Forex conotoxia.com - RSShttps://invest.conotoxia.comNowości z internetowego kantoru Cinkciarz.plen-usforex conotoxia.compagcom_pagfoo-znaki_towarowe 2024pagcom_pagfoo-rNowości z internetowego kantoru Cinkciarz.plForex conotoxia.comnoCinkciarz.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 (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><strong>Table of contents:</strong></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"><strong>Wednesday, 27.11, 14:30 CET, US gross domestic product (GDP) quarterly (Q3)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts forecast a confirmation of the US GDP growth reading of 2.8 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_USA_22.11.png" alt="graph of US GDP" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN, US500</strong></p>
<h2 id="heading-scroll2"><strong>Wednesday, 27.11, 16:00 CET, US personal consumption expenditures (PCE) monthly price index (October)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts predict that PCE inflation will rise slightly in October, reaching 2.2 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PCE_USA_22.11.png" alt="PCE inflation graph" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN</strong></p>
<h2 id="heading-scroll3"><strong>Friday, 29.11, 11:00 CET, Eurozone consumer price index (CPI) monthly (November)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts forecast a rebound in EUR area CPI inflation, to 2.3 per cent in November.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_CPI_EU_22.11.png" alt="EU CPI inflation graph" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR.</span></p>
<p><strong>Impact: EUR/USD, EUR/PLN</strong></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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. </span></em></p>
<p><em><span style="font-weight: 400;">Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.</span></em></p>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"><strong>Tuesday, 19.11, 11:00 CET, Eurozone consumer price index (CPI) monthly (October)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts forecast a confirmation of the euro area CPI inflation reading of 2 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_UE_15.11.png" alt="EU inflation graph" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR.</span></p>
<p><strong>Impact: EUR/USD, EUR/PLN</strong></p>
<h2 id="heading-scroll2"><strong>Wednesday, 20.11, 8:00 CET, UK consumer price index (CPI) monthly (October)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts forecast that October's reading will illustrate another rise in UK CPI inflation to 2 per cent. </span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_UK_15.11.png" alt="UK inflation graph" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for GBP, while a lower-than-expected reading could act bearishly on GBP.</span></p>
<p><strong>Impact: EUR/GBP, USD/GBP, GBP/PLN</strong></p>
<h2 id="heading-scroll3"><strong>Friday, 22.11, 8:00 CET, Germany's gross domestic product (GDP) quarterly (Q3)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts forecast Germany's GDP growth rate to remain at 0.2 per cent qoq.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Niemcy_PKB_15.11.png" alt="graph of German GDP" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR.</span></p>
<p><strong>Impact: EUR/USD, EUR/PLN</strong></p>
<p><br /><br /></p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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. </span></em></p>
<p><em><span style="font-weight: 400;">Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.</span></em></p>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><strong>Table of contents:</strong></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>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_14.11.png" alt="graph of Poland's GDP" /></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics</span></em></p>
<h2 id="heading-scroll1"><strong>Problems faced by the Polish consumer</strong></h2>
<p><span style="font-weight: 400;">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. </span></p>
<p><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" /></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics</span></em></p>
<h2 id="heading-scroll2"><strong>Earnings in Poland continue to rise rapidly</strong></h2>
<p>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.</p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_wynagrodzenia_14.11.png" alt="wage chart" /></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics</span></em></p>
<h2 id="heading-scroll3"><strong>Problems with export</strong></h2>
<p>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.</p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_bilans_p%C5%82atniczy_14.11.png" alt="Current Account graph" /></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics</span></em></p>
<h2 id="heading-scroll4"><strong>Forecasts for USD/PLN and EUR/PLN</strong></h2>
<p><span style="font-weight: 400;">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. </span></p>
<p><span style="font-weight: 400;">The zloty remains stable against the euro, with the EUR/PLN exchange rate oscillating around 4.35. </span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_EURPLN_14.11.png" alt="EURPLN chart" /></span></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, EURPLN, Daily</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_USDPLN_14.11.png" alt="USDPLN chart" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, USDPLN, Daily</span></em></p>
<p><span style="font-weight: 400;">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!</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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 </span></p>
<h2 id="heading-scroll5"><strong>Forecasts for the WIG</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_WIG_14.11.png" alt="WIG chart" /></p>
<p><em><span style="font-weight: 400;">Source: Tradingview</span></em></p>
<p>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.</p>
<p><span style="font-weight: 400;">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.</span></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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. </span></em></p>
<p><em><span style="font-weight: 400;">Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.</span></em></p>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><strong>Table of contents:</strong></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>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_global_X_13.11.png" alt="Global X Uranium ETF chart" /></p>
<p><em><span style="font-weight: 400;">Source: Tradingview</span></em></p>
<h2 id="heading-scroll1"><strong>The future of the uranium market</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_cena_uranu_13.11.png" alt="graph uranium price" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics</span></em></p>
<h2 id="heading-scroll2"><strong>What is driving the uranium price up?</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_wydobycie_uranu_13.11.png" alt="graph uranium mining" /></p>
<p><em><span style="font-weight: 400;">Source: World Nuclear Association</span></em></p>
<h2 id="heading-scroll3"><strong>The nuclear market has stagnated for 20 years!</strong></h2>
<p><span style="font-weight: 400;">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).</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_energia_atomowa_13.11.png" alt="graph nuclear energy production" /></p>
<p><em><span style="font-weight: 400;">Source: World Nuclear Association</span></em></p>
<h2 id="heading-scroll4"><strong>The average age of power plants has exceeded 30 years!</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_wiek_elektrowni_13.11.png" alt="graph age of nuclear power plant" /></p>
<p><em><span style="font-weight: 400;">Source: World Nuclear Association</span></em></p>
<h2 id="heading-scroll5"><strong>Long-term projections of uranium price developments</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><br /><br /></p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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. </span></em></p>
<p><em><span style="font-weight: 400;">Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.</span></em></p>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><strong>Table of contents:</strong></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"><strong>Tuesday, 12.11, 8:00 CET, German consumer price index (CPI) monthly (October)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts forecast a confirmation of the German CPI inflation reading of 2 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_niemiec_08.11.png" alt="German inflation graph" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR.</span></p>
<p><strong>Impact: EUR/USD, EUR/PLN</strong></p>
<h2 id="heading-scroll2"><strong>Wednesday, 13.11, 14:30 CET, US consumer price index (CPI) monthly (October)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts forecast, another rise in US CPI inflation to 2.6 per cent in October.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_USA_08.11.png" alt="graph US inflation" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN</strong></p>
<h2 id="heading-scroll3"><strong>Thursday, 14.11, 8:00 CET, UK gross domestic product (GDP) quarterly (Q3)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts forecast, a sustained 0.6 per cent year-on-year growth rate in UK GDP.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_UK_08.11.png" alt="UK GDP graph" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for GBP, while a lower-than-expected reading could act bearishly on GBP.</span></p>
<p><strong>Impact: EUR/GBP, GBP/USD, GBP/PLN, UK100</strong></p>
<h2 id="heading-scroll4"><strong>Friday, 15.11, 00:50 CET, Japan's gross domestic product (GDP) quarterly (Q3)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts forecast further stagnation in Japan, with quarterly GDP growth of just 0.2 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_japonii_08.11.png" alt="chart of Japan's GDP" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the JPY, while a lower-than-expected reading could act bearishly on the JPY.</span></p>
<p><strong>Impact: EUR/JPY, USD/JPY, Nikkei225</strong></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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. </span></em></p>
<p><em><span style="font-weight: 400;">Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.</span></em></p>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><strong>Table of contents:</strong></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"><strong>Investment success does not come from buying the good stuff....</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_luxury_index_05.11.png" alt="wykres luxury index vs SPX" /></p>
<p><em><span style="font-weight: 400;">Source: TradingView</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<h2 id="heading-scroll2"><strong>High-quality homeware from Williams-Sonoma</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_willSonoma_05.11.png" alt="wykres Williams Sonoma" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, WillSonoma, Daily</span></em></p>
<h2 id="heading-scroll3"><strong>Coach, Kate Spade, or Stuart Weitzman from Tapestry</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_tampestr_05.11.png" alt="Tapestry chart" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, Tapestry, Daily</span></em></p>
<h2 id="heading-scroll4"><strong>Jewellery Kay, Zales and Jared from Signet Jewelers</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><em><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_sygnetJeweler_05.11.png" alt="SignetJewelers chart" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, SignetJewelers, Daily</span></em></p>
<h2 id="heading-scroll5"><strong>Tough situation on Christian Dior's stock price</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;"><em><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Dior_05.11.png" alt="Dior chart" /></em></span></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, Dior, Daily</span></em></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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. </span></em></p>
<p><em><span style="font-weight: 400;">Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.</span></em></p>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><strong>Table of contents:</strong></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"><strong>The power to affect the stock market</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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. </span></p>
<p><span style="font-weight: 400;">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. </span></p>
<h2 id="heading-scroll2"><strong>Democratic administration: sector beneficiaries</strong></h2>
<p><span style="font-weight: 400;">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. </span></p>
<p><span style="font-weight: 400;">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.</span></p>
<h2 id="heading-scroll3"><strong>Republican administration: sector beneficiaries</strong></h2>
<p><span style="font-weight: 400;">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. </span></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<h2 id="heading-scroll4"><strong>Which administration may be “better” for the stock market?</strong></h2>
<p><span style="font-weight: 400;">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).</span></p>
<p><span style="font-weight: 400;">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. </span></p>
<h2 id="heading-scroll5"><strong>Other considerations – budget deficit</strong></h2>
<p><span style="font-weight: 400;">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. </span></p>
<p><span style="font-weight: 400;">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. </span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_deficyt_USA_05.11.png" alt="US Budget Deficit" /></span></p>
<p><em><span style="font-weight: 400;">Source: <a href="https://www.democrats.senate.gov/">https://www.democrats.senate.gov/</a></span></em></p>
<p><span style="font-weight: 400;">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. </span></p>
<p><span style="font-weight: 400;">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. </span></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Invest.conotoxia.com investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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. </span></em></p>
<p><span style="font-weight: 400;">Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.</span></p>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><strong>Table of contents:</strong></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"><strong>Tuesday, 5.11, US presidential election</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_wybory_USA_31.10.png" alt="chart US elections" /></p>
<p><em><span style="font-weight: 400;">Source: RealClearPolitics</span></em></p>
<p><strong>Impact: EUR/USD, USD/PLN, US500</strong></p>
<h2 id="heading-scroll2"><strong>Thursday 7.11, 13:00 CET, UK interest rate decision</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts forecast that the Bank of England will decide to cut the interest rate to 4.75 percent at its next meeting.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_UK_31.10.png" alt="UK interest rate graph" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected interest rate could be bullish for GBP, while a lower-than-expected rate could act bearishly on GBP.</span></p>
<p><strong>Impact: EUR/GBP, GBP/USD</strong></p>
<h2 id="heading-scroll3"><strong>Thursday, 7.11, 19:00 CET, US interest rate decision</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts' consensus is for the main interest rate to fall to 4.75 percent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_USA_31.10.png" alt="US interest rate graph" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected interest rate could be bullish for the USD, while a lower-than-expected rate could act bearishly on the USD.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN</strong></p>
<p><br /><br /></p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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. </span></em></p>
<p><em><span style="font-weight: 400;">Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.</span></em></p>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><strong>Table of contents:</strong></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"><strong>Huge bets on bitcoin price increases above $80k and $100k!</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_opcje_Call_29.10.png" alt="Call option chart for bitcoin" /></p>
<p><em><span style="font-weight: 400;">Source: Coinglas</span></em></p>
<h2 id="heading-scroll2"><strong>The state of the cryptocurrency market</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stablecoiny_29.10.png" alt="chart stablecoin capitalisation" /></p>
<p><em><span style="font-weight: 400;">Source: Defilama</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_BTC_ETF_29.10.png" alt="chart of capital inflows from ETFs" /></p>
<p><em><span style="font-weight: 400;">Source: Farside</span></em></p>
<h2 id="heading-scroll3"><strong>How did bitcoin behave during the recent election?</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><em><span style="font-weight: 400;"><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" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia own analysis</span></em></p>
<h2 id="heading-scroll4"><strong>What bitcoin prices can we expect?</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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. </span></em></p>
<p><em><span style="font-weight: 400;">Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.</span></em></p>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><strong>Table of contents:</strong></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"><strong>Wednesday, 30.10, 11:00 CET, German gross domestic product (GDP) quarterly (Q3)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_Niemcy_25.10.png" alt="GDP chart Germany" /></span></p>
<p><span style="font-weight: 400;">Source: Tradingeconomics</span></p>
<p><span style="font-weight: 400;">A higher than expected reading could be bullish for the EUR, while a lower reading could act bearishly on the EUR.</span></p>
<p><strong>Impact: EUR/USD, EUR/PLN</strong></p>
<h2 id="heading-scroll2"><strong>Wednesday, 30.10, 14:30 CET, US gross domestic product (GDP) quarterly (Q3)</strong></h2>
<p><span style="font-weight: 400;">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. </span></p>
<p><span style="font-weight: 400;">Analysts forecast GDP growth of 3 per cent per annum again in the third quarter of this year.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_USA_25.10.png" alt="graph of US GDP" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN</strong></p>
<h2 id="heading-scroll3"><strong>Friday, 1.11, 14:30 CET, US monthly unemployment rate (October)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts' consensus is for the unemployment rate to remain at 4.1 per cent in October this year.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_bezrobocie_USA_25.10.png" alt="graph US unemployment" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN</strong></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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. </span></em></p>
<p><em><span style="font-weight: 400;">Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.</span></em></p>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><strong>Table of contents:</strong></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"><strong>Javier Milei - what is worth knowing about him?</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<h2 id="heading-scroll2"><strong>What does the market think of Argentina?</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_USDARS_24.10.png" alt="USDARS chart" /></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_MSCI_Argentina_24.10.png" alt="MSCI Argentina chart" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics</span></em></p>
<h2 id="heading-scroll3"><strong>Argentina's economy. Light at the end of the tunnel is visible</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>Percentage of urban households below the poverty line in Argentina</strong></p>
<p><strong><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopa_ub%C3%B3stwa_24.10.png" alt="chart poverty rate" /></strong></p>
<p><em><span style="font-weight: 400;">Source: Statista</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_bilans_hanlowy_24.10.png" alt="chart balance of trade" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics</span></em></p>
<h2 id="heading-scroll4"><strong>What does the IMF see as the future of Argentina's economy?</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_prognozy_MFW_24.10.png" alt="IMF forecast chart" /></p>
<p><em><span style="font-weight: 400;">Source: IMF</span></em></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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. </span></em></p>
<p><em><span style="font-weight: 400;">Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.</span></em></p>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><strong>Table of contents:</strong></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"><strong>Who will win the election? The road to 270</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><em><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_swing_states_22.10.png" alt="map of the swing states" /></span></em><br /><em><span style="font-weight: 400;">Source: U.S. News</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_US_elections_22.10.png" alt="graph probability of electiona" /></p>
<p><em><span style="font-weight: 400;">Source: RealClearPolling</span></em></p>
<h2 id="heading-scroll2"><strong>How will the election affect the price of gold?</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>Change in the price of gold in Q4 of the election year</strong></p>
<p><em><span style="font-weight: 400;"><strong><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" /></strong></span></em></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia own analysis</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>Change in gold price six months before and after the election (election day = 100)</strong></p>
<p><strong><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" /></strong></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia own analysis</span></em></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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. </span></em></p>
<p><em><span style="font-weight: 400;">Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.</span></em></p>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><strong>Table of contents:</strong></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"><strong>Wednesday, 23.10, 15:45 CET, Canada's interest rate decision</strong></h2>
<p><span style="font-weight: 400;">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. </span></p>
<p><span style="font-weight: 400;">Analysts' consensus is for another 50bp cut in interest rates in Canada, to 3.75 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_Kanady_18.10.png" alt="Interest rate chart Canada" /></span></p>
<p><span style="font-weight: 400;">Source: Tradingeconomics</span></p>
<p><span style="font-weight: 400;">A higher-than-expected interest rate could be bullish for CAD, while a lower-than-expected rate could act bearishly on CAD.</span></p>
<p><strong>Impact: USD/CAD, EUR/CAD</strong></p>
<h2 id="heading-scroll2"><strong>Thursday, 24.10, 15:45 CET, US economic leading indicators (S&P Global PMI) monthly (October)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">There is currently no established consensus on the latest PMI reading.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PMI_us%C5%82ug_18.10.png" alt="PMI Services graph" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><em><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PMI_Przemys%C5%82u_18.10.png" alt="Manufacturing PMI chart" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN</strong></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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. </span></em></p>
<p><em><span style="font-weight: 400;">Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.</span></em></p>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><strong>Table of contents:</strong></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"><strong>AI development accelerates</strong></h2>
<p><span style="font-weight: 400;">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).</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_TSMC_7nm_17.10.png" alt="TSMC sales graph" /></p>
<p><em><span style="font-weight: 400;">Source: TSMC quarterly report</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_ASML_17.10.png" alt="ASML chart" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, ASML-NL, Daily</span></em></p>
<h2 id="heading-scroll2"><strong>Tough situation for TSMC's competitors</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><em><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_TSMC_17.10.png" alt="TSMC chart" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: Tradingview</span></em></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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. </span></em></p>
<p><em><span style="font-weight: 400;">Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.</span></em></p>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><strong>Table of contents:</strong></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"><strong>OPEC raport </strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_nadprodukcja_ropy_ENG_15.10.png" alt="graph of oil overproduction" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia own study, OPEC data</span></em></p>
<h2 id="heading-scroll2"><strong>Current oil market situation</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_WBRUSD_15.10.png" alt="chart Brent crude oil" /></span><br /><span style="font-weight: 400;">Source: Conotoxia MT5, XBRUSD, Daily</span></p>
<h2 id="heading-scroll3"><strong>Oil price development forecasts</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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. </span></em></p>
<p><em><span style="font-weight: 400;">Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.</span></em></p>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><strong>Table of contents:</strong></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"><strong>Wednesday, 16.10, 8:00 CET, UK consumer price index (CPI) monthly (September)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts' consensus is for UK CPI inflation to remain further down at 2.2 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_UK_11.10.png" alt="UK inflation graph" /></span></p>
<p><span style="font-weight: 400;">Source: Tradingeconomics</span></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for GBP, while a lower-than-expected reading could act bearishly on GBP.</span></p>
<p><strong>Impact: EUR/GBP, GBP/USD, GBP/PLN</strong></p>
<h2 id="heading-scroll2"><strong>Thursday, 17.10, 11:00 CET, Eurozone consumer price index (CPI) monthly (September)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts' consensus is for CPI inflation in the euro area to remain at 1.8 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wukres_inflacja_EU_11.10.png" alt="EU inflation graph" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR.</span></p>
<p><strong>Impact: EUR/USD, EUR/PLN</strong></p>
<h2 id="heading-scroll3"><strong>Thursday 17.10, 14:15 CET, Eurozone interest rate decision</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts' consensus is for another 25bp interest rate cut.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_EU_11.10.png" alt="EU interest rate graph" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected interest rate could be bullish for the EUR, while a lower-than-expected rate could act bearishly on the EUR.</span></p>
<p><strong>Impact: EUR/USD, EUR/PLN</strong></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>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.<p><span style="font-weight: 400;">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.</span></p>
<h3><strong>Table of contents:</strong></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"><em><span style="font-weight: 400;">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.</span></em></li>
<li style="font-weight: 400;" aria-level="1"><em><span style="font-weight: 400;">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.</span></em></li>
<li style="font-weight: 400;" aria-level="1"><em><span style="font-weight: 400;">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.</span></em></li>
<li style="font-weight: 400;" aria-level="1"><em><span style="font-weight: 400;">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.</span></em></li>
<li style="font-weight: 400;" aria-level="1"><em><span style="font-weight: 400;">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.</span></em></li>
<li style="font-weight: 400;" aria-level="1"><em><span style="font-weight: 400;">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.</span></em></li>
</ul>
<h2 id="heading-scroll1"><strong>Revealed Comparative Advantage (RCA)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<h2 id="heading-scroll2"><strong>Why do you earn good money in Germany?</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_RCA_Niemcy_10.10.png" alt="RCA Germany" /></p>
<p><em><span style="font-weight: 400;">Source: UNCTADstat</span></em></p>
<h2 id="heading-scroll3"><strong>Is the strength of the Polish economy strong diversification?</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><em><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_RCA_Polska_10.10.png" alt="RCA Poland" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: UNCTADstat</span></em></p>
<h2 id="heading-scroll4"><strong>US with surprisingly low competitiveness</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_RCA_USA_10.10.png" alt="RCA USA" /></span></p>
<p><em><span style="font-weight: 400;">Source: UNCTADstat</span></em></p>
<h2 id="heading-scroll5"><strong>India's emerging power based on cheap labour</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_RCA_Indie_10.10.png" alt="RCA India" /></p>
<p><em><span style="font-weight: 400;">Source: UNCTADstat</span></em></p>
<h2 id="heading-scroll6"><strong>China stands on industry</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_RCA_Chiny_10.10.png" alt="RCA China" /></p>
<p><em><span style="font-weight: 400;">Source: UNCTADstat</span></em></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>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><strong>Table of contents:</strong></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"><strong>Wednesday 9.10, 20:00 CET, FOMC meeting minutes</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN</strong></p>
<h2 id="heading-scroll2">Czwartek, 10.10, 14:30 CET, indeks cen konsumpcyjnych w Stanach Zjednoczonych (CPI) miesięcznie (wrzesień)</h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts' consensus forecasts that disinflation of the US CPI will continue to advance to 2.3 per cent.</span></p>
<p><span style="font-weight: 400;"><em><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_CPI_04.10.png" alt="chart CPI inflation" /></em></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN</strong></p>
<h2 id="heading-scroll3"><strong>Friday, 11.10, 14:30 CET, US producer price index (PPI) monthly (September)</strong></h2>
<p><span style="font-weight: 400;">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. </span></p>
<p><span style="font-weight: 400;">Analysts' consensus is for US PPI inflation to fall to 1.3 per cent.</span></p>
<p><em><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_PPI_04.10.png" alt="chart PPI inflation" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN</strong></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>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><strong>Table of contents:</strong></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"><strong>First yellow card early in the match</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_CVC_Capital_03.10.png" alt="chart CVC Capital" /></p>
<p><em><span style="font-weight: 400;">Source: Żabka Group prospectus</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<h2 id="heading-scroll2"><strong>Żabka's successes to date</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Dino_03.10.png" alt="chart Dino" /></p>
<p><span style="font-weight: 400;">Source: Tradingview</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<h2 id="heading-scroll3"><strong>Valuation of Żabka like a tech giant</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Allegro_03.10.png" alt="chart Allegro" /></p>
<p><em><span style="font-weight: 400;">Source: Tradingview</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/tabela_wycena_%C5%BBabka_03.10.png" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia own analysis</span></em></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>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><strong>Table of contents:</strong></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"><strong>United States</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>S&P 500 - Price to earnings</strong></p>
<p><strong><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PE_SPX_01.10.png" alt="PE chart S&P 500" /></strong></p>
<p><em><span style="font-weight: 400;">Source: MacroMicro</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_SPX_01.10.png" alt="SPX chart" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, US500, Daily</span></em></p>
<h2 id="heading-scroll2"><strong>Taiwan</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>TAIEX - Price to earnings</strong></p>
<p><strong><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PE_TAIEX_01.10.png" alt="TAIEX PE chart" /></strong></p>
<p><em><span style="font-weight: 400;">Source: MacroMicro</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_TSMC_01.10.png" alt="TSMC chart" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, TaiwanSemic, Daily</span></em></p>
<h2 id="heading-scroll3"><strong>The awakening Chinese dragon</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>MSCI China - Price to earnings</strong></p>
<p><strong><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PE_China_01.10.png" alt="PE China chart" /></strong></p>
<p><em><span style="font-weight: 400;">Source: MacroMicro</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_China50_01.10.png" alt="China50 chart" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, China50, Daily</span></em></p>
<h2 id="heading-scroll4"><strong>Summary</strong></h2>
<p><span style="font-weight: 400;">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’.</span></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>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><strong>Table of contents:</strong></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"><strong>Monday, 30.09, 8:00 CET, UK gross domestic product (GDP) by quarter (Q2).</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts' consensus is for GDP growth to be confirmed at 0.9 per cent year-on-year.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_UK_27.09.png" alt="UK GDP graph" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for GBP, while a lower-than-expected reading could act bearishly on GBP.</span></p>
<p><strong>Impact: EUR/GBP, GBP/USD, GBP/PLN</strong></p>
<h2 id="heading-scroll2"><strong>Monday, 30.09, 14:00 CET, German consumer price index (CPI) monthly (September)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts' consensus forecasts that Germany's CPI disinflation will continue to advance to 1.5 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_niemcy_27.09.png" alt="chart of the German CPI" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR.</span></p>
<p><strong>Impact: EUR/USD, EUR/PLN</strong></p>
<h2 id="heading-scroll3"><strong>Tuesday, 1.10, 11:00 CET, Eurozone consumer price index (CPI) monthly (September)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">The analysts' consensus is for CPI inflation in the euro area to fall to 1.5 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_EU_27.09.png" alt="EU CPI chart" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR.</span></p>
<p><strong>Impact: EUR/USD, EUR/PLN</strong></p>
<h2 id="heading-scroll4"><strong>Friday, 4.10, 14:30 CET, US unemployment rate on a monthly basis (September)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts' consensus is for the US unemployment rate to rise to 4.3 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_bezrobocie_USA_27.09.png" alt="graph US unemployment" /></span></p>
<p><em><span style="font-weight: 400;">Impact: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bearish for the USD, while a lower-than-expected reading could act bullishly on the USD.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN</strong></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>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><strong>Table of contents:</strong></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"><strong>Thursday, 26.09, 9:30 CET, interest rate decision in Switzerland</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts' consensus is for another interest rate cut in Switzerland to 1 percent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_szwajcaria_20.09.png" alt="interest rate graph Switzerland" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>Impact: EUR/CHF, USD/CHF, CHF/PLN</strong></p>
<h2 id="heading-scroll2"><strong>Thursday, 26.09, 14:30 CET, US gross domestic product (GDP) quarterly (Q2).</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts' consensus is for the final US GDP reading to remain at 3 percent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_USA_20.09.png" alt="graph of US GDP" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN</strong></p>
<h2 id="heading-scroll3"><strong>Friday, 27.09, 14:30 CET, US personal consumption expenditures (PCE) price index per year (August)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts' consensus is for inflation to fall further to 2.4 percent.</span></p>
<p><em><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_PCE_20.09.png" alt="PCE inflation graph" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN</strong></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>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><strong>Table of contents:</strong></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"><strong>Wednesday 18.09. 08:00 CET, UK Consumer Price Index (CPI) YoY (August)</strong></h2>
<p><span style="font-weight: 400;">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). </span></p>
<p><span style="font-weight: 400;">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. </span></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts expect the UK's inflation rate to remain unchanged at 2.2 per cent from the previous month's reading. </span></p>
<p><em><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_UK_13.09.png" alt="UK inflation graph" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>Impact: USD/GBP, EUR/GBP</strong></p>
<h2 id="heading-scroll2"><strong>Wednesday 18.09. 11:00 CET, Euro Area Consumer Price Index (CPI) YoY (August)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts' expectations align with the initial estimates of the 2.2 per cent inflation rate in the Euro Area in August. </span></p>
<p><em><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_EU_13.09.png" alt="chart EU inflation" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>Impact: EUR/USD, EUR/GBP, EUR/PLN</strong></p>
<h2 id="heading-scroll3"><strong>Wednesday 18.09. 20:00 CET, Fed Interest Rate Decision</strong></h2>
<p><span style="font-weight: 400;">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. </span></p>
<p><span style="font-weight: 400;">Analysts expect the Fed funds interest rate to be lowered to 5.00 per cent in the upcoming meeting. </span></p>
<p><em><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_USA_13.09.png" alt="US rate chart" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>Impact: EUR/USD, USD/GBP, USD/PLN</strong></p>
<h2 id="heading-scroll4"><strong>Thursday 19.09. 13:00 CET, UK Interest Rate Decision</strong></h2>
<p><span style="font-weight: 400;">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. </span></p>
<p><span style="font-weight: 400;">Analysts expect the UK interest rate to stay unchanged at 5.00 per cent in the upcoming meeting. </span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_UK_13.09.png" alt="UK rate chart" /></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>Impact: EUR/GBP, USD/GBP, GBP/PLN</strong></p>
<h2 id="heading-scroll5"><strong>Friday 20.09. 05:00 CET, Japan Interest Rate Decision</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts expect Japan's interest rate to stay unchanged at 0.25 per cent in the upcoming meeting. </span></p>
<p><em><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_japonia_13.09.png" alt="rate chart Japan" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>Impact: EUR/JPY, USD/JPY, GBP/JPY</strong></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>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><strong>Table of contents:</strong></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"><strong>Tuesday, 10.09, 8:00 CET, German consumer price index (CPI) annualised (August)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts' consensus is for CPI inflation to remain at 1.9 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_Niemcy_6.09.png" alt="graph inflation Germany" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR.</span></p>
<p><strong>Impact: EUR/USD, EUR/PLN</strong></p>
<h2 id="heading-scroll2"><strong>Wednesday, 11.09, 14:30 CET, US consumer price index (CPI) annualised (August)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts' consensus forecasts, a further decline in CPI inflation to 2.6 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflajca_USA_6.09.png" alt="graph US inflation" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN</strong></p>
<h2 id="heading-scroll3"><strong>Thursday, 12.09, 14:15 CET, Eurozone interest rate decision</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts' consensus is for a 25bp cut in interest rates, to 4.00 per cent.</span></p>
<p><em><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_proc_EBC_6.09.png" alt="ECB interest rate graph" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>Impact: EUR/USD, EUR/PLN</strong></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>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"><strong>Wednesday, 4.09, 15:00 CET, interest rate decision in Poland</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts' consensus is for no change in NBP interest rates.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_PL_30.08.png" alt="Rate graph EN" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>Impact: EUR/PLN, USD/PLN, GBP/PLN</strong></p>
<h2 id="heading-scroll2"><strong>Wednesday, 4.09, 15:45 CET, interest rate decision in Canada</strong></h2>
<p><span style="font-weight: 400;">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. </span></p>
<p><span style="font-weight: 400;">Analysts' consensus is for interest rates to be cut to 4.25 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_Kanada_30.08.png" alt="rate chart Canada" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected interest rate could be bullish for CAD, while a lower-than-expected interest rate could act bearishly on CAD.</span></p>
<p><strong>Impact: USD/CAD, EUR/CAD</strong></p>
<h2 id="heading-scroll3"><strong>Friday, 6.09, 11:00 CET, Eurozone gross domestic product (GDP) quarterly (Q2).</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts' consensus is for eurozone GDP growth of 0.5 per cent year-on-year.</span></p>
<p><span style="font-weight: 400;"><em><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_EU_30.08.png" alt="EU GDP graph" /></em></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR.</span></p>
<p><strong>Impact: EUR/USD, EUR/PLN</strong></p>
<h2 id="heading-scroll4"><strong>Friday, 6.09, 14:30 CET, US unemployment rate (August)</strong></h2>
<p><span style="font-weight: 400;">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. </span></p>
<p><span style="font-weight: 400;">The analysts' consensus, however, is for the unemployment rate to fall to 4.2 per cent.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_bezrobocie_USA_30.08.png" alt="graph US unemployment" /></p>
<p><em><span style="font-weight: 400;">Impact: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bearish for the USD, while a lower-than-expected reading could act bullishly on the USD.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN</strong></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>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><strong>Table of contents:</strong></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"><strong>What has happened on the markets?</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Nvidia_30.08.png" alt="Nvidia chart" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, NVIDIA, Daily</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<h2 id="heading-scroll2"><strong>Is Nvidia overvalued?</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/tabela_wycena_Nvidii_ENG_30.08.png" alt="Nvidia valuation table" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia's own analysis</span></em></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>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><strong>Table of contnets:</strong></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"><strong>Invesco S&P 500 Momentum ETF</strong></h2>
<p><em><span style="font-weight: 400;"><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" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: Tradingview</span></em></p>
<p><span style="font-weight: 400;">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. </span></p>
<h2 id="heading-scroll2"><strong>Invesco Energy Exploration & Production ETF</strong></h2>
<p><em><span style="font-weight: 400;"><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" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: Tradingview</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<h2 id="heading-scroll3"><strong>iShares Russell Top 200 Growth ETF</strong></h2>
<p><em><span style="font-weight: 400;"><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" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: Tradingview</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<h2 id="heading-scroll4"><strong>First Trust RBA American Industrial Renaissance ETF</strong></h2>
<p><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" /></p>
<p><em><span style="font-weight: 400;">Source: Tradingview</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<h2 id="heading-scroll5"><strong>iShares Semiconductor ETF</strong></h2>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Semiconductor_ETF_28.08.png" alt="chart iShares Semiconductor ETF" /></p>
<p><em><span style="font-weight: 400;">Source: Tradingview</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>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><strong>Table of contents:</strong></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"><strong>Two basic principles of investment</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<h2 id="heading-scroll2"><strong>How to hedge your investment portfolio against risk?</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<h2 id="heading-scroll3"><strong>What to avoid during a crisis?</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>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><strong>Table of contents:</strong></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"><strong>Tuesday, 27.08, 8:00 a.m. CET, Germany's gross domestic product (GDP) by quarter (Q2)</strong></h2>
<p><span style="font-weight: 400;">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. </span></p>
<p><span style="font-weight: 400;">Analysts' consensus forecasts a 0.1 per cent fall in GDP in the second quarter.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB)niemiec_23.08.png" alt="graph of German GDP" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR.</span></p>
<p><strong>Impact: EUR/USD, EUR/PLN</strong></p>
<h2 id="heading-scroll2"><strong>Thursday, 29.08, 10:00 CET, Poland's gross domestic product (GDP) in quarterly terms (Q2)</strong></h2>
<p><span style="font-weight: 400;">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. </span></p>
<p><span style="font-weight: 400;">Analysts' consensus is to confirm Poland's GDP growth at 3.2 per cent year-on-year.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_PL_23.08.png" alt="graph of Poland's GDP" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the PLN, while a lower-than-expected reading could act bearishly on the PLN.</span></p>
<p><strong>Impact: EUR/PLN, USD/PLN</strong></p>
<h2 id="heading-scroll3"><strong>Thursday, 29.08, 14:30 CET, US gross domestic product (GDP) by quarter (Q2)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts' consensus is for US GDP growth to remain at 2.8 per cent.</span></p>
<p><em><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_USA_23.08.png" alt="graph of US GDP" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN</strong></p>
<h2 id="heading-scroll4"><strong>Friday, 30.08, 11:00 CET, Eurozone consumer price index (CPI) annualised (August)</strong></h2>
<p><span style="font-weight: 400;">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).</span></p>
<p><span style="font-weight: 400;">Analysts' consensus is for CPI inflation in the euro area to fall to 2.3 per cent.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_UE_23.08.png" alt="EU inflation graph" /></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR.</span></p>
<p><strong>Impact: EUR/USD, EUR/PLN</strong></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>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><strong>Table of contents:</strong></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"><strong>This is not the end of gold shopping!</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><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" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia own study, NBP data</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;"><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" /></span></p>
<p><em><span style="font-weight: 400;">Source: WGC</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_zakupy_z%C5%82ota_22.08.png" alt="chart of gold purchases" /></p>
<p><em><span style="font-weight: 400;">Source: WGC</span></em></p>
<h2 id="heading-scroll2"><strong>Is this the end of the rises in gold?</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_cena_z%C5%82ota_22.08.png" alt="chart gold price" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, XAUUSD, Daily</span></em></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>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><strong>Table of contents:</strong></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"><strong>Superinvestors on the stock exchanges: much more sold than bought</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_zakupy_superinwestor%C3%B3w_20.08.png" alt="chart of superinvestor purchases" /></p>
<p><em><span style="font-weight: 400;">Source: Dataroma</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<h2 id="heading-scroll2"><strong>Buffett like Scrooge McDuck is currently sitting on a huge amount of cash</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_BerkshireHa_20.08.png" alt="Berkshire Hathaway chart" /></span></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, BerkshireHa, Daily</span></em></p>
<p><span style="font-weight: 400;">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’.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/tabela_portfel_buffetta_20.08.png" alt="Buffett's portfolio table" /></p>
<p><em><span style="font-weight: 400;">Source: Dataroma</span></em></p>
<h2 id="heading-scroll3"><strong>Michael Burry and the rising bet on China</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Baidu_20.08.png" alt="Baidu chart" /></span></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, Baidu, Daily</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/tabela_Burry_20.08.png" alt="Burr's portfolio table" /></p>
<p><em><span style="font-weight: 400;">Source: Dataroma</span></em></p>
<h2 id="heading-scroll1"><strong>Conclusions</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>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><strong>Table of contents:</strong></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"><strong>Tuesday, 20.08, 11:00 CET, Eurozone consumer price index (CPI) annualised (July)</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">Analysts' forecast is for CPI inflation to rise to 2.6 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_EU_16.08.png" alt="EU inflation graph" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR.</span></p>
<p><strong>Impact: EUR/USD, EUR/PLN</strong></p>
<h2 id="heading-scroll2"><strong>Wednesday, 21.08, 20:00 CET, FOMC meeting minutes</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN</strong></p>
<h2 id="heading-scroll3"><strong>Thursday, 22.08, 14:30 CET, US manufacturing leading indicators (PMIs) for August</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PMI_USA_16.08.png" alt="US industry PMI chart" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN</strong></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>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><strong>Table of contents:</strong></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>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Starbucks_14.08.png" alt="Starbucks chart" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingview.com</span></em></p>
<h2 id="heading-scroll1"><strong>Consumers cutting on discretionary spending</strong></h2>
<p><span style="font-weight: 400;">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. </span></p>
<p><span style="font-weight: 400;">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%. </span></p>
<p><em><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/tabela_ENG_Q3_14.08.png" alt="Q3 table" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: Starbucks financial statements</span></em></p>
<p><span style="font-weight: 400;">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%.</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<h2 id="heading-scroll2"><strong>The whole discretionary sector suffering</strong></h2>
<p><span style="font-weight: 400;">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. </span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_S%26P500_14.08.png" alt="S&P 500 chart" /></span></p>
<p><em><span style="font-weight: 400;">Source: S&Pglobal.com</span></em></p>
<h2 id="heading-scroll3"><strong>The new Starbucks CEO, Brian Niccol</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<h2 id="heading-scroll4"><strong>Should you jump on the “Starbucks train”?</strong></h2>
<p><span style="font-weight: 400;">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. </span></p>
<p><span style="font-weight: 400;">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. </span></p>
<p><span style="font-weight: 400;">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. </span></p>
<p><em><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/tabela_ENG_wska%C5%BAniki_14.08.png" alt="table indicators" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: finance.yahoo.com, eqvista.com, author calculations</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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. </span></p>
<h2 id="heading-scroll5"><strong>Conclusion</strong></h2>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><span style="font-weight: 400;">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. </span></p>
<p><span style="font-weight: 400;">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. </span></p>
<p><br /><br /></p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
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</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...Why doesn't OPEC see a recession in the US? What's next for the oil price?https://invest.conotoxia.com/investment-research/comments/why-doesn-t-opec-see-a-recession-in-the-us-what-s-next-for-the-oil-pricehttps://invest.conotoxia.com/investment-research/comments/why-doesn-t-opec-see-a-recession-in-the-us-what-s-next-for-the-oil-priceOPEC's latest report revised downwards its forecasts for oil demand in 2025.The slowdown is expected to affect two key economic regions: China and the Middle East. Despite this, the data clearly indicates an expected global oil shortage, already exceeding the levels seen after the post-pandemic unfreeze in 2021, when the price of crude experienced its fastest increase in years.<h3><strong>Table of contents:</strong></h3>
<ol>
<li><a href="#heading-scroll1">What is driving global oil price rises?</a></li>
<li><a href="#heading-scroll2">Oil price forecast</a></li>
</ol>
<h2 id="heading-scroll1"><strong>What is driving global oil price rises?</strong></h2>
<p><span style="font-weight: 400;">According to OPEC, global consumption is expected to increase by 1.7 per cent in 2025. On the other hand, global production is expected to increase by 1.1 per cent next year, driven by production increases of 2.3 per cent in the United States and 3.6 per cent in Latin America. The leaders in consumption growth are likely to be India, with a projected growth rate of 4.1 per cent, and China, with a 2.4 per cent increase next year. </span></p>
<p><span style="font-weight: 400;">Global oil shortages could exceed 2 per cent of demand volumes, which is higher than in 2021, when the oil price rose 53 per cent.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_niedobory_ropy_14.08.png" alt="graph of oil market shortages" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia own study, OPEC data</span></em></p>
<h2 id="heading-scroll2"><strong>Oil price forecast</strong></h2>
<p><span style="font-weight: 400;">Petrol station prices in Poland, the UK and the US have fallen significantly since May - by 3.7 per cent in our country and the UK, and by 8.9 per cent in the US. </span></p>
<p><span style="font-weight: 400;">Possible increases in market prices will affect each of these countries to varying degrees, but the direction of change should remain uniform for all economies. In the event of increased crude prices on the financial markets, we are therefore likely to pay more for fuel at the pump.</span></p>
<p><span style="font-weight: 400;">Currently, the price of oil is rebounding to around $80 per barrel, and in the short term it is being driven by both the tense geopolitical situation in the Middle East and a decline in fears of a possible recession in the United States. Consequently, our base case scenario assumes a continuation of oil price rises, with the possibility of exceeding the $90 per barrel ceiling by the end of this year.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_crude_oil_14.08.png" alt="XTIUSD chart" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, XTIUSD, Daily</span></em></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>forex conotoxia.comWed, 14 Aug 2024 09:23:00 +0200OPEC's latest report revised downwards its forecasts for oil demand in 2025.The slowdown is expected to affect two key economic regions: China and the Middle East. Despite this, the data clearly indicates an expected global oil shortage, already exceedi...Next week to watch (12-15.08.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-12-15-08-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-12-15-08-2024After 'Black Monday', which caused significant declines in financial markets, the situation is slowly stabilising, although uncertainty still prevails. The Nasdaq 100 and Nikkei 225 indices recovered some of their earlier losses of 5.4 per cent and 13.3 per cent respectively. The panic in the markets was caused by fears of a recession in the US, the Fed's delayed response and the Bank of Japan's change in policy, which affected the strengthening of the yen and falls in Japanese stocks.
The Fed faces a difficult choice between fighting inflation and preventing a recession, leading the market to expect interest rate cuts. Economic data such as the rise in unemployment and the decline in the ISM business climate index are cause for concern, but economic growth and still low unemployment claims suggest that the recession has not yet begun.
An additional destabilising factor for the markets was the termination of the Carry Trade strategy due to the rise in interest rates in Japan. This forced funds to close losing positions, exacerbating the sell-off in markets. Despite the strengthening of the yen, real interest rates in Japan remain negative, which continues to support the strengthening US dollar.
Warren Buffett, through his Berkshire Hathaway fund, has sold almost half of his stake in Apple, surprising many investors. Despite his previous praise for Apple, Buffett made the decision to sell because he felt the company's shares were overvalued - the price-to-earnings ratio had risen from 12 to 32 since Buffett first bought the shares in 2016. Berkshire Hathaway's fund has raised a record amount of cash and short-term government bonds worth more than $270bn, which is expected to bring safe returns to the company. Buffett has also made other sales, including shares in Bank of America.<h3><strong>Table of contents:</strong></h3>
<ol>
<li><a href="#heading-scroll1">US producer price index (PPI) on a monthly basis (July)</a></li>
<li><a href="#heading-scroll2">UK consumer price index (CPI) annualised (July)</a></li>
<li><a href="#heading-scroll3">US consumer price index (CPI) annualised (July)</a></li>
<li><a href="#heading-scroll4">Japan's gross domestic product (GDP) quarterly (Q2)</a></li>
</ol>
<h2 id="heading-scroll1"><strong>Tuesday, 13.08, 14:30 CET, US producer price index (PPI) on a monthly basis (July)</strong></h2>
<p><span style="font-weight: 400;">US producer prices rose by 2.6 per cent year-on-year in June this year. This was the highest increase since March 2023. The reading beat the upwardly revised 2.4 per cent increase in May and also exceeded market expectations of 2.3 per cent.</span></p>
<p><span style="font-weight: 400;">Analysts' forecast is for PPI inflation to remain at 2.6 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PPI_USA_09.08.png" alt="US PPI chart" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN</strong></p>
<h2 id="heading-scroll2"><strong>Wednesday, 14.08, 8:00 CET, UK consumer price index (CPI) annualised (July)</strong></h2>
<p><span style="font-weight: 400;">Annual inflation in the UK remained at 2 per cent in June, in line with May, although 1.9 per cent was forecast. The rise in inflation was mainly driven by higher prices in restaurants, hotels and transport, where second-hand cars and airfares in particular became more expensive. On the other hand, the decline in inflation was driven by lower prices for clothing, footwear and food and non-alcoholic beverages. Housing and utilities prices continued to fall, while inflation in services and leisure remained stable.</span></p>
<p><span style="font-weight: 400;">The current analyst forecast is for CPI inflation to rise to 2.3 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_UK_09.08.png" alt="UK CPI chart" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for GBP, while a lower-than-expected reading could act bearishly on GBP.</span></p>
<p><strong>Impact: EUR/GBP, GBP/USD, GBP/PLN</strong></p>
<h2 id="heading-scroll3"><strong>Wednesday, 14.08, 14:30 CET, US consumer price index (CPI) annualised (July)</strong></h2>
<p><span style="font-weight: 400;">Annual inflation in the US fell for the third consecutive month in June to 3 per cent, the lowest level in a year. A reading of 3.3 per cent was recorded in May, and forecasts for June were for inflation of 3.1 per cent. Energy costs rose at a slower rate than in the previous month, with gasoline and heating oil the main contributors. Inflation also fell for accommodation and transport, new and used vehicles. In contrast, food price dynamics accelerated slightly. The monthly CPI unexpectedly fell by 0.1 per cent, the first decline since 2020.</span></p>
<p><span style="font-weight: 400;">The current analyst forecast is for US CPI inflation to fall to 2.9 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_USA_09.08.png" alt="chart of the US CPI" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the USD, while a lower-than-expected reading could act bearishly on the USD.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN</strong></p>
<h2 id="heading-scroll4"><strong>Thursday, 15.08, 1:50 CET, Japan's gross domestic product (GDP) quarterly (Q2)</strong></h2>
<p><span style="font-weight: 400;">In the first quarter of this year, Japan's GDP fell by 0.5 per cent quarter-on-quarter, which was also a year-on-year decline of 0.2 per cent. This was the first decline in GDP since 2021, confirming that Japan's economy is not yet out of its generational stagnation. Private consumption fell for the fourth consecutive quarter, mainly due to the high cost of living, low wages and the earthquake.</span></p>
<p><span style="font-weight: 400;">Analysts' current forecast is for Japan's GDP to grow by 0.5 per cent quarter-on-quarter</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_japonii_09.08.png" alt="Japan's GDP graph" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the JPY, while a lower-than-expected reading could act bearishly on the JPY.</span></p>
<p><strong>Impact: EUR/JPY, USD/JPY, Nikkei 225</strong></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>forex conotoxia.comFri, 09 Aug 2024 12:54:00 +0200After 'Black Monday', which caused significant declines in financial markets, the situation is slowly stabilising, although uncertainty still prevails. The Nasdaq 100 and Nikkei 225 indices recovered some of their earlier losses of 5.4 per cent and 13.3...Why did Warren Buffett sell Apple shares?https://invest.conotoxia.com/investment-research/comments/why-did-warren-buffett-sell-apple-shareshttps://invest.conotoxia.com/investment-research/comments/why-did-warren-buffett-sell-apple-sharesBerkshire Hathaway, Warren Buffett's fund has sold almost half of its stake in Apple representing the largest position in the Fund's portfolio. In doing so, the investment vehicle amassed a record amount of cash and short-term government bonds totalling more than $270 billion. Why did he make this decision?<h3><strong>Table of contents:</strong></h3>
<ol>
<li><a href="#heading-scroll1">Buffett's record cash and short-term government bonds</a></li>
<li><a href="#heading-scroll2">Why did Buffett sell Apple shares?</a></li>
<li><a href="#heading-scroll3">Apple's P/E ratio</a></li>
</ol>
<h2 id="heading-scroll1"><strong>Buffett's record cash and short-term government bonds</strong></h2>
<p><span style="font-weight: 400;">Berkshire Hathaway currently holds more short-term US Treasury bonds than the Federal Reserve. At the end of the second quarter of 2024, the fund had increased its holdings of these bonds by 81 per cent compared to the end of 2023, reaching $234.6 billion. This is a staggering amount given that the Federal Reserve currently holds $195.3 billion of them. These are expected to bring Buffett's firm around $12bn in safe profits per year. This is a record amount, even if we take the proportion of cash and said short-term bonds as a percentage of total assets. It accounted for 25 per cent of the fund's total balance sheet at the end of June. To date, it has hardly exceeded 16 per cent.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Cash_BerkshireHa_09.08.png" alt="Berkshire Hathaway cash graph" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia Own study</span></em></p>
<h2 id="heading-scroll2"><strong>Why did Buffett sell Apple shares?</strong></h2>
<p><span style="font-weight: 400;">The sale of Apple's shares surprised many investors following the actions of the 'Oracle of Omaha', as only three months earlier Warren Buffett had praised the company's actions. This reminds us of the basic investment principle advocated by New York University professor Aswath Damodaran: "keep your eyes on the price". Even the best company can be overvalued, as the legendary investor now apparently recognises. When Buffett first bought Apple's shares in 2016, the company's price-to-earnings (P/E) ratio was 12. This has now risen to 32. This means that although the company's business fundamentals have remained unchanged, its shares are now relatively almost three times more expensive than before, which may be an indication of its market overvaluation.</span></p>
<h2 id="heading-scroll3"><strong>Apple's P/E ratio</strong></h2>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PE_Apple_09.08.png" alt="chart of Apple's P/E ratio" /></p>
<p><em><span style="font-weight: 400;">Source: Macrotrends</span></em></p>
<p><span style="font-weight: 400;">The famous investor seems to be suggesting that there are currently few attractive opportunities among the largest US companies that could be potential investments for such a large fund, in fact we are seeing an oversaturation. Among the other deals Berkshire Hathaway has done is selling shares in Bank of America for $3.8 billion. So far, it was the second largest item in his portfolio, the contents of which we will know in detail in the coming days. This is because 15 August is the deadline for the 13F report, in which super-investors with more than $100 million in capital are required to report their transactions made on the US stock exchange in the last quarter.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_berkshireHa_09.08.png" alt="Berkshire Hathaway chart" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, BerkshireHa, Daily</span></em></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>forex conotoxia.comThu, 08 Aug 2024 16:35:00 +0200Berkshire Hathaway, Warren Buffett's fund has sold almost half of its stake in Apple representing the largest position in the Fund's portfolio. In doing so, the investment vehicle amassed a record amount of cash and short-term government bonds totalling...Landscape after the battle. What do markets look like after 'Black Monday'?https://invest.conotoxia.com/investment-research/comments/landscape-after-the-battle-what-do-markets-look-like-after-black-mondayhttps://invest.conotoxia.com/investment-research/comments/landscape-after-the-battle-what-do-markets-look-like-after-black-mondayThe threat is scarier than its implementation. This saying perfectly encapsulates the current stock market situation, especially in the context of concerns about, among other things, a possible recession in the United States. When negative news is superimposed on the financial markets, a sudden collapse such as we witnessed during Monday's session could occur. At its peak, the Nasdaq 100 index fell by 5.4 per cent, reaching 15.8 per cent below its previous highs. Japan's Nikkei 225 index lost 13.3 per cent in a single session, wiping out a full year's worth of gains. However, the situation is beginning to stabilise. The Nasdaq 100 has recovered 3.6 per cent and the Nikkei 225 12.6 per cent from its low. What factors could have caused the panic and are the stock markets really back to normal yet?<h3><strong>Table of contents:</strong></h3>
<ol>
<li><a href="#heading-scroll1">Will we have a recession in the United States?</a></li>
<li><a href="#heading-scroll2">Is this the end of the Carry Trade strategy?</a></li>
<li><a href="#heading-scroll3">Is this the start of a market downturn?</a></li>
</ol>
<h2 id="heading-scroll1"><strong>Will we have a recession in the United States?</strong></h2>
<p><em><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_US100_07.08.png" alt="US100 chart" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, US100, Daily</span></em></p>
<p><span style="font-weight: 400;">Investors' reactions to news of a possible imminent recession in the US, the Fed's overdue response and the Bank of Japan's move away from its zero interest rate policy were the main factors behind the declines, which significantly strengthened the yen and negatively impacted the profitability of Japanese exporters. The probability of an interest rate cut by the Fed at its September meeting rose to 100 per cent, pushing 10-year US bond yields down to their lowest level in more than a year.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wukres_rentowno%C5%9B%C4%87_USA_07.08.png" alt="chart of US bond yields" /></p>
<p><em><span style="font-weight: 400;">Source: Tradingview</span></em></p>
<p><span style="font-weight: 400;">The Fed is facing a choice of the lesser of two evils, balancing the risk of a return to inflation with the threat of recession, which has altered previous interest rate expectations. After 'Black Monday', the market expects the Fed to cut interest rates by as much as 50 basis points at its September meeting, and by 25 basis points at each subsequent meeting. Only a month ago, such a scenario seemed almost unthinkable to most analysts.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/tabela_prawdopodobie%C5%84stwo_st%C3%B3p_07.08.png" alt="interest rate probability table" /></p>
<p><em><span style="font-weight: 400;">Source: CMEGroup, FedWatch</span></em></p>
<p><span style="font-weight: 400;">However, if we look at the data that caused concern in the US market, we see that the unemployment rate rose from 4.1 per cent to 4.3 per cent, which is still below the multi-year average. Another negative surprise was the reading of the US manufacturing leading indicator, the so-called ISM, which came in at 46.8 points, compared to the expected 48.8 points (values below 50 indicate an expected slowdown and above 50 an expansion). In contrast, the ISM index for non-industrial sectors indicated expected expansion and stood at 51.4 points. It is also difficult to speak of a recession when economic growth in the second quarter of this year was 2.8 per cent. To conclude that a recession has begun, we must wait for more data from the economy. However, the market always tries to price the future, hence the proverb "the threat is scarier than its execution" is confirmed.</span></p>
<h2 id="heading-scroll2"><strong>Is this the end of the Carry Trade strategy?</strong></h2>
<p><span style="font-weight: 400;">Increasingly, we may hear that the current rise in interest rates in Japan has just led to the end of the very popular Carry Trade strategy among hedge funds and financial institutions. This involves borrowing in a currency with a low interest rate and investing those funds in another currency in an asset that yields a higher rate of return. Borrowing in Japan (interest rates below 0.5 per cent) to buy US bonds (interest rates above 5 per cent) with the yen received was particularly popular. In this way, exposing themselves mainly to currency risk, the funds made money without much contribution. However, when interest rates rose and the Japanese yen strengthened, this strategy resulted in large losses, as the USD/JPY exchange rate fell by 12 per cent in a month. This forced the funds to close their losing positions and cover their losses, triggering a discount in most markets.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_USDJPY_07.08.png" alt="USDJPY chart" /></span></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, USDJPY, Daily</span></em></p>
<p><span style="font-weight: 400;">Despite the appreciation of the yen, real interest rates in Japan are still negative. After the latest increase, the nominal rate is 0.25 per cent, while inflation remains at 2.8 per cent. In comparison, real interest rates in the United States are clearly positive, with a nominal rate of 5.5 per cent and inflation at 3 per cent. This means that the US dollar has most of the theoretical factors for further appreciation against the yen, and the Carry Trade strategy still remains profitable.</span></p>
<p><span style="font-weight: 400;">The appreciation of the yen has particularly negatively affected the profits of Japanese exporters, which have a significant weighting in the country's indices. The Nikkei 225 index has lost all of this year's gains. It appears that future USD/JPY movements may largely influence the ups or downs of this index in the coming months.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_JP225_07.08.png" alt="JP225 chart" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, JP225, Daily</span></em></p>
<h2 id="heading-scroll3"><strong>Is this the start of a market downturn?</strong></h2>
<p><span style="font-weight: 400;">At present, it is difficult to talk about the start of a bear market or the continuation of declines in the main indices, given the still good economic situation. When investing, we must remember that unpredictable 'black swans' can happen, so it is important to make rational decisions so as not to succumb to FOMO. When a sell-off spills over into all markets, even those unrelated to the news in question, we should try to use these situations to our advantage whenever possible.</span></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>forex conotoxia.comWed, 07 Aug 2024 15:05:00 +0200The threat is scarier than its implementation. This saying perfectly encapsulates the current stock market situation, especially in the context of concerns about, among other things, a possible recession in the United States. When negative news is super...Next week to watch (5-9.08.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-5-9-08-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-5-9-08-2024We are still in risk-off mode in the market driven by technology stocks. The main US S&P 500 index remains 3.9 per cent below its peaks and the tech Nasdaq 100 has slid 8.7 per cent. Negative sentiment may be dampened by data from recent reports from the major tech giants. All beat analysts' expectations. Microsoft reported a 10 per cent increase in net profit, Meta Platforms a 73 per cent increase, Apple gained 11 per cent and Amazon 101 per cent over last year. Hence, the current declines in the indices appear to be a profit realisation by the big players in relation to company performance, rather than a deteriorating business situation.
The situation is much worse overseas. Japan's Nikkei 225 index has plunged by as much as 15.2% in less than three weeks due to the significant strengthening of the yen. The USD/JPY exchange rate fell by 8 per cent in that time, as the Bank of Japan raised interest rates to 0.25 per cent, to the highest level in 16 years. The yen's strengthening is hurting Japanese export companies, which have previously benefited from a relatively weak currency. If the yen continues to strengthen, this could reverse the upward trend in the Japanese market, but the current strengthening of the JPY may be temporary.
In the coming week, we will learn about the central bank of Australia's interest rate decision, US unemployment claims data and the German inflation rate.<h3><strong>Table of contents:</strong></h3>
<ol>
<li><a href="#heading-scroll1">Interest rate decision in Australia</a></li>
<li><a href="#heading-scroll2">Preliminary number of applications for unemployment benefits in the United States</a></li>
<li><a href="#heading-scroll3">German consumer price index (CPI) annualised (July)</a></li>
</ol>
<h2 id="heading-scroll1"><strong>Tuesday, 6.08, 6:30 CET, interest rate decision in Australia</strong></h2>
<p><span style="font-weight: 400;">Australia's central bank kept interest rates at 4.35 per cent at its June meeting. Inflation in Australia remains elevated at 3.8 per cent. However, the economy is cooling significantly as GDP growth has slowed to 1.1 per cent year-on-year compared to previous levels around 4 per cent. The labour market situation has also deteriorated over the past year. The unemployment rate has risen to 4.1 per cent from 3.5 per cent a year earlier, putting pressure on possible earlier interest rate cuts.</span></p>
<p><span style="font-weight: 400;">Analysts' forecast is for interest rates to remain at 4.35 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_Australia_02.08.png" alt="chart interest rates Australia" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected interest rate could be bullish for AUD, while a lower-than-expected interest rate could act bearishly on AUD.</span></p>
<p><strong>Impact: AUD/USD, EUR/AUD</strong></p>
<h2 id="heading-scroll2"><strong>Thursday, 8.08, 14:30 CET, preliminary number of applications for unemployment benefits in the United States</strong></h2>
<p><span style="font-weight: 400;">The number of US unemployment claims rose to 249,000 in the week ending 27 July. This is the highest reading in a year. This increase, along with other indicators, suggests a weakening labour market, intensifying expectations for a September interest rate cut by the Federal Reserve.</span></p>
<p><span style="font-weight: 400;">The current analyst forecast is for a reading of 247,000 claims.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_bezrobocie_USA_02.08.png" alt="graph number of applications for US benefits" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bearish for the USD, while a lower-than-expected reading could act bullishly on the USD.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN</strong></p>
<h2 id="heading-scroll3"><strong>Friday, 9.08, 8:00 CET, German consumer price index (CPI) annualised (July)</strong></h2>
<p> </p>
<p><span style="font-weight: 400;">Annual inflation in Germany unexpectedly rose to 2.3 per cent in July 2024, up from 2.2 per cent in June, despite forecasts that price dynamics would remain stable. The increase was mainly in food, with energy costs falling more slowly than in the previous month. </span></p>
<p><span style="font-weight: 400;">Analysts' current forecast is for inflation to remain at 2.3 per cent.</span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR.</span></p>
<p><strong>Impact: EUR/USD, EUR/PLN</strong></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>forex conotoxia.comFri, 02 Aug 2024 14:15:00 +0200We are still in risk-off mode in the market driven by technology stocks. The main US S&P 500 index remains 3.9 per cent below its peaks and the tech Nasdaq 100 has slid 8.7 per cent. Negative sentiment may be dampened by data from recent reports from th...Bank of Japan raises interest rates to highest level in 16 years!https://invest.conotoxia.com/investment-research/comments/bank-of-japan-raises-interest-rates-to-highest-level-in-16-yearshttps://invest.conotoxia.com/investment-research/comments/bank-of-japan-raises-interest-rates-to-highest-level-in-16-yearsThe Bank of Japan decided to raise interest rates from 0.1 to 0.25 per cent, which, although anticipated by some analysts, caused a stir in the markets. The immediate effect of the decision was a strengthening of the yen and a 1.4 per cent drop in the USD/JPY pair. This is a good time to take a closer look at Japan's current economic situation and to consider how this fundamental change might affect companies there.<h3><strong>Table of contents:</strong></h3>
<ol>
<li><a href="#heading-scroll1">A failed economic experiment time to end</a></li>
<li><a href="#heading-scroll2">The strengthening of the yen and the impact on markets?</a></li>
<li><a href="#heading-scroll3">What is the future for Japanese business?</a></li>
</ol>
<h2 id="heading-scroll1"><strong>A failed economic experiment time to end</strong></h2>
<p><span style="font-weight: 400;">Japan's economy is said to be a testing ground for the rest of the world. However, even Japan being an island does not exist in economic limbo. The quantitative easing programme, conducted almost continuously since 2001 by buying Japan's debt from the market, has not fuelled economic growth. Today, Japan's GDP is at the same levels as in 1993!</span><span style="font-weight: 400;"><br /><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_japonii_31.07.png" alt="japanese GDP graph" /><br /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics</span></em></p>
<p><span style="font-weight: 400;">Despite having the highest debt level in the world, at 266 per cent of GDP in 2023, Japan has managed to avoid a financial crisis thanks to a unique economic strategy. The Bank of Japan (BoJ) has bought up around 54 per cent of the country's total public debt, a significant proportion of its liabilities. Research by the US Fed highlights that Japan has managed its debt effectively for more than two decades thanks to a specific ownership structure, including pension funds and the government's strategy of investing in global equity markets. Large asset holdings, such as pension funds, allow Japan to maintain high debt levels with minimal debt servicing costs. In the United States, the situation is different - the smaller gap between the return on assets and the cost of borrowing and the different structure of savings and investments make the Japanese strategy inapplicable there.</span></p>
<h2 id="heading-scroll2"><strong>The strengthening of the yen and the impact on markets?</strong></h2>
<p><span style="font-weight: 400;">Over the past two weeks, the Japanese yen has strengthened by 7.6 per cent against the US dollar. However, it is worth remembering that the JPY had previously lost 45 per cent to the USD over a three-year period. The current rise in the Japanese currency is largely due to increasing pressure on the Bank of Japan to raise interest rates in response to inflation, which stands at 2.8 per cent and slightly above the Bank's inflation target.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_USDJPY_31.07.png" alt="USDJPY chart" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, USDJPY, Daily</span></em></p>
<p><span style="font-weight: 400;">The weakening of the yen has particularly benefited Japanese companies, which rely heavily on exports but have not shown significant growth in recent years. The weaker local currency naturally boosted export profits, which has been one of the main factors behind the 44 per cent rise in Japan's main Nikkei 225 index over the past three years, breaking through its historical peaks. The profits of the companies comprising this index have risen by a total of 32 per cent over this period. Therefore, the current rapid strengthening of the yen has contributed to the recent sell-off in equities from this market, which have fallen by 9.5 per cent from their peaks.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_JP225_31.07.png" alt="JP225 chart" /></span></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, JP225, Daily</span></em></p>
<h2 id="heading-scroll3"><strong>What is the future for Japanese business?</strong></h2>
<p><span style="font-weight: 400;">If the strengthening of the Japanese currency continues, we could witness a reversal of the upward trend in the Japanese market. Currently, companies there, rather than competing with innovation in international markets, are benefiting most from the devaluation of the yen. However, it appears that the current strengthening of the currency is temporary as, despite the increase in interest rates, they are still well below inflation, which does not materially change the economic fundamentals behind the weakness of the Japanese currency.</span></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>forex conotoxia.comWed, 31 Jul 2024 14:52:00 +0200The Bank of Japan decided to raise interest rates from 0.1 to 0.25 per cent, which, although anticipated by some analysts, caused a stir in the markets. The immediate effect of the decision was a strengthening of the yen and a 1.4 per cent drop in the U...The impact of the Olympic Games on the French economy and the CAC40 indexhttps://invest.conotoxia.com/investment-research/comments/the-impact-of-the-olympic-games-on-the-french-economy-and-the-cac40-indexhttps://invest.conotoxia.com/investment-research/comments/the-impact-of-the-olympic-games-on-the-french-economy-and-the-cac40-indexThe opening ceremony of the XXXIII Summer Olympics Paris 2024 kicked off on 26 July. Unfortunately, the scandal at the ceremony, involving a parody of the Christian ‘Last Supper’, has caused controversy instead of general delight. Relatively high ticket prices affect the fact that around 1.5 million tourists will come to France, even though the organisers had hoped for 3 million. How might the Games, which cost an estimated €9.7 billion to organise, affect the economy and business in France?<h3><strong>Table of contents:</strong></h3>
<ol>
<li><a href="#heading-scroll1">How important will the Olympic Games be for France's economy?</a></li>
<li><a href="#heading-scroll2">Impact of the Olympic Games on the CAC40 index</a></li>
<li><a href="#heading-scroll3">What does the future hold for the CAC40 index?</a></li>
</ol>
<h2 id="heading-scroll1"><strong>How important will the Olympic Games be for France's economy?</strong></h2>
<p><span style="font-weight: 400;">It is estimated that the Games will bring $12 billion to the French economy, while generating $5.7 billion in taxes. This would mean that they would raise France's GDP by around 0.8 per cent per year. Despite criticism of underperformance in the aviation sector and overestimated visitor numbers in the tourism industry, the economy as a whole is doing relatively well, recording GDP growth of 1.1 per cent in the second quarter.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_Francji_31.07.png" alt="France's GDP graph" /></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics</span></em></p>
<h2 id="heading-scroll2"><strong>Impact of the Olympic Games on the CAC40 index</strong></h2>
<p><span style="font-weight: 400;">Despite the intense promotion of France, the local stock market has seen a 1.2 per cent decline over the past month and is 9.6 per cent below its peaks, as a result of the turmoil surrounding the National Assembly elections.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_F40_31.07.png" alt="chart F40" /></span></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, F40, Daily</span></em></p>
<p><span style="font-weight: 400;">To better understand the impact of the Games on business, it is worth looking at the sectors covered by the stock index. It will be seen that the consumer goods sector, which includes luxury brands such as LVMH and Hermes, has a significant impact of 19.3 per cent.</span></p>
<p><em><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_sektory_CAC_31.07.png" alt="CAC40 sector chart" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia own analysis</span></em></p>
<p><span style="font-weight: 400;">Another index company that is already seeing the impact of the Olympic Games on its performance is hotel group Accor SA. Hotel operators in Paris have decided to cut prices and lift minimum stay requirements to attract travellers. Initial room rates, which averaged €342 per night, have now fallen to €258 per night. This is a significant drop compared to previous months, when prices were 70 per cent higher than in July 2023.</span></p>
<p><span style="font-weight: 400;">Low attendance and concerns about high prices and security have resulted in lower than expected demand for accommodation during the Games. In response, hoteliers are offering discounts of up to 70 per cent and lifting restrictions on arrival dates and length of stay. Accor has revised its forecasts, anticipating lower profits than previously expected. Although some luxury hotels are still maintaining high prices, the general trend is towards falling costs and flexibility in offers to attract recent travellers. Investors have reacted very negatively to the news: after earlier difficult months, the company's shares have fallen a further 4 per cent since the Olympics began. They are now already 30.8 per cent below their 2015 peaks.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Accor_31.07.png" alt="Accor chart" /></p>
<p><em><span style="font-weight: 400;">Source: Tradingview</span></em></p>
<h2 id="heading-scroll3"><strong>What does the future hold for the CAC40 index?</strong></h2>
<p><span style="font-weight: 400;">Let us recall the basic rule of investing according to New York University Professor Aswath Damodaran: ‘Keep your eyes on the price’, as even the best company that you overpay for may turn out to be a bad investment. Therefore, let's check how much the CAC40 might be worth based on earnings forecasts. Over the past 10 years, this index has generated an average annual return of 7 per cent.</span></p>
<p><span style="font-weight: 400;">Let's use the average annual return on the S&P 500 index, which has been 8.9 per cent over the past 10 years, as a discount rate.</span></p>
<p><span style="font-weight: 400;">In terms of earnings, let us assume that French companies continue to reinvest an average of 25 per cent of their profits, and with an average return on equity (ROE) of 13 per cent. As a result, the expected rate of earnings growth in the coming years would be 3.3 per cent. We can then conclude that the current value of the index is 31 per cent above its intrinsic value.</span></p>
<p><span style="font-weight: 400;">This means that French companies may have a difficult time generating a better return for investors than their US counterparts.</span></p>
<p><em><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/tabela_wycena_CAC40_ENG_31.07.png" alt="Valuation CAC40" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia own analysis</span></em></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>forex conotoxia.comWed, 31 Jul 2024 09:55:00 +0200The opening ceremony of the XXXIII Summer Olympics Paris 2024 kicked off on 26 July. Unfortunately, the scandal at the ceremony, involving a parody of the Christian ‘Last Supper’, has caused controversy instead of general delight. Relatively high ticket...Next week to watch (29.07 – 2.08.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-29-07-2-08-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-29-07-2-08-2024On 24 July, one of the worst stock market sessions in months took place: the S&P 500 index fell by 2.3 per cent and the Nasdaq 100 by 3.6 per cent. Both indices are now 4.7 per cent and 9 per cent below their respective peaks. Nonetheless, the financial performance of companies is positive: 56 per cent of the largest companies reported higher sales in the second quarter and 78 per cent achieved profits above expectations. Most US companies, especially in the financial sector, are doing well. The current declines may be a reaction to the Microsoft systems blackout and the realisation of profits after a long rise in the indices.
In the coming week we will learn the key decisions on interest rates. First up will be the Bank of Japan's stance, around which expectations of another interest rate hike are growing. This has caused the USD/JPY to plunge nearly 6 per cent and fall to the lows of May, forcing market participants to abandon their existing strategies, increasing volatility and making the correction feel like an avalanche.
On Wednesday, we will learn the FOMC decision on US interest rates, which will be the main event of the week for investors. The following day, their attention may be captured by the Bank of England's decision.<h3><strong>Table of contents:</strong></h3>
<ol>
<li><a href="#heading-scroll1">Japan interest rate decision</a></li>
<li><a href="#heading-scroll2">US interest rate decision</a></li>
<li><a href="#heading-scroll3">UK interest rate decision</a></li>
</ol>
<h2 id="heading-scroll1"><strong>Wednesday, 31.07, 5:00 CET, Japan interest rate decision</strong></h2>
<p><span style="font-weight: 400;">The Bank of Japan kept the key short-term interest rate at 0-0.1 per cent at its June meeting, which was in line with expectations. The board signalled the possibility of tapering bond purchases at its July meeting, which was voted 8 to 1. The Bank is currently buying about 6 billion yen worth of bonds per month. The latest statement pointed to a moderate recovery in Japan's economy, with resilient private consumption thanks to better business profits and spending, with exports and public investment flat. Annual inflation was 2-2.5 per cent, with a slight increase in inflation expectations.</span></p>
<p><span style="font-weight: 400;">Analysts' forecast is for another interest rate hike, to 0.25 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_Japonia_26.07.png" alt="chart of interest rates in Japan" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected interest rate could be bullish for the JPY, while a lower-than-expected interest rate could act bearishly on the JPY.</span></p>
<p><strong>Impact: EUR/JPY, USD/JPY</strong></p>
<h2 id="heading-scroll2"><strong>Wednesday, 31.07, 20:30 CET, US interest rate decision</strong></h2>
<p><span style="font-weight: 400;">The Federal Reserve kept interest rates at 5.25-5.50 per cent in June, in line with forecasts. The FedWatch tool indicates a 93.3 per cent probability that rates will be held at the next meeting in July. The market is pricing the first rate cut in September with 100 per cent certainty, which could significantly impact markets.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_USA_26.07.png" alt="US interest rate graph" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected interest rate could be bullish for the USD, while a lower-than-expected interest rate could act bearishly on the USD.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN</strong></p>
<h2 id="heading-scroll3"><strong>Thursday, 1.08, 13:00 CET, UK interest rate decision</strong></h2>
<p><span style="font-weight: 400;">The Bank of England kept its main interest rate at 5.25 per cent in June, in line with expectations. Institution officials ruled that it was a ‘finely balanced’ decision. Inflation fell to the 2 per cent target thanks to lower energy prices and moderate inflation expectations. Although a decline in GDP has been avoided, it continues to hover around zero. </span></p>
<p><span style="font-weight: 400;">However, current analysts' forecasts already assume a first cut to 5 per cent at the next meeting.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_UK_26.07.png" alt="UK interest rate graph" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected interest rate could be bullish for GBP, while a lower-than-expected interest rate could act bearishly on GBP.</span></p>
<p><strong>Impact: EUR/GBP, GBP/USD, GBP/PLN</strong></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>forex conotoxia.comFri, 26 Jul 2024 13:36:00 +0200On 24 July, one of the worst stock market sessions in months took place: the S&P 500 index fell by 2.3 per cent and the Nasdaq 100 by 3.6 per cent. Both indices are now 4.7 per cent and 9 per cent below their respective peaks. Nonetheless, the financial...Why are the SPX and Nasdaq 100 indexes falling?https://invest.conotoxia.com/investment-research/comments/why-are-the-spx-and-nasdaq-100-indexes-fallinghttps://invest.conotoxia.com/investment-research/comments/why-are-the-spx-and-nasdaq-100-indexes-fallingWednesday 24 July saw one of the worst stock market sessions in many quarters. The main index, the S&P 500, fell by 2.3 per cent, while the technology index, the Nasdaq 100, slid by as much as 3.6 per cent. Both indices are now 4.3 per cent and 8 per cent below their respective peaks. However, if we look at the financial results of the largest companies for the second quarter of this year, we can see that 56 per cent of them reported higher sales than expectations and as many as 78 per cent achieved better profit than forecast. Hence, the current decline seems more like a realisation of gains in earnings expectations than a cause for deeper concern. Let us therefore take a look at the situation of the most interesting companies that have shown financial statements so far.<h3><strong>Table of contents:</strong></h3>
<ol>
<li><a href="#heading-scroll1">Banking sector</a></li>
<li><a href="#heading-scroll2">Google</a></li>
<li><a href="#heading-scroll3">Tesla</a></li>
<li><a href="#heading-scroll4">Conclusions</a></li>
</ol>
<h2 id="heading-scroll1"><strong>Banking sector</strong></h2>
<p><span style="font-weight: 400;">Eight of the largest US banks reported higher net profits and revenues than analysts' expectations. Six of them saw an increase in net profits. Goldman Sachs bank had the largest increase in net profits of 150 per cent, whose shares are nevertheless trading down almost 5 per cent from their peaks.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_GS_25.07.png" alt="Goldman Sachs chart" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, GS, Daily</span></em></p>
<p><span style="font-weight: 400;">The ratio of large US banks' equity to loans and other liabilities, the so-called CET1, is at relatively high levels and does not go below 10 per cent. By comparison, the average value of this ratio during the 2008 financial crisis was in the range of 5-5.5 per cent. This means that the security of the US banking sector is relatively high.</span></p>
<h2 id="heading-scroll2"><strong>Google</strong></h2>
<p><span style="font-weight: 400;">One of the most important financial releases this year is the financial results of technology giant Alphabet (Google). The figures show significant growth compared to the same period last year. The company's revenue increased by 14 per cent year-on-year. The operating profit margin increased from an already high 29 per cent last year to 32 per cent. Finally, net profit growth was 28 per cent. Google search ad revenue accounted for as much as 64 per cent of the company's service revenue, while YouTube ad revenue was 11.6 per cent of total revenue. Despite this, Alphabet shares fell from their peaks by almost 10 per cent!</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Alphabet_25.07.png" alt="Alphabet chart" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, Alphabet, Daily</span></em></p>
<p><span style="font-weight: 400;">The company's focus on the development of artificial intelligence (AI) is worth noting. We learned from the report that Alphabet is advancing its AI strategy by consolidating its AI model-building teams. These teams, which were previously part of Google Research in the Google Services segment, have now been integrated into Google DeepMind. The aim is to accelerate progress in AI. Alphabet is using its long-term infrastructure strategy and internal research teams to maintain a strong position as AI technology evolves.</span></p>
<h2 id="heading-scroll3"><strong>Tesla</strong></h2>
<p><span style="font-weight: 400;">Perhaps the biggest surprise was the results of Tesla, whose shares fell 12.3 per cent during Wednesday's trading session following the announcement of its financial results. Tesla's Q2 2024 profit fell more than 40 per cent compared to 2023, reflecting increasing competition in the EV market (particularly from China) and slowing EV sales growth. Tesla's financial results were not in line with analysts' forecasts, which overestimated the profit generated by the company in Q2 2024.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Tesla_25.07.png" alt="Tesla chart" /></p>
<p><span style="font-weight: 400;">Source</span><em><span style="font-weight: 400;">: Conotoxia MT5, Tesla, Daily</span></em></p>
<p><span style="font-weight: 400;">However, Elom Musk has criticised the quality of competitors' vehicles, saying they are only a short-term problem for the company. He also announced that details of the autonomous robotaxi will be revealed in October instead of the planned August. Musk still believes that full autonomisation of the vehicles is possible by the end of this year or early next year. In doing so, he admitted that his earlier predictions were too optimistic.</span></p>
<h2 id="heading-scroll4"><strong>Conclusions</strong></h2>
<p><span style="font-weight: 400;">No major problems are currently evident in most US companies. The financial sector, which was of great concern as recently as last year, is doing remarkably well. As many as 78 per cent of the largest companies published better financial results than forecast. Consequently, the current market declines may be a reaction to last week's blackout of Microsoft's systems and the realisation of some of the gains by investors after a prolonged rise in the indices.</span></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>forex conotoxia.comThu, 25 Jul 2024 15:45:00 +0200Wednesday 24 July saw one of the worst stock market sessions in many quarters. The main index, the S&P 500, fell by 2.3 per cent, while the technology index, the Nasdaq 100, slid by as much as 3.6 per cent. Both indices are now 4.3 per cent and 8 per ce...ETH ETFs: the debut of ETFs on Ethereum. Why is the market reacting negatively?https://invest.conotoxia.com/investment-research/comments/eth-etfs-the-debut-of-etfs-on-ethereum-why-is-the-market-reacting-negativelyhttps://invest.conotoxia.com/investment-research/comments/eth-etfs-the-debut-of-etfs-on-ethereum-why-is-the-market-reacting-negativelyYesterday , the listing of Ethereum ETFs in the United States took off. On the first day, after an initial spike in volatility, the price of the cryptocurrency eventually fell by 1.7%. Recent weeks have also been very volatile for ETH, but also for the market as a whole, which has fluctuated by up to 20% in both directions. Let's take a look at why this happened and what we can expect next in the crypto market. <h3><strong>Table of contents:</strong></h3>
<ol>
<li><a href="#heading-scroll1">Why has no new capital flowed into the market?</a></li>
<li><a href="#heading-scroll2">Ethereum ETFs are not new!</a></li>
<li><a href="#heading-scroll3">Conclusions</a></li>
</ol>
<h2 id="heading-scroll1"><strong>Why has no new capital flowed into the market?</strong></h2>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_ETH_24.07.png" alt="ETH chart" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, ETHUSD, H1</span></em></p>
<p> </p>
<p><span style="font-weight: 400;">On the first day of trading, ETH ETFs generated $1.07 billion worth of transactions. However, if we look at the inflow of new capital into the funds, we see that Ethereum ETFs recorded $106.6 million net, which is more than six times lower compared to $655.3 million on the first day of trading for Bitcoin ETFs.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_BTC_24.07.png" alt="BTC chart" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia Own analysis</span></em></p>
<p><span style="font-weight: 400;">It is worth remembering that after the launch of Bitcoin ETFs, despite the influx of new capital, the cryptocurrency saw an almost 18% decline, followed by an almost 100% rally. It is possible that we will see a similar relationship for Ethereum ETFs.</span></p>
<h2 id="heading-scroll2"><strong>Ethereum ETFs are not new!</strong></h2>
<p><span style="font-weight: 400;">Although the first ETFs for ‘physical’ cryptocurrencies launched in Europe as early as 2019, the market only started to react particularly strongly to them after the US SEC approved funds for bitcoin. The approved ETFs, including products from companies such as 21Shares, Franklin Templeton, Bitwise, Fidelity, Invesco, BlackRock and VanEck, will be based on the current price of Ethereum. Management fees range from 0.15 to 0.25%, although some funds offer reduced fees during the initial period.</span></p>
<p><span style="font-weight: 400;">The biggest downside of the currently introduced ETFs is the SEC's decision not to allow the use of the ‘staking’ mechanism - crucial to the Ethereum blockchain. Staking would allow users to earn rewards in the form of new ETH tokens, resulting in an annual return of around 3%. However, ETFs can only hold ether without staking, which does not provide investors with additional returns. This makes these funds inferior to some European and Hong Kong ETFs. Nonetheless, this is still a significant development for this market, as it allows US mutual funds and financial institutions to share in the volatility in the cryptocurrency market.</span></p>
<h2 id="heading-scroll3"><strong>Conclusions</strong></h2>
<p><span style="font-weight: 400;">Ultimately, although ether ETFs may not attract as much flow as bitcoin funds, they represent an important step in the development of the cryptocurrency market. They offer investors access to Ethereum's infrastructure, which could influence their future value and the acceptance of more ETFs.</span></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>forex conotoxia.comWed, 24 Jul 2024 13:07:00 +0200Yesterday (23.07), the listing of Ethereum ETFs in the United States took off. On the first day, after an initial spike in volatility, the price of the cryptocurrency eventually fell by 1.7%. Recent weeks have also been very volatile for ETH, but also f...Next week to watch (22-26.07.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-22-26-07-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-22-26-07-2024What a week! For the first half, the markets lived with the attempted assassination of the former US president. Just when it seemed that nothing stronger would happen, on the night of Thursday to Friday we experienced the first ever global Microsoft ‘blackout’. The failure demonstrated the fragility of modern technology systems and our dependence on one company, paralysing banks, stock exchanges, airports and causing chaos.
Yesterday, we learned that the current US president is stepping down from running for re-election. His decision did not provoke a strong reaction in most financial markets, but there was noticeable movement in the cryptocurrency market, where the bitcoin exchange rate first fell by 2.5 per cent and then rose by 4 per cent.
Investors can now focus on US foreign policy, particularly Donald Trump's protectionist practices. His statements caused the iShares Semiconductor ETF to fall by 11.5 per cent and the Nikkei 225 index by 7 per cent. Joe Biden's decision is positive for emerging markets, and the lack of a strong reaction is due to earlier speculation and anticipation of the nomination of Kamala Harris. After Biden's poor performance in the pre-election debate and the sweep of the Republican candidate, the odds of Trump's return rose from 52 per cent to 69 per cent, but Harris' endorsement lowered them to 60 per cent.
This week we will know the Bank of Canada's interest rate decision and GDP and PCE inflation readings from the US.<h3><strong>Table of contents:</strong></h3>
<ol>
<li><a href="#heading-scroll1">Canada's interest rate decision</a></li>
<li><a href="#heading-scroll2">US gross domestic product (GDP) annualised (Q2).</a></li>
<li><a href="#heading-scroll3">US consumer spending index (PCE) annualised (June)</a></li>
</ol>
<h2 id="heading-scroll1"><strong>Wednesday, 24.07, 15:45 CET, Canada's interest rate decision</strong></h2>
<p><span style="font-weight: 400;">The Bank of Canada cut its main interest rate by 25 basis points in June, to 4.75 per cent, and signalled further reductions if inflation falls as expected. Inflation currently stands at 2.7 per cent, and the bank is confident that disinflation is approaching the 2 per cent target.</span></p>
<p><span style="font-weight: 400;">The current analyst forecast is for interest rates to remain at 4.75 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_Kanada_22.07.png" alt="interest rate chart Canada" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected interest rate could be bullish for CAD, while a lower-than-expected interest rate could act bearishly on CAD.</span></p>
<p><strong>Impact: EUR/CAD, USD/CAD</strong></p>
<h2 id="heading-scroll2"><strong>Thursday, 25.07, 14:30 CET, US gross domestic product (GDP) annualised (Q2).</strong></h2>
<p><span style="font-weight: 400;">The US economy grew at an annualised rate of 1.4 per cent in Q1. Investment was revised upwards to 4.4 per cent, with increases in structures, equipment and intellectual property products. Residential investment rose above expectations to 16 per cent, exports rose 1.6 per cent and imports were revised downwards to 6.1 per cent. Government spending was revised upwards to 1.8 per cent, while consumer spending slowed to 1.5 per cent, with declines in consumption of goods and services.</span></p>
<p><span style="font-weight: 400;">Analysts' current forecast is for GDP to grow to 2 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_USD_22.07.png" alt="graph of US GDP" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN, US500</strong></p>
<h2 id="heading-scroll3"><strong>Friday, 26.07, 14:30 CET, US consumer spending index (PCE) annualised (June)</strong></h2>
<p><span style="font-weight: 400;">The annual US PCE inflation rate fell from 2.7 to 2.6 per cent in May this year, which was in line with market forecasts. By comparison, the annual change in the US PCE price index has averaged 3.30 per cent since 1960, reaching an all-time high of 11.60 per cent in March 1980 and a record low of 1.47 per cent in July 2009.</span></p>
<p><span style="font-weight: 400;">Analysts' current forecast is for a gentle decline in inflation to 2.5 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_USA_22.07.png" alt="PCE inflation graph" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN</strong></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
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</div>forex conotoxia.comMon, 22 Jul 2024 12:55:00 +0200What a week! For the first half, the markets lived with the attempted assassination of the former US president. Just when it seemed that nothing stronger would happen, on the night of Thursday to Friday we experienced the first ever global Microsoft ‘bl...Why are companies delisting from the stock markets?https://invest.conotoxia.com/investment-research/comments/why-are-companies-delisting-from-the-stock-marketshttps://invest.conotoxia.com/investment-research/comments/why-are-companies-delisting-from-the-stock-marketsIn today's dynamic and often unpredictable economic environment, more and more companies are choosing to delist their shares. This process, known as delisting, can be dictated by a variety of factors - from strategic management changes to financial reorganisation to a desire to avoid costs and formal requirements. While going public is often seen as a step towards greater transparency and prestige, leaving the stock market can bring companies a number of benefits that outweigh the potential losses. We will look at the main reasons why companies choose to take this step and examples.<h3><strong>Table of contents:</strong></h3>
<ol>
<li><a href="#heading-scroll1">Acquisition or merger transactions</a></li>
<li><a href="#heading-scroll2">Going private</a></li>
<li><a href="#heading-scroll3">Hostile takeover</a></li>
</ol>
<h2 id="heading-scroll1"><strong>Acquisition or merger transactions</strong></h2>
<p><span style="font-weight: 400;">Currently a high-profile case on the Polish stock market is the planned withdrawal of Comarch. The Luxembourg private equity fund CVC Capital Partners, through its company Aspa sp. z o.o., is planning to buy 100 per cent of the company's shares. This fund is known for its high-profile acquisition of the Żabka Polska chain. The reason companies are taken out of the public market is mainly due to mergers and acquisitions, as acquiring companies see great potential in their targets, which seems to be the case with CVC. When a company is acquired by another company, it is often pulled off the stock market, thus becoming a private company.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_conarch_19.07.png" alt="Comarch chart" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingview</span></em></p>
<h2 id="heading-scroll2"><strong>Going private</strong></h2>
<p><span style="font-weight: 400;">Another reason may be the buy-back of shares by the current owners, known as going private, which enables them to reduce the administrative costs of being a listed company and to comply with information requirements that can be used by competitors. The owners of the company may choose to buy back all the shares from investors and turn the company into a private entity.</span></p>
<p><span style="font-weight: 400;">An unpalatable reason for investors, but one that is quite often observed on the Polish market, may, however, be the withdrawal of a company when its current capitalisation is significantly undervalued in relation to its assets. An example would be a situation where the value of the assets is $1 and they can be acquired for 40 cents. A similar, albeit more legally complicated, situation is currently being observed by investors in Kernel Holding, which operates in Ukraine.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Kernel_19.07.png" alt="Kernel Holding chart" /></p>
<p><em><span style="font-weight: 400;">Source: Tradingview</span></em></p>
<h2 id="heading-scroll3"><strong>Hostile takeover</strong></h2>
<p><span style="font-weight: 400;">A common reason for companies to delist from the US stock market until some time ago were so-called hostile takeovers, i.e. situations where companies were acquired by competitors in the same industry or even by their own managements. Because there are few restrictions on the purchase of shares of public companies in regulated markets, both independent investors and competitors can purchase their shares. When a significant proportion of a company's shares are publicly traded, as is the case with many US companies, there is a risk that they may be acquired by competitors, who may thus take control of the company.</span></p>
<p><span style="font-weight: 400;">One of the more famous examples of a hostile takeover is the situation with RJR Nabisco in 1988. The story became the canon of the film ‘Barbarians at the Gate’. RJR Nabisco. The conglomerate formed by the merger of tobacco company R.J. Reynolds Tobacco Company and food company Nabisco was the target of a management buyout (MBO) announced by chairman Ross Johnson. Johnson's plans attracted the attention of a number of investors, setting off an intense bidding battle. This acquisition, which was the largest leveraged buyout (LBO) in history, also became a symbol of the aggressive takeovers of the 1980s.</span></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>forex conotoxia.comFri, 19 Jul 2024 09:09:00 +0200In today's dynamic and often unpredictable economic environment, more and more companies are choosing to delist their shares. This process, known as delisting, can be dictated by a variety of factors - from strategic management changes to financial reor...Dollar, gold, bitcoin, bonds after Trump's coup: what to expect?https://invest.conotoxia.com/investment-research/comments/dollar-gold-bitcoin-bonds-after-trump-s-coup-what-to-expecthttps://invest.conotoxia.com/investment-research/comments/dollar-gold-bitcoin-bonds-after-trump-s-coup-what-to-expectFollowing the failed assassination attempt on Donald Trump, financial markets reacted in a variety of ways. Fortunately, the worst-case scenario, which would most likely have led to a market collapse, was avoided. Let's take a look at how individual assets reacted to the event and what impact it may have on the stock market.<h3><strong>Table of contents:</strong></h3>
<ol>
<li><a href="#heading-scroll1">Stock, gold and bond markets calm after coup attempt</a></li>
<li><a href="#heading-scroll2">Cryptocurrency market boom</a></li>
<li><a href="#heading-scroll3">What can we expect?</a></li>
</ol>
<h2 id="heading-scroll1"><strong>Stock, gold and bond markets calm after coup attempt</strong></h2>
<p><span style="font-weight: 400;">The failed assassination attempt on Donald Trump has increased investor expectations of his victory in the presidential election. Polls prior to the assassination attempt were already giving Trump a lead over Joe Biden, with bookmakers increasing his odds of winning to 73 per cent. Biden is facing criticism within his own party. There is speculation about the possibility of a replacement candidate, but even that may not be enough to defeat Trump.</span></p>
<p><span style="font-weight: 400;">The Republican candidate's growing chances are being met with moderate reactions from the markets. The main US S&P 500 index opened Monday up 0.4 per cent, earlier in the day the UK's FTSE 100 index opened down 0.5 per cent from Friday's close, France's CAC 40 fell 0.8 per cent and Germany's DAX lost 0.2 per cent.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_US500_16.07.png" alt="US500 chart" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, US500, H4</span></em></p>
<p><span style="font-weight: 400;">The gold price remained relatively stable, gaining 1.2 per cent from Friday's close. It seems that the assassination attempt should not have a key impact on the price movements of bullion considered a ‘safe haven’. This is most likely because an extreme scenario was avoided.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_z%C5%82oto_16.07.png" alt="gold chart" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, XAUUSD, H4</span></em></p>
<p><span style="font-weight: 400;">The situation in the US bond market is similar. After an initial symbolic rise of 0.3 per cent, they are now 0.7 per cent below Friday's close. This means that the market is not reacting negatively to the increased chances of Trump winning.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_TLT_16.07.png" alt="TLT chart" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, TLT, Daily</span></em></p>
<h2 id="heading-scroll2"><strong>Cryptocurrency market boom</strong></h2>
<p><span style="font-weight: 400;">After Donald Trump's failed coup, the value of bitcoin rose, reaching a two-week high above the US$63,000 level, an increase of almost 10 per cent. Trump, who has recently begun to portray himself as cryptocurrency-friendly, is due to speak at a conference on bitcoin this month. Investors expect his presidency to bring beneficial regulation to the cryptocurrency market. Despite his earlier scepticism, Trump now accepts donations from the crypto industry and seeks to differentiate himself from Democrats who are in favour of tighter regulation.</span></p>
<p><span style="font-weight: 400;">Such a scenario could positively impact bitcoin and other cryptocurrencies in the coming weeks. We are currently in a slump in the previously booming capital inflows into this market. This can be measured by stablecoin capitalisation, which has almost frozen over the past two months.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_BTCUSD_16.07.png" alt="BTCUSD chart" /></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, BTCUSD, Daily</span></em></p>
<h2 id="heading-scroll3"><strong>What can we expect?</strong></h2>
<p><span style="font-weight: 400;">The probability of a Trump win has increased significantly, and the consolidation of one trend could positively affect stock indices and cryptocurrencies in the coming weeks. In the case of assets considered to be safe havens, such as gold or bonds, this event should not have a major impact on listings, as their fluctuations are caused by, among other things, an increase in uncertainty and a negative shock, which we are not seeing in this case.</span><span style="font-weight: 400;"><br /><br /></span></p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>forex conotoxia.comTue, 16 Jul 2024 15:12:00 +0200Following the failed assassination attempt on Donald Trump, financial markets reacted in a variety of ways. Fortunately, the worst-case scenario, which would most likely have led to a market collapse, was avoided. Let's take a look at how individual ass..."InvestTrends", the quarterly investment magazine from Conotoxiahttps://invest.conotoxia.com/investment-research/research-articles/investtrends-the-quarterly-investment-magazine-from-conotoxiahttps://invest.conotoxia.com/investment-research/research-articles/investtrends-the-quarterly-investment-magazine-from-conotoxiaInvestTrends Q3 2024 is only in Polish version
In today's dynamic times, understanding market trends becomes crucial for every investor. "InvestTrends Q3 2024", the latest quarterly report from the experts at Conotoxia Ltd, provides not only in-depth analysis on current market developments, but also strategies that can help you make more effective investment decisions. See what we write about in the latest release.<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_ENG_16.07.jpg" alt="InvestTrends" /></p>
<h3><strong>Table of contents:</strong></h3>
<ol>
<li><a href="#heading-scroll1">Investment strategies for Q3 2024.</a></li>
<li><a href="#heading-scroll2">What to expect from Q3?</a></li>
<li><a href="#heading-scroll3">Download the report in Polish</a></li>
</ol>
<p> </p>
<p><span style="font-weight: 400;">Insights into key markets and assets</span></p>
<p> </p>
<p><span style="font-weight: 400;">"InvestTrends Q3 2024" includes analysis and provides answers to questions on the following topics:</span></p>
<h2 id="heading-scroll1"><strong>Investment strategies for Q3 2024.</strong></h2>
<ul>
<li style="font-weight: 400;" aria-level="1"><strong>When to walk away from the table? </strong></li>
<ul>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">What bets affect our investment performance?</span></li>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">Can adding randomness, such as a coin flip, improve our investment decisions?</span></li>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">What might be the consequences of changing strategy during a game?</span></li>
</ul>
<li style="font-weight: 400;" aria-level="1"><strong>Price gaps. How can we apply them to trading? </strong></li>
<ul>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">Why is the phenomenon of 'closing' price gaps important for traders?</span></li>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">How do differences in the frequency and propensity to close price gaps between the S&P 500, Nasdaq 100 and DAX 40 affect trading strategies?</span></li>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">What does a high frequency of price gaps in an index mean? How does this affect trend setting?</span></li>
</ul>
<li style="font-weight: 400;" aria-level="1"><strong>How to take advantage of volatility in the markets? Small steps strategy.</strong></li>
<ul>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">What are the key advantages of a "small steps" strategy?</span></li>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">Why is avoiding excessive leverage and hedging against losses important?</span></li>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">How does the volatility of different assets affect the timing of closing positions?</span></li>
</ul>
<li style="font-weight: 400;" aria-level="1"><strong>Warren Buffett's investment strategy.</strong></li>
<ul>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">Why is Buffett sitting on cash?</span></li>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">What does Buffett invest in?</span></li>
</ul>
</ul>
<h2 id="heading-scroll2"><strong>What to expect from Q3?</strong></h2>
<ul>
<li style="font-weight: 400;" aria-level="1"><strong>Top 5 fastest growing exchanges of 2024. </strong></li>
<ul>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">Which markets are gaining the most from artificial intelligence developments?</span></li>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">What is driving the growth of each market?</span></li>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">What can we expect in the coming weeks?</span></li>
</ul>
<li style="font-weight: 400;" aria-level="1"><strong>Are we seeing an investment bubble again on the Nasdaq 100?</strong></li>
<ul>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">Are we experiencing an investment bubble?</span></li>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">What are the differences between the current situation on the Nasdaq 100 and the internet bubble?</span></li>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">What are the predictions for the impact of artificial intelligence on the earnings of Nasdaq 100 companies?</span></li>
</ul>
<li style="font-weight: 400;" aria-level="1"><strong>This company is at the forefront of the semiconductor revolution thanks to billions in support from the US!</strong></li>
<ul>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">What is the significance of President Joe Biden's administration's support for semiconductor manufacturing in the US?</span></li>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">How does the production of chips down to 7 nanometres in size contribute to the development of artificial intelligence?</span></li>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">What are the profit growth forecasts for semiconductor sector stocks for the coming years?</span></li>
</ul>
<li style="font-weight: 400;" aria-level="1"><strong>Gold or bitcoin - which might be a better investment in the event of an escalation of geopolitical conflict?</strong></li>
<ul>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">Why do we consider gold as a 'safe haven' in times of geopolitical uncertainty?</span></li>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">Will gold and bitcoin really protect us from the outbreak of armed conflict?</span></li>
</ul>
<li style="font-weight: 400;" aria-level="1"><strong>When will we break through the maximum levels on bitcoin and other cryptocurrencies?</strong></li>
<ul>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">What factors are likely to accelerate further price increases in bitcoin and ethereum in the second half of 2024?</span></li>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">Are we currently seeing an inflow or outflow of capital into the cryptocurrency market?</span></li>
</ul>
<li style="font-weight: 400;" aria-level="1"><strong>Gold price at peaks. When will the increases end? </strong></li>
<ul>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">What geopolitical factors are likely to further influence the rise of the gold price in the coming months?</span></li>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">Is gold really rising due to inflation?</span></li>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">Do central banks continue to buy gold?</span></li>
</ul>
<li style="font-weight: 400;" aria-level="1"><strong>The euro, the dollar and gold </strong></li>
<ul>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">What does the gold exchange rate depend on?</span></li>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">What are the main differences in monetary policy approaches between the European Central Bank and the Federal Reserve in the US?</span></li>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">What are the forecasts for the future development of the EUR/USD, EUR/PLN and USD/PLN exchange rates?</span></li>
</ul>
<li style="font-weight: 400;" aria-level="1"><strong>OPEC maintains its oil shortage forecasts</strong></li>
<ul>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">What factors have driven up the oil price in the first half of the year?</span></li>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">OPEC's oil market forecasts.</span></li>
<li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">What are the main factors contributing to scepticism about OPEC's oil market forecasts?</span></li>
</ul>
</ul>
<p><span style="font-weight: 400;">"InvestTrends is an indispensable resource for anyone who wants to better understand and respond more effectively to changing conditions in global financial markets. Don't miss this opportunity and download the report today. </span><strong>The report is in Polish only!</strong></p>
<h2 id="heading-scroll3"><a href="https://magazyn-invest.cinkciarz.pl/">Download the report in Polish</a></h2>
<p> </p>
<p> </p>forex conotoxia.comTue, 16 Jul 2024 12:23:00 +0200InvestTrends Q3 2024 is only in Polish version
In today's dynamic times, understanding market trends becomes crucial for every investor. "InvestTrends Q3 2024", the latest quarterly report from the experts at Conotoxia Ltd, provides not only in-depth...Next week to watch (15 – 19.07.)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-15-19-07https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-15-19-07Yesterday, the US inflation data pleased investors, coming out lower than expected at 3.0 per cent and falling for the third consecutive month. This boosted the US stock indices to new record highs as the possibility of the first interest rate cut in September strengthened. Meanwhile, Germany’s CPI was reported as expected at 2.2 per cent which was a 0.2 per cent drop compared to the previous month. Next week, we may follow the UK and the Euro Area’s inflation data, which may have an impact on the upcoming interest rate decision on Thursday. <h3><strong>Table of Contents:</strong></h3>
<ol>
<li><a href="#heading-scroll1">China Gross Domestic Product (GDP) YoY (2Q)</a></li>
<li><a href="#heading-scroll2">UK Consumer Price Index (CPI) YoY (June)</a></li>
<li><a href="#heading-scroll3">Euro Area Consumer Price Index (CPI) YoY (June)</a></li>
<li><a href="#heading-scroll4">Euro Area Interest Rate Decision</a></li>
</ol>
<p><br /><br /></p>
<h3><strong>Monday 15.07. 04:00 CET, China Gross Domestic Product (GDP) YoY (2Q)</strong></h3>
<p><span style="font-weight: 400;">The Chinese economy showed robust growth in the first quarter of 2024, expanding by 5.3 per cent year-on-year, beating forecasts of 5.0 per cent. This growth outpaced the 5.2 per cent expansion in the previous quarter and marked the most substantial annual growth since Q2 of 2023. The upswing was supported by ongoing stimulus initiatives from Beijing and boosted by spending associated with the Lunar New Year festivities. Fixed investment during this period also surged by 4.5 per cent, the highest rate in nearly a year, exceeding the expected 4.3 per cent. The Chinese economy may have laid a solid groundwork to meet the targeted GDP growth of approximately 5 per cent for the year.</span></p>
<p><span style="font-weight: 400;">Analyst expectations for the Q2 2024 GDP growth in China is 5 per cent. </span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_1_12.07.png" /></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A higher-than-expected reading may have a bullish effect on the CNY, while a lower-than-expected reading could be bearish for the CNY.</span></p>
<p><strong>Impact: USD/CNY, EUR/CNY</strong></p>
<p> </p>
<h3><strong>Wednesday 17.07. 08:00 CET, UK Consumer Price Index (CPI) YoY (June)</strong></h3>
<p><span style="font-weight: 400;">In May 2024, the UK witnessed a slowdown in the annual inflation rate to 2 per cent, the lowest since July 2021, down from 2.3 per cent in April, aligning with predictions. It brought inflation back in line with the Bank of England's 2 per cent target, driven by a deceleration in the prices of food products such as bread, cereals, vegetables, and sweet ones like sugar, jam, syrups, chocolate, and confectionery. Additionally, prices declined for dining out and accommodation (5.8 per cent from 6 per cent) as well as for recreational activities and cultural outings (3.9 per cent vs 4.4 per cent). </span></p>
<p><span style="font-weight: 400;">Service inflation also eased slightly to 5.7 per cent from 5.9 per cent, exceeding the expected 5.5 per cent. Transport costs increased (0.5 per cent from 0.1 per cent), mainly due to higher prices for motor fuels and transportation services, offset by reduced prices for second-hand cars. Core inflation for the same period decreased to 3.5 per cent, the lowest since October 2021, compared to 3.9 per cent in April. The Consumer Price Index rose by 0.3 per cent from the previous month.</span></p>
<p><span style="font-weight: 400;">Analysts expect the inflation rate in the UK to remain unchanged at 2 per cent from the previous month's reading. </span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_2_12%20(1).png" /></p>
<p> </p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>Impact: USD/GBP, EUR/GBP</strong></p>
<p> </p>
<h3><strong>Wednesday 17.07. 11:00 CET, Euro Area Consumer Price Index (CPI) YoY (June)</strong></h3>
<p><span style="font-weight: 400;">Initial estimates show that the annual inflation rate in the Euro Area dipped to 2.5 per cent in June 2024, following a brief uptick to 2.6 per cent in May, in line with market expectations. Prices increased at a slower rate for food, alcohol, and tobacco (2.5 per cent compared to 2.6 per cent) as well as for energy (0.2 per cent compared to 0.3 per cent). In comparison, inflation remained stable for non-energy industrial goods (at 0.7 per cent) and services (at 4.1 per cent). On a month-to-month basis, the Consumer Price Index (CPI) rose by 0.2 per cent, mirroring the increase observed in May. Meanwhile, core inflation, which excludes energy, food, alcohol, and tobacco, surprisingly held steady at 2.9 per cent annually, defying expectations of a decrease to 2.8 per cent. In the largest economies of the Euro Area, inflation decreased in Germany (2.5 per cent from 2.8 per cent), France (2.5 per cent from 2.6 per cent), Spain (3.5 per cent from 3.8 per cent), and Ireland (1.5 per cent from 2 per cent), but rose in Italy (0.9 per cent from 0.8 per cent) and the Netherlands (3.4 per cent from 2.7 per cent).</span></p>
<p><span style="font-weight: 400;">Analysts' expectations align with the initial estimates of the 2.5 per cent inflation rate in the Euro Area in June. </span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_3_12.07.png" /></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>Impact: EUR/USD, EUR/GBP, EUR/PLN</strong></p>
<p> </p>
<h3><strong>Thursday 18.07. 14:15 CET, Euro Area Interest Rate Decision</strong></h3>
<p><span style="font-weight: 400;">The European Central Bank lowered the Euro Area key interest rate by 25 basis points from 4.50 per cent to 4.25 per cent in June, interrupting the 9-month streak of unchanged rates. However, the ECB officials stressed that it would maintain a meeting-by-meeting and data-driven approach for future rate-cuts decisions. ECB officials also expressed concern about whether the euro area economy would recover as expected, as it may depend largely on a boost to private consumption. Meanwhile, according to the minutes of the June meeting, the available data did not increase policymakers' confidence that Euro Area inflation is on track to reach the 2 per cent target by 2025. </span></p>
<p><span style="font-weight: 400;">Analysts expect the Euro Area's key interest rate to remain unchanged in July. </span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_4_12.07.png" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">A decision on a higher-than-expected interest rate may have a bullish effect on the EUR, while a decision on a lower-than-expected interest rate could be bearish for the EUR.</span></p>
<p><strong>Impact: EUR/USD, EUR/GBP, EUR/PLN</strong></p>
<p> </p>
<p><span style="font-weight: 400;">Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service)</span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79.03 per cent</span></em> <em><span style="font-weight: 400;">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.</span></em></p>forex conotoxia.comFri, 12 Jul 2024 12:46:00 +0200Yesterday, the US inflation data pleased investors, coming out lower than expected at 3.0 per cent (versus 3.1 per cent) and falling for the third consecutive month. This boosted the US stock indices to new record highs as the possibility of the first i...Next week to watch (8-12.07.2024)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-8-12-07-2024https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-8-12-07-2024A week filled with inflation data lies ahead. We will learn CPI readings from the UK, Germany and the US. These are likely to affect the quotations of the major currencies.
In the currency market, the dollar started July with gains, but quickly lost value due to soft comments from the Fed chairman and weak macroeconomic data from the US. As a result, the USD exchange rate fell by the strongest amount in several weeks. USD/PLN fell below 4.0.
In Poland, the Monetary Policy Council left the reference rate unchanged for the ninth consecutive time, keeping it at 5.75 per cent. The National Bank of Poland expects inflation to exceed 5 per cent year-on-year in 2025, pushing back the prospect of interest rate cuts.
The EUR/PLN exchange rate is in the vicinity of 4.30 and EUR/USD has risen above 1.08. Cinkciarz.pl's forecasts for EUR/PLN assume a gradual return to the vicinity of 4.25.<h3><strong>Table of contents:</strong></h3>
<ol>
<li><a href="#heading-scroll1">UK consumer price index (CPI) annualised (June)</a></li>
<li><a href="#heading-scroll2">German consumer price index (CPI) annualised (June)</a></li>
<li><a href="#heading-scroll3">US consumer price index (CPI) annualised (June)</a></li>
</ol>
<h2 id="heading-scroll1"><strong>Thursday, 11.07, 8:00 CET, UK consumer price index (CPI) annualised (June)</strong></h2>
<p><span style="font-weight: 400;">The annual rate of inflation in the UK as forecast fell in May to 2 per cent, the lowest level since July 2021. The slowdown was mainly due to a fall in food prices: bread, cereals, vegetables or sweets, and prices in restaurants, hotels and the leisure sector.</span></p>
<p><span style="font-weight: 400;">The current analysts' forecast is for inflation to remain at 2 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_UK_05.07.png" alt="UK inflation graph" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>Impact: EUR/GBP, GBP/PLN, GBP/USD</strong></p>
<h2 id="heading-scroll2"><strong>Thursday, 11.07, 8:00 CET, German consumer price index (CPI) annualised (June)</strong></h2>
<p><span style="font-weight: 400;">Preliminary readings show that the annual inflation rate in Germany fell to 2.2 per cent in June 2024 from 2.4 per cent in May. The drop in inflation was mainly due to lower energy costs, despite a faster rise in food prices. </span></p>
<p><span style="font-weight: 400;">The current analyst forecast is for inflation to remain at 2.2 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_DE_05.07.png" alt="Inflation chart Germany" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>Impact: EUR/USD, EUR/PLN</strong></p>
<h2 id="heading-scroll3"><strong>Thursday, 11.07, 8:00 CET, US consumer price index (CPI) annualised (June)</strong></h2>
<p><span style="font-weight: 400;">The annual US inflation rate fell to 3.3 per cent in May, the lowest level in three months, compared to 3.4 per cent in April and forecasts of 3.4 per cent. Food, transport and clothing prices fell, while energy costs, including gasoline and heating oil, rose.</span></p>
<p><span style="font-weight: 400;">The current analyst forecast is for inflation to fall to 3.1 per cent.</span></p>
<p><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_US_05.07.png" alt="US inflation graph" /></span></p>
<p><em><span style="font-weight: 400;">Source: Tradingeconomics.com</span></em></p>
<p><span style="font-weight: 400;">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.</span></p>
<p><strong>Impact: EUR/USD, USD/PLN, USD/JPY</strong></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>forex conotoxia.comFri, 05 Jul 2024 12:56:00 +0200A week filled with inflation data lies ahead. We will learn CPI readings from the UK, Germany and the US. These are likely to affect the quotations of the major currencies.
In the currency market, the dollar started July with gains, but quickly lost ...What might be a better investment: gold or miners?https://invest.conotoxia.com/investment-research/comments/what-might-be-a-better-investment-gold-or-minershttps://invest.conotoxia.com/investment-research/comments/what-might-be-a-better-investment-gold-or-minersWe are currently seeing a gap of more than 30 per cent in the share price of the major gold miners relative to the bullion price alone for the past 10 years. This gap has historically almost always been closed. However, is there a basis for this divergence and was it better to invest in gold miners or in bullion itself?<h3><strong>Table of contetns:</strong></h3>
<ol>
<li><a href="#heading-scroll1">Central banks slow down with gold purchases</a></li>
<li><a href="#heading-scroll2">Mining prices are rising along with the price of gold</a></li>
<li><a href="#heading-scroll3">Is it worth investing in gold mining companies?</a></li>
<li><a href="#heading-scroll4">What might be a better investment: gold or miners?</a></li>
</ol>
<h2 id="heading-scroll1">Central banks slow down with gold purchases</h2>
<p><span style="font-weight: 400;">According to the World Gold Council (WGC), the largest buyer of gold in May was the National Bank of Poland (NBP), which purchased around 10 tonnes of gold bullion. Turkey came second (6 tonnes) and India third (4 tonnes). Overall bullion purchases, however, fell to their lowest levels in months.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_1_04.07.png" /></p>
<p><em><span style="font-weight: 400;">Source: WGC</span></em></p>
<p><span style="font-weight: 400;">A similar situation is happening with the largest physical gold ETF, the SPDR Gold Trust ETF (GLD), where we have seen a divergence between gold holdings and price since April 2022. This means that investors are withdrawing their capital from the fund, even though the strong uptrend continues.</span></p>
<p><em><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_2_04.07.png" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: MacroMicro</span></em></p>
<h2 id="heading-scroll2">Mining prices are rising along with the price of gold</h2>
<p><span style="font-weight: 400;">Gold prices are near their historic highs, yet the price of the VanEck Gold Miners ETF (GDX) has noticeably diverged from the bullion price since 2020.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_4_04.07.png" /></p>
<p><em><span style="font-weight: 400;">Source: Tradingview</span></em></p>
<p><span style="font-weight: 400;">The all-in sustaining costs of gold mining (AISC) in Q1 of this year for the top 25 companies in the VanEck Gold Miners ETF (GDX) averaged US$1,365 per ounce and has regularly increased year-on-year. Through this increase, the average margin on gold ounce sales has been increasing slightly in recent quarters, which explains why gold mining company stocks have not performed, all that well during this time.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_6_04.07.png" /></p>
<p><em><span style="font-weight: 400;">Source: Metals Focus Gold Mines Cost Service</span></em><em><span style="font-weight: 400;"><br /><br /></span></em></p>
<p><span style="font-weight: 400;">In the past, the rise in gold prices caused miners' share prices to rise faster than gold itself, but in 2023 this relationship has disconnected. Elevated inflation seems to have severely hampered the miners' dynamic profitability growth.</span></p>
<h2 id="heading-scroll3">Is it worth investing in gold mining companies?</h2>
<p><span style="font-weight: 400;">There is no denying that when investing in mining companies, investors have to consider many factors. High mining costs, inflation and fluctuating gold prices are just some of the challenges. However, it is worth noting that these companies have the potential for significant gains if gold prices continue to rise, especially if they manage to keep costs under control and improve operational efficiency. Another advantage for the miners is the increase in mining in Q1 this year, which was the largest ever, increasing by 4 per cent year-on-year. With margins currently high, this means that the miners' situation could improve significantly in the coming months.</span></p>
<p><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_3_04.07.png" /></p>
<p><em><span style="font-weight: 400;">Source: WGC</span></em></p>
<h2 id="heading-scroll4">What might be a better investment: gold or miners?</h2>
<p><span style="font-weight: 400;">Investing in gold, both in physical form and through ETFs such as the iShares Gold Trust (CHGLD), can be an attractive option in the face of economic uncertainty and inflation. Considered a safe haven, gold has historically protected investors' capital well against inflation and financial market volatility, rising at an average annual rate of 7.5 per cent since 1972. It has therefore achieved a similar return to the nominally major US S&P 500 index.</span></p>
<p><span style="font-weight: 400;">Investments in industrial companies, which in theory should provide a kind of leverage to the gold price, which depends on the extraction costs (AISC) per ounce, can be more volatile. While the volatility of mining stocks has indeed been higher than the gold price, the total return since 2014, when the VanEck Gold Miners ETF (GDX) was created, has been worse than gold at 44 per cent (including dividends), compared to a 77 per cent increase in the gold price. In the coming quarters, however, mining companies may surprise positively with results, which may allow the gap to close.</span></p>
<p><em><span style="font-weight: 400;"><img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_5_04.07.png" /></span></em></p>
<p><em><span style="font-weight: 400;">Source: Conotoxia MT5, GDX, Daily</span></em></p>
<p> </p>
<p><span style="text-decoration: underline;"><span style="font-weight: 400;">Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)</span></span></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>
<p><em><span style="font-weight: 400;">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.</span></em></p>forex conotoxia.comThu, 04 Jul 2024 13:48:00 +0200We are currently seeing a gap of more than 30 per cent in the share price of the major gold miners relative to the bullion price alone for the past 10 years. This gap has historically almost always been closed. However, is there a basis for this diverge...