gross domestic product (GDP) by quarter (Q2)</h2> The US economy grew by 2.8 per cent in Q2 2024, beating forecasts and the Q1 result (1.4 per cent). Consumer spending grew, especially on cars and fuel, although spending on services slowed somewhat. Business investment increased, but residential investment declined. Government increased spending, mainly on defence. However, international trade held back growth as imports grew faster than exports. Analysts' consensus is for US GDP growth to remain at 2.8 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_USA_23.08.png" alt="graph of US GDP" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD. Impact: EUR/USD, USD/PLN <h2 id="heading-scroll4">Friday, 30.08, 11:00 CET, Eurozone consumer price index (CPI) annualised (August)</h2> Annual inflation in the euro area rose to 2.6 per cent in July 2024 from 2.5 per cent in June, beating market expectations. Energy costs rose sharply, while inflation in industrial goods remained stable. However, food, alcohol and tobacco inflation declined. Among the zone's largest economies, inflation was highest in France (2.7 per cent) and Germany (2.6 per cent) and lowest in Italy (1.6 per cent). Analysts' consensus is for CPI inflation in the euro area to fall to 2.3 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_UE_23.08.png" alt="EU inflation graph" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR. Impact: EUR/USD, EUR/PLN   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79,03% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 23 Aug 2024 13:56:00 +0200The main US S&P 500 index has returned to near its historic highs. In contrast, Japan's Nikkei 225 index, which was hit hard during ‘Black Monday’, has gained more than 23 per cent from its low in just two weeks. This may suggest that investors have ret...Poland is the largest buyer of gold in the world! Is it currently a good investment?https://invest.conotoxia.com/investment-research/comments/poland-is-the-largest-buyer-of-gold-in-the-world-is-it-currently-a-good-investmenthttps://invest.conotoxia.com/investment-research/comments/poland-is-the-largest-buyer-of-gold-in-the-world-is-it-currently-a-good-investmentThe National Bank of Poland purchased 18.7 tonnes of gold in the second quarter of this year, becoming the largest buyer in the world ahead of India and Turkey. During this time, the price of the king of metals exceeded the record level of $2,500 per ounce. The NBP also announced investments in corporate bonds and foreign equities through ETF funds, which may indicate a move to diversify reserves and increase their yield.<h3>Table of contents:</h3> <ol> <ol> <li><a href="#heading-scroll1">This is not the end of gold shopping!</a></li> <li><a href="#heading-scroll2">Is this the end of the rises in gold?</a></li> </ol> </ol> <h2 id="heading-scroll1">This is not the end of gold shopping!</h2> Demand for this bullion from central banks may continue. This is evidenced, among other things, by the announcement of the President of the National Bank of Poland, Adam Glapinski: ‘We will continue to buy gold. We dream of reaching a 20 percent share of gold in our reserves'. At present, the share of bullion in the NBP's reserves is 14.7 percent and continues to grow. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_rezerwy_z%C5%82ota_NBP_22.08.png" alt="chart of the NBP gold reserve" /> Source: Conotoxia own study, NBP data At the end of the second quarter of this year, Poland's gold reserves rose to 377.4 tonnes, and the pace of purchases of the bullion, held mainly in London, at the Bank of England, since April this year has surpassed even the world's largest economies. According to the World Gold Council, Poland was the world leader in Q2 this year alone, buying 18.7 tonnes of gold. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_zakupy_w_IIIkw_22.08.png" alt="gold purchases in the second quarter" /> Source: WGC In Q2 2024, global gold demand, excluding over-the-counter (OTC) investments, fell by 6 percent y/y to 929 tonnes. The decline is mainly due to a 19 percent reduction in jewellery consumption, in response to record high prices for the king of metals. However, including OTC investments, total gold demand increased by 4 percent y/y to reach 1,258 tonnes, the highest level since 2000. Much of this demand was generated by central banks, which increased their purchases by 6 percent, adding 183 tonnes, mainly to protect and diversify their portfolios. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_zakupy_z%C5%82ota_22.08.png" alt="chart of gold purchases" /> Source: WGC <h2 id="heading-scroll2">Is this the end of the rises in gold?</h2> The gold market, like many others, is driven by two forces: demand and supply. In the past few quarters, an increase in demand has been particularly evident. Investors and central banks are keen to buy gold because it is seen as a safe haven, especially during periods of economic and geopolitical uncertainty. Moreover, the continued weakening of the dollar may indicate that gold could outperform other key assets in the near term. Conotoxia Ltd.'s baseline scenario assumes that gold price momentum could slow down by the end of the year, with a possible correction, but is likely to remain above the $2,500 per ounce level. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_cena_z%C5%82ota_22.08.png" alt="chart gold price" /> Source: Conotoxia MT5, XAUUSD, Daily   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79,03% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comThu, 22 Aug 2024 13:18:00 +0200The National Bank of Poland purchased 18.7 tonnes of gold in the second quarter of this year, becoming the largest buyer in the world ahead of India and Turkey. During this time, the price of the king of metals exceeded the record level of $2,500 per ou...Superinvestors, including Warren Buffett and Michael Burry, sell off shares!https://invest.conotoxia.com/investment-research/comments/superinvestors-including-warren-buffett-and-michael-burry-sell-off-shareshttps://invest.conotoxia.com/investment-research/comments/superinvestors-including-warren-buffett-and-michael-burry-sell-off-sharesWe have now received virtually all of the Q2 13F reports from superinvestors managing capital in excess of $100m. These documents reveal transactions by major players in the US market.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Superinvestors on the stock exchanges: much more sold than bought</a></li> <li><a href="#heading-scroll2">Buffett like Scrooge McDuck is currently sitting on a huge amount of cash</a></li> <li><a href="#heading-scroll3">Michael Burry and the rising bet on China</a></li> <li><a href="#heading-scroll4">Conclusions</a></li> </ol> <h2 id="heading-scroll4">Superinvestors on the stock exchanges: much more sold than bought</h2> Despite robust market gains in Q2 2024, many super investors sold off stocks rather than buying them. The largest sell-offs were in stocks from the financial, consumer goods and technology sectors. In contrast, the largest purchases were focused on companies in the industrials, basic goods and healthcare sectors, which seems to indicate a defensive approach by investors. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_zakupy_superinwestor%C3%B3w_20.08.png" alt="chart of superinvestor purchases" /> Source: Dataroma The most popular stock was Warren Buffett's Berkshire Hathaway fund, which attracted 9 super investors. In second place was healthcare company United Health Group, which gained 8 investors. Despite the general defensiveness towards the technology sector, the third most popular company was technology giant Microsoft. <h2 id="heading-scroll2">Buffett like Scrooge McDuck is currently sitting on a huge amount of cash</h2> The biggest changes have taken place at Berkshire Hathaway. Warren Buffett sold almost half of his largest investment, Apple. This sale led to a record level of cash and short-term bonds of $276.9 billion. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_BerkshireHa_20.08.png" alt="Berkshire Hathaway chart" /> Source: Conotoxia MT5, BerkshireHa, Daily Buffett focused on selling off shares in Q2, completely divesting Snowflake and Paramount Global and reducing positions in Chevron. It seems that the high level of safety has led to Warren Buffett's shares already breaking through their historic peaks after ‘Black Monday’. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/tabela_portfel_buffetta_20.08.png" alt="Buffett's portfolio table" /> Source: Dataroma <h2 id="heading-scroll3">Michael Burry and the rising bet on China</h2> Michael Burry, known for predicting the 2008 financial crisis, has increased his investments in Chinese companies Baidu and Alibaba. At the end of Q2, US-listed Chinese stocks accounted for as much as 45.9 per cent of his total investments. His portfolio underwent significant changes. He sold off all the gold he had purchased a quarter earlier, and disposed of transport, oil and financial companies. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Baidu_20.08.png" alt="Baidu chart" /> Source: Conotoxia MT5, Baidu, Daily New investments include Shift4 Payments, a payment solutions company, Molina Healthcare, a provider of healthcare services in the Medicaid and Medicare programmes, and Hudson Pacific Properties, a company that manages commercial real estate, including office buildings and film studios. The value of his equity portfolio halved from the first quarter, which may suggest that Burry, like Buffett, is betting on liquid capital and high interest income. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/tabela_Burry_20.08.png" alt="Burr's portfolio table" /> Source: Dataroma <h2 id="heading-scroll1">Conclusions</h2> It seems that super investors currently approach today's market realities with a great deal of detachment. It is difficult to look for, for example, the pursuit of the artificial intelligence companies so popular today in their investment decisions. It is more likely to be interpreted as an increase in concern and asset protection.   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79,03% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comTue, 20 Aug 2024 12:42:00 +0200We have now received virtually all of the Q2 13F reports from superinvestors managing capital in excess of $100m. These documents reveal transactions by major players in the US market.Next week to watch (19-23.08.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-19-23-08-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-19-23-08-2024The S&P 500 Index has already rebounded by more than 8 per cent from the bottom reached during ‘Black Monday’ and is now just 2.2 per cent below historic highs. A similar situation is taking place on almost all domestic indices, especially the Japanese Nikkei 225, which has gained more than 22 per cent since the peak of the panic. In order to better understand the current situation and assess whether we are in a recession, let us summarise the most important macroeconomic data from the United States. US GDP grew by 2.8 per cent in the second quarter. The disinflation process continues, although inflation remains above target. Unemployment rose from 3.5 per cent to 4.3 per cent, but is still lower than in most years of rapid growth. Despite the rise in unemployment, there was no increase in new unemployment benefits or a decline in job openings, which may indicate sectoral turnover among workers. Most companies reported an increase in second-quarter earnings, with as many as 75 per cent beating analysts' expectations. PMI leading indicators point to continued growth in the services sector and a slowdown in the industrial sector. Consequently, the current market discount may reflect a worst-case scenario for which we do not yet have confirmation in the data. Even the most sceptical investment bank JP Morgan forecasts the probability of a recession at 35 per cent by the end of this year and 45 per cent by the end of 2025. In the coming week, macroeconomic data releases will start on Tuesday with the July inflation reading in the euro area. On Wednesday, we will learn details of the discussion from the latest meeting of the Federal Open Market Committee , responsible for setting interest rate levels in the United States. We will end the week with a confirmation of expectations for the future situation in the US industrial sector, the PMI reading.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Eurozone consumer price index (CPI) annualised (July)</a></li> <li><a href="#heading-scroll2">FOMC meeting minutes</a></li> <li><a href="#heading-scroll3">US manufacturing leading indicators (PMIs) for August</a></li> </ol> <h2 id="heading-scroll1">Tuesday, 20.08, 11:00 CET, Eurozone consumer price index (CPI) annualised (July)</h2> Inflation in the euro area rose to 2.6 per cent in July 2024 from 2.5 per cent in June, contrary to forecasts of a fall. Energy prices rose significantly and non-energy industrial goods prices also rose faster. However, inflation slowed in services and in the food, alcohol and tobacco categories. Among the largest euro area economies, inflation rose in Germany, France and Italy, but fell in Spain. Analysts' forecast is for CPI inflation to rise to 2.6 per cent. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_EU_16.08.png" alt="EU inflation graph" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR. Impact: EUR/USD, EUR/PLN <h2 id="heading-scroll2">Wednesday, 21.08, 20:00 CET, FOMC meeting minutes</h2> At the last FOMC meeting in June, among other things, the market's outlook was discussed, which at that time was still anticipating one possible 25 basis point interest rate cut by the end of the year. Now, following poorer labour market data, these expectations have changed dramatically, rising to three cuts of at least 25 basis points each. Resident FOMC members expect the Federal Reserve's balance sheet reduction to end around April 2025, which could have a positive impact on financial markets. However, the US economy continues to grow at a solid pace. Consumer inflation has declined from last year, but progress towards the 2 per cent inflation target is slow. A more hawkish tone to the latest minutes could have a bullish impact on the USD, while a more dovish tone could be bearish for the USD. Impact: EUR/USD, USD/PLN <h2 id="heading-scroll3">Thursday, 22.08, 14:30 CET, US manufacturing leading indicators (PMIs) for August</h2> One of the factors that triggered the discount on ‘Black Monday’ was the much worse-than-expected results from the US manufacturing leading indicator, the ISM. On Thursday, we will learn the readings of its counterpart from another agency, which will confirm or deny the expected weakening of manufacturing in the coming quarters. The last PMI reading of 49.6 (50 being the cut-off) spoke of a slowdown in this sector of the economy. When the similarly constructed ISM index fell to 46.8 against expectations of 48.8. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PMI_USA_16.08.png" alt="US industry PMI chart" /> Source: Tradingeconomics.com A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD. Impact: EUR/USD, USD/PLN   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79,03% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 16 Aug 2024 12:48:00 +0200The S&P 500 Index has already rebounded by more than 8 per cent from the bottom reached during ‘Black Monday’ and is now just 2.2 per cent below historic highs. A similar situation is taking place on almost all domestic indices, especially the Japanese ...Starbucks stock jumps – should investors jump with it? https://invest.conotoxia.com/investment-research/research-articles/starbucks-stock-jumps-should-investors-jump-with-ithttps://invest.conotoxia.com/investment-research/research-articles/starbucks-stock-jumps-should-investors-jump-with-itStarbucks stock skyrocketed 18% at the market opening on Tuesday, 13/08, and added another 6% during the day, leading to the most significant one-day stock price increase since Starbucks became a publicly traded company in 1992. This happened because the Company announced that its current CEO is stepping down from his position, and Brian Niccol will take over on September 9th. Who is Brian Niccol, and will he solve all of Starbucks's problems? Starbucks stocks have been struggling since April 2023, when lowered consumer discretionary spending in the US led to weak demand and dispirited investors. Before yesterday's jump, Starbucks stock had lost 36% of its value over that period. <h3>Table of contents:</h3> <ol> <ol> <li><a href="#heading-scroll1">Consumers cutting on discretionary spending</a></li> <li><a href="#heading-scroll2">The whole discretionary sector suffering</a></li> <li><a href="#heading-scroll3">The new Starbucks CEO, Brian Niccol</a></li> <li><a href="#heading-scroll4">Should you jump on the “Starbucks train”?</a></li> <li><a href="#heading-scroll5">Conclusion</a></li> </ol> </ol> <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Starbucks_14.08.png" alt="Starbucks chart" /> Source: Tradingview.com <h2 id="heading-scroll1">Consumers cutting on discretionary spending</h2> Consumers may be limiting their afternoon pick-me-up cup of coffee (or at least making it on their own), expressing their fatigue from the ever-growing prices.  The latest quarter sales ending on June 2024 continued disappointing Starbucks' investors, although not as much as feared. While lower than a year ago, the key financial data came out better than investors expected. The Company reported the adjusted EPS at 0.93 USD versus the expected 0.92 USD, leading to a 6% boost in the stock price. However, the hype was short-lived, and the stock price fell back to its pre-earnings level in 2 days. More company-specific data also showed challenges in its home market, the US. In the latest quarter, same-store sales declined by 2%, and foot traffic dropped by 6%.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/tabela_ENG_Q3_14.08.png" alt="Q3 table" /> Source: Starbucks financial statements According to analysts, Starbucks' challenges may be linked to broader cyclical macroeconomic factors and may lead to weaker sales in most of fiscal 2024. The 2024 forecasts have already been adjusted for the third time this year. The Company reported anticipated global revenue growth in the low single digits for 2024, a reduction from the earlier projection of 7% to 10%, which was previously cut from an original estimate of 10% to 12%. Starbucks sales have declined not only in the US but also in its second-largest market, China, which is experiencing the most significant decline among all regions. Same-store sales dropped by 14% compared to the last quarter, which had already seen an 11% decrease. Both foot traffic and average transaction value in China fell by 7%. The Company has attributed this downturn to higher consumer caution along with increased competition over the past year. <h2 id="heading-scroll2">The whole discretionary sector suffering</h2> Starbucks is not the only discretionary Company affected by the cautioned spending habits. Discretionary stocks have underperformed the overall S&P500 index by 15 percentage points or more than 3 times in the last 12 months (+21.74% for the S&P500 versus +6.72% for the S&P500 Consumer Discretionary sector). Meanwhile, the difference between the year-to-date performance of both indices is even larger: +13.93% for the S&P500 versus +0.73% for the S&P500 Consumer Discretionary sector.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_S%26P500_14.08.png" alt="S&P 500 chart" /> Source: S&Pglobal.com <h2 id="heading-scroll3">The new Starbucks CEO, Brian Niccol</h2> Activist investor Elliott Investment Management has been pressuring Starbucks to make some changes amid falling sales. Brian Niccol may be one of the changes the activist investor had in mind. Until now, Brian Niccol was the CEO of Chipotle, previously holding a leadership position at Taco Bell. Under his stewardship, Chipotle's stock price increased by an impressive 773%. He played a key role in helping the chain recover from a foodborne illness crisis and successfully guided the restaurants during the pandemic. Recently, while many other restaurants faced a significant decline in consumer spending, Chipotle has experienced growth in traffic and sales, defying the overall trend. One of Chipotle's key advantages during Niccol's leadership has been its mobile app, which has significantly contributed to the Company's robust performance in recent quarters. In contrast, Starbucks' app has been criticized for its disappointing results. Starbucks' former CEO, Howard Schultz, and other critics of Starbucks have highlighted the excessive number of mobile orders leading to delayed service and a negative impact on the customer experience. <h2 id="heading-scroll4">Should you jump on the “Starbucks train”?</h2> Starbucks' stock price jump indicated that investors may believe in Brian Niccol and his power to turn around the Company's recent distress. Combined with his success in growing Chipotle's stock price up 773%, investors may be inclined to jump on the "Starbucks train of success" while its stock is still trading below 100 USD.  While it was certainly nice to wake up at the stock up around 20% on Tuesday morning for those investors already owning Starbucks stocks, let us look at the critical valuation figures to understand whether it would still be reasonable to purchase them now.  As Starbucks stock depreciated over the last year, its valuation multiples were lower than the average multiples of the S&P500 Consumer discretionary companies, suggesting a certain attractiveness. However, after the most recent jump, Starbucks stocks no longer look as attractive. Both Price-to-Earnings and Price-to-Sales ratios are now just above the sector average numbers.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/tabela_ENG_wska%C5%BAniki_14.08.png" alt="table indicators" /> Source: finance.yahoo.com, eqvista.com, author calculations Another valuation multiple, Price-to-Book value, was not calculated as the Company has accumulated large amounts of debt, leading to a book value of -8 billion USD and negative shareholders' equity. The massive debt may also be a reason to think twice before investing in Starbucks. Furthermore, more often than not, such gaps in stock and other financial instrument prices tend to close over time, meaning that once the initial hype around the new CEO settles, Starbucks' stock price may lower to previous levels.  <h2 id="heading-scroll5">Conclusion</h2> Brian Niccol may just be the breath of fresh air Starbucks needs after changing the CEO for the fourth time in two years. His previous achievements in similar consumer discretionary companies suggest that Starbucks may soon experience positive changes, including growth in its stock price. However, Starbucks operates in a relatively saturated market with numerous lower-cost competitors and consumers looking to skip another cup of overpriced coffee. Furthermore, Niccol may be facing different challenges with Starbucks as it has a more complicated structure and much more international presence than Chipotle. It may be interesting to watch whether the new CEO will try to lower the amount of debt obtained by Starbucks in the past; however, for now, the negative book value might be a reason for some investors to decide not to invest in Starbucks shares.  Furthermore, the Company still needs to stop its decreasing sales and profitability ratios to improve its attractiveness among investors. Until that happens, a new CEO may not be a good enough reason to decide on investing in a company that just became 24% more expensive to own.  Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79.03% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. <div id="gtx-trans" style="position: absolute; left: -34px; top: 4036.17px;"> <div class="gtx-trans-icon"> </div> </div>forex conotoxia.comWed, 14 Aug 2024 16:36:00 +0200Starbucks stock skyrocketed 18% at the market opening on Tuesday, 13/08, and added another 6% during the day, leading to the most significant one-day stock price increase since Starbucks became a publicly traded company in 1992. This happened because th...