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Cinkciarz.pl, Cinkciarz, analizy walutowe, komentarze walutowe, marcin lipka, kurs franka, kurs dolara, kurs euroForex conotoxia.comhttps://invest.conotoxia.com/img/logo/podcast_itunes.pnghttps://invest.conotoxia.com/articles/rss/investment-research/commentsFor the first time in a year and a half, the amount of capital in the cryptocurrency market is growing. What does this mean for BTC?https://invest.conotoxia.com/investment-research/comments/for-the-first-time-in-a-year-and-a-half-the-amount-of-capital-in-the-cryptocurrency-market-is-growing-what-does-this-mean-for-btchttps://invest.conotoxia.com/investment-research/comments/for-the-first-time-in-a-year-and-a-half-the-amount-of-capital-in-the-cryptocurrency-market-is-growing-what-does-this-mean-for-btcStablecoins are cryptocurrencies that are designed to mirror the value of other assets, such as US dollars, allowing us to store funds without having to withdraw them from digital wallets. We can think of them as a form of cash for investment in the cryptocurrency market. By looking at their number, we are able to assess whether or not more funds are currently available for investment in this market. The number of stablecoins has been continuously decreasing since May 2022, dropping by 33.6%. November, however, is the first month in 1.5 years in which we notice an increase of 3.4%. What could be the consequences of this for the cryptocurrency market as a whole?<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">What does the increase in stablecoin mean?</a></li> <li><a href="#heading-scroll2">Chances of a new bull market in BTC are growing</a></li> </ol> <h2 id="heading-scroll1">What does the increase in stablecoin mean?</h2> Stablecoins are often used as a vehicle for transactions in the cryptocurrency market, as their stable value can help avoid the risks associated with large price fluctuations. They can also act as a means of storing capital, as their value does not fluctuate significantly over a short period of time. Increasing the amount of virtual money in the system can result in the same thing as central bank money printing for the financial system. The previous lack of new cash to spend could lead to a shortage of funds available for new investment. This, in turn, may have caused the market to weaken significantly, as manifested by reduced trading volumes on cryptocurrency exchanges. The current rebound may mark the first influx of new funds into the market in 1.5 years. Historically in the exchange market, an increase in the amount of money in circulation has had a very positive impact on asset valuations. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_kapitalizacja_stablecoin%C3%B3w_30.11.png" alt="Chart stablecoin capitalisation" width="1001" height="585" /> Source: Btctools <h2 id="heading-scroll2">Chances of a new bull market in BTC are growing</h2> The price of bitcoin has risen by as much as 120% since the beginning of the year, surpassing the US$38,000 level. Despite this, we are still 45% short of reaching historic highs. Unlike many other asset classes, it is difficult to really predict the specific levels that bitcoin will reach, although there are many predictions emerging. The current momentum, for the first time in a long time confirmed by the influx of new funds into this market, may increase the chances of the current trend continuing. It is worth recalling that bitcoin currently accounts for 53% of the total cryptocurrency market capitalisation, followed by ethereum with a 17.6% share. The average correlation of the 100 largest cryptocurrencies, as measured by the correlation with bitcoin, is 0.7. This means that without an increase in the value of bitcoin, it is difficult to expect an increase in the value of the other cryptocurrencies. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_BTCUSD%2Cdzienny_30.11.png" alt="BTCUSD daily chart" width="1001" height="563" /> Source: Conotoxia MT5, BTCUSD, Daily   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comThu, 30 Nov 2023 12:33:00 +0100Stablecoins are cryptocurrencies that are designed to mirror the value of other assets, such as US dollars, allowing us to store funds without having to withdraw them from digital wallets. We can think of them as a form of cash for investment in the cry...The three strongest trends of the last weekhttps://invest.conotoxia.com/investment-research/comments/the-three-strongest-trends-of-the-last-weekhttps://invest.conotoxia.com/investment-research/comments/the-three-strongest-trends-of-the-last-weekAs the stock market saying goes, "the trend is your friend". It indicates that market trends tend to persist according to the so-called momentum strategy. Therefore, let us take a look at the three strongest trends of the past week in the financial markets. We will try to understand the reasons behind these stock market movements in order to explore the possibility of their continuation.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Silver (XAGUSD)</a></li> <li><a href="#heading-scroll2">NATGAS (XNGUSD)</a></li> <li><a href="#heading-scroll3">Crude oil (XTIUSD)</a></li> </ol> <h2 id="heading-scroll1">Silver (XAGUSD)</h2> The break through of the USD 2 000 level in the gold price may have triggered a rally in the silver price. It rose by 5.2% last week, with both bullions showing a long-term high level of dependence on each other. According to data from The Silver Institute, demand for silver in 2023 has fallen by 6% relative to last year, while supply has risen by 2% over the period. The price of an ounce of the metal is currently ahead of key resistance at US$25. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_XAGUSD_dzienny_27.11.png" alt="chart silver price" width="999" height="562" /> Source: Conotoxia MT5, XAGUSD, Daily <h2 id="heading-scroll2">NATGAS (XNGUSD)</h2> It appears that this year's winter may be warmer than previously expected, which is now triggering a continuation of the sell-off in natural gas prices, whose price fell 6.1% last week, facing the previously hard-to-beat US$2.8 level. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_XNGUSD_dzienny_27.11.png" alt="chart gas price" width="1000" height="563" /> Source: Conotoxia MT5, XNGUSD, Daily According to S&P Global, we are currently at a point of equilibrium between gas production and consumption. The latest forecast from the US Energy Information Administration (EIA) predicts an average price of $3.25/MMBTU for this commodity next year. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_popyt_poda%C5%BC_gazu_27.11.png" alt="gas supply and demand graph" width="1000" height="802" /> Source: S&P Global <h2 id="heading-scroll3">Crude oil (XTIUSD)</h2> Oil prices continue to fall, this time by a further 3.7% over the past week, already a 21% loss from this year's peaks. Although OPEC's reports on demand and production figures point to a growing shortage of the commodity, the price falls continue. As early as this Thursday (30.11), OPEC+, the largest oil cartel (responsible for as much as 32.6% of global production), will meet. At this meeting, a decision may be taken to further reduce production, which could be an important factor in reversing the downward trend in crude oil prices. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_XTIUSD_dzienny_27.11.png" alt="chart oil price" width="999" height="562" /> Source: Conotoxia MT5, XTIUSD, Daily   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comMon, 27 Nov 2023 14:30:00 +0100As the stock market saying goes, "the trend is your friend". It indicates that market trends tend to persist according to the so-called momentum strategy. Therefore, let us take a look at the three strongest trends of the past week in the financial mark...This industry grew the fastest since the beginning of the year. Know its leaders!https://invest.conotoxia.com/investment-research/comments/this-industry-grew-the-fastest-since-the-beginning-of-the-year-know-its-leadershttps://invest.conotoxia.com/investment-research/comments/this-industry-grew-the-fastest-since-the-beginning-of-the-year-know-its-leadersThe current year, even though it is not yet over, can be considered a successful one in the US stock market. The main S&P 500 index rose by 18.7%. The performance of individual sectors, however, has varied. By far the best performer, with an average return of as much as 78% since the beginning of the year, is the uranium mining and processing companies sector. Let's take a look at the most important players in this area.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">What does the uranium market look like?</a></li> <li><a href="#heading-scroll2">Cameco Corp.</a></li> <li><a href="#heading-scroll3">Energy Fuels Inc</a></li> </ol> <h2 id="heading-scroll1">What does the uranium market look like?</h2> The price of uranium has risen by 64% since the beginning of the year, reaching its highest level in 15 years. This increase is mainly caused by a decline in uranium mining and plans to increase uranium consumption by developed countries seeking energy independence. This phenomenon is the result of extending the life of the existing fleet of nuclear reactors and the consideration of building new plants, which in turn is due to the sudden increase in energy prices following Russia's invasion of Ukraine. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_1_23.11.png" alt="graph uranium price" width="1205" height="584" /> Source: Tradingeconomics According to the World Nuclear Association, there are currently 436 reactors in operation with a total capacity of around 390 GWe. Annually, they require about 74 000 tonnes of uranium oxide concentrate containing about 62 500 tonnes of uranium. Despite the gradual increase in reactor capacity and more efficient operation, demand for nuclear fuel is being held back by increasing fuel efficiency. Uranium prices fluctuate, but demand for this energy source is relatively predictable. Demand forecasts depend mainly on the installed capacity of reactors and the ability to maintain their high efficiency, the amount of which has remained virtually unchanged since the 2011 Fukushima disaster. According to IEA data, this source accounts for 10% of global energy production. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_2_23.11.png" alt="graph nuclear energy production" width="1200" height="571" /> Source: World Nuclear Association Currently, the United States boasts the largest number of reactors, with as many as 93, followed by France with 56 reactors, and closing the podium is China with 55 reactors. According to the World Nuclear Association's 2021 Nuclear Fuels Report, demand for uranium is forecast to increase over the next ten years. A 27% increase in uranium demand is projected by 2030, and a 38% increase is also forecast for the next decade. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_3_23.11.png" alt="graphic number of nuclear reactors" width="1100" height="580" /> Source: Statista However, the uranium market has seen severe shortages since the 1990s due to fluctuating production levels. In 2022, uranium demand was around 60 000 tonnes, while production was around 49 000 tonnes. This means that countries are forced to draw on their own reserves of this raw material every year. In 2022, Kazakhstan accounted for the largest share of global uranium mining (43% of global supply), followed by Canada (15%) and Namibia (11%). Current market conditions appear to be favourable for further price increases for this commodity in the long term. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_4_23.11.png" alt="graph uranium mining" width="1200" height="757" /> Source: World Nuclear Association This year's robust revenue growth of uranium mining companies has contributed to stock market rises, even surpassing this year's AI boom. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_5_23.11.png" alt="graph of industry returns" width="1089" height="499" /> Source: Finviz <h2 id="heading-scroll2">Cameco Corp.</h2> One of the biggest players in the uranium mining industry is Canada's Cameco Corporation. Its key business areas include uranium mining, production and sales. In addition, Cameco is involved in various stages of the nuclear fuel cycle, covering its reprocessing and production, including MOX (Mixed Oxide) fuels. The company provides its products and services to nuclear power plants around the world. Cameco is also involved in projects to develop nuclear technology and promote nuclear energy as a source of electricity, giving it a key role in the global nuclear industry. The company currently holds a 12% share of the uranium market. The increase in uranium prices contributed significantly to the strong revenue growth in Q3 Br, when a 44% year-on-year increase was recorded. Cameco Corp.'s share prices have impressively increased by 98% since the beginning of the year. In terms of the company's financial position, it is worth noting that its debt levels are virtually zero, with a debt-to-equity ratio of 0.16. The company also has a high level of liquidity, expressed in a quick ratio of 3.31, meaning that the company would be able to sustain itself for approximately three years on liquid assets alone. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_6_23.11.png" alt="Cameco Corp share chart" /> Source: Conotoxia MT5, CamecoCorp, Weekly <h2 id="heading-scroll3">Energy Fuels Inc</h2> The latter company is the US-based Energy Fuels Inc. which specialises in uranium mining, nuclear fuel production, nuclear reprocessing and nuclear waste recycling. It stands out in the market for having the highest return on equity (ROE) of 32% (compared to 4.9% for Cameco Corp.), no debt and a very high level of liquidity (quick ratio of 22.5). This means that in the event of an increase in uranium prices, the company may have the greatest potential to increase earnings from its operations. The increase in uranium prices contributed to the company's revenue growth of as much as 226% year-on-year. It has also seen its share price rise by 35% year-to-date. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_7_23.11.png" alt="Energy Fuels Inc. share chart" /> Source: Tradingview   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 24 Nov 2023 10:46:00 +0100The current year, even though it is not yet over, can be considered a successful one in the US stock market. The main S&P 500 index rose by 18.7%. The performance of individual sectors, however, has varied. By far the best performer, with an average ret...Next week to watch (27.11 – 01.12.)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-27-11-01-12https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-27-11-01-12After the Thanksgiving holiday in the US, next week will see the release of some important macroeconomic data, such as US GDP growth for the third quarter, which may confirm the estimated 4.9% increase. Furthermore, the New Home Sales, together with the US CB Consumer Confidence Index report, may provide us with the newest insight into consumer confidence levels in the US. Meanwhile, the preliminary data for the Eurozone's inflation level in November will be coming out later next week. <h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">US New Home Sales (October)</a></li> <li><a href="#heading-scroll2">US CB Consumer Confidence (November)</a></li> <li><a href="#heading-scroll3">US Gross Domestic Product (GDP) QoQ (Q3)</a></li> <li><a href="#heading-scroll4">Eurozone Consumer Price Index (CPI) YoY (November preliminary)</a></li> <li><a href="#heading-scroll5">Stocks to watch</a></li> </ol> <h2 id="heading-scroll1">Monday 27.10. 15:00 GMT, US New Home Sales (October)</h2> New Home Sales is an economic indicator published by the US Census Bureau that measures the number of new home sales, taking into account any deposits paid or contracts signed on single-family homes built in the current or previous year. A high number would indicate that the housing activity may be high, leading to strong economic growth. Although a lagging indicator, new home sales are closely watched by investors as they represent consumer demand driven by factors like interest rates, unemployment, and household income. New Home Sales are reported in absolute terms and as a percentage change from the previous month. In addition, new home sales are usually released before Existing Home Sales, as the two data are closely correlated. Sales of newly built single-family homes in the United States showed a notable increase, rising 12.3% to a seasonally adjusted annualised rate of 759 thousand in September 2023. This was a significant rebound from the previous month's revised figure of 676 thousand and exceeded the market consensus of 680 thousand. This robust performance represents the highest level of new home sales since February 2022. The consensus forecast for the upcoming report is for 730 thousand, which would represent a slight decline from the previous month's surge.  The heightened demand for new housing and homebuilding might be attributed to a shortage of previously owned houses in the market. Sales exhibited growth across all regions, with the South leading at a 14.6% increase to 456 thousand, followed by the West with a 7.5% rise to 187 thousand, the Midwest with a 4.7% uptick to 67 thousand, and the Northeast recording a substantial 22.5% increase to 49 thousand. The median price of newly sold houses stood at 418,800 USD, while the average sales price was 503,900 USD. In comparison to the figures from a year ago, this reflects a change from 477,700 USD to 418,800 USD for the median price and from 530,100 USD to 503,900 USD for the average price. As of the end of September, the inventory revealed that 435 thousand houses were still available for sale. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_1_24.11.png" alt="US new home sales (October)" width="1201" height="538" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bullish effect on the USD, while a lower-than-expected reading could be bearish for the USD. Impact: USD <h2 id="heading-scroll2">Tuesday, 28.11. 15:00 GMT, US CB Consumer Confidence (November)</h2> The Conference Board's Consumer Confidence Index (CCI) measures consumer confidence in the economy. It is an indicator that can predict future consumer spending, a key factor in overall economic activity. Higher values indicate greater consumer optimism. The CCI is measured based on the level of confidence in 1985, which was set at 100 points. An index above 100 points indicates a higher confidence level than in 1985. Conversely, a value below 100 points means a lower confidence level than in 1985. The Conference Board Consumer Confidence Index experienced a moderate decline in October, dropping to 102.6 (1985=100) from an upwardly revised 104.3 in September. The overall trend reveals a third consecutive month of decline in consumer confidence. Within this index, the Present Situation Index, which gauges consumers' evaluations of current business and labour market conditions, decreased to 143.1 (1985=100) from 146.2. Additionally, the Expectations Index, which reflects consumers' short-term outlook for income, business, and labour market conditions, saw a slight dip to 75.6 (1985=100) in October, following a decline to 76.4 in September. Notably, the Expectations Index remains below 80, a historical threshold indicating a potential recession within the following year. Consumer concerns about an impending recession persist at elevated levels, aligning with an anticipation of a short and shallow economic contraction in the first half of 2024. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_2_24.11.png" alt="US CB consumer confidence index (November)" width="1202" height="567" /> Source: www.conference-board.org/ A higher-than-expected reading may have a bullish effect on the USD, while a lower-than-expected reading could be bearish for the USD. Impact: USD <h2 id="heading-scroll3">Wednesday 29.11. 13:30 GMT, US Gross Domestic Product (GDP) QoQ (Q3)</h2> Gross domestic product (GDP) indicates the total value of goods and services produced in a country for a certain period. GDP is an important indicator of the health of an economy because it gives an overall picture of how well or poorly it is doing. If the GDP growth is higher than expected, the economy is in good shape and growing faster than expected. On the other hand, if the GDP growth is lower than expected, the economy performs weaker than anticipated. Furthermore, if the GDP growth is negative for two consecutive quarters, it may be considered a technical recession due to contracting economic output. According to an initial estimate, the US economy demonstrated robust growth, expanding at an annualised rate of 4.9% in Q3 2023, marking the highest growth rate since the final quarter of 2021. This also exceeded market expectations of 4.3% and represented a significant increase from the 2.1% expansion observed in Q2. Key drivers of this economic expansion included a notable 4% increase in consumer spending, the most substantial uptick since Q4 2021 (compared to 0.8% in Q2 2023). This surge in consumer spending was led by expenditures on housing and utilities, healthcare, financial services and insurance, food services and accommodation, as well as non-durable goods, particularly prescription drugs and recreational goods and vehicles. The quarter also saw a notable rebound in exports, which rose by 6.2% after a 9.3% fall in the second quarter, while imports rose by 5.7%, compared with a fall of -7.6% previously. Private inventories made a significant contribution to growth, adding 1.32 percentage points - the first positive contribution in three quarters. In addition, residential investment turned positive, growing at a rate of 3.9% (up from -2.2%) for the first time in almost two years, and government spending accelerated (up from 3.3% to 4.6%). In contrast, non-residential investment contracted for the first time in two years, falling by 0.1% (compared with growth of 7.4%), mainly due to a fall in equipment (3.8% compared with 7.7%) and a slowdown in structures (1.6% compared with 16.1%). <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_3_24.11.png" alt="US gross domestic product (GDP) by quarter (Q3)." width="1201" height="538" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bullish effect on the USD, while a lower-than-expected reading could be bearish for the USD. Impact: USD <h2 id="heading-scroll4">Thursday 30.11. 10:00 GMT, Eurozone Consumer Price Index (CPI) YoY (November preliminary)</h2> The CPI index measures changes in the prices of consumer goods and services. It covers different types of products, such as food, fuel, transportation services, cosmetics, household goods, clothing, and many others. The purpose of the CPI index is to measure the increase or decrease in the cost of living for consumers. As the CPI index rises, consumers' purchasing costs increase, affecting their money's purchasing power. The CPI index is used to monitor inflation or the overall rise in prices in the economy. It allows us to assess whether prices are rising too fast or too slowly and to determine what economic policy measures should be taken to offset the adverse effects of inflation. The inflation rate in the Eurozone for October 2023 was officially verified at 2.9% year-on-year. While this represents the lowest figure since July 2021, it still exceeds the European Central Bank's (ECB) target of 2%. The decline in energy prices and a deceleration in food inflation were the primary factors contributing to this outcome. Concurrently, the core inflation rate, which excludes the influence of volatile food and energy prices, also decreased to 4.2% in October, reaching its lowest level since July 2022. Energy costs recorded a significant fall of 11.2%, a marked contrast to the -4.6% recorded in September. In addition, inflation rates eased in categories such as food, alcohol and tobacco (7.4% compared with 8.8%) and non-energy industrial goods (3.5% compared with 4.1%). Inflation in services remained relatively stable at 4.6%, compared with 4.7% in the previous month. On a monthly basis, consumer prices exhibited a marginal increase of 0.1% in October, following a 0.3% rise in September. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_4_24.11.png" alt="Eurozone consumer price index (CPI) annualised (preliminary data for November)" width="1201" height="551" /> Source: Tradingeconomics.com If the reading is higher than expected, inflation is higher, possibly favouring a fall in the EUR. Meanwhile, it may be also a stimulus for the ECB to raise interest rates and reduce the money supply, causing an increase in the EUR. If the reading is lower than expected, it may give the ECB an argument to stop its policy of raising interest rates. Impact: EUR, STOXX, DAX and other indices <h2 id="heading-scroll5">Stocks to watch</h2> Hewlett Packard (HPE) announcing its earnings results for the quarter ending on 10/2023. Forecast EPS: 0.4969. Positive earnings surprise in 8 out of the last 10 reports. Time: Tuesday, November 28, after the market closes.  Dollar Tree (DLTR) announcing its earnings results for the quarter ending on 10/2023. Forecast EPS: 7.55. Positive earnings surprise in 8 out of the last 10 reports. Time: Wednesday, November 29, before the market opens.  Marvell (MRVL) announcing its earnings results for the quarter ending on 10/2023. Forecast EPS: 0.4006. Positive earnings surprise in 8 out of the last 10 reports. Time: Friday, December 1.    Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 24 Nov 2023 10:25:00 +0100After the Thanksgiving holiday in the US, next week will see the release of some important macroeconomic data, such as US GDP growth for the third quarter, which may confirm the estimated 4.9% increase. Furthermore, the New Home Sales, together with the...What impact will the punishment of the Binance exchange have on the cryptocurrency market?https://invest.conotoxia.com/investment-research/comments/what-impact-will-the-punishment-of-the-binance-exchange-have-on-the-cryptocurrency-markethttps://invest.conotoxia.com/investment-research/comments/what-impact-will-the-punishment-of-the-binance-exchange-have-on-the-cryptocurrency-marketYesterday , Changpeng Zhao, CEO of Binance, resigned from his position and accepted his guilt in a case of negligent failure to protect against money laundering in the United States. This came after federal prosecutors filed charges against the world's largest cryptocurrency exchange. The company also pleaded guilty to criminal issues relating to money laundering and violating international financial sanctions. It agreed to pay more than $4.3 billion in penalties, US officials announced on Tuesday. The consequence, according to Nansen, was an outflow of more than US$1bn of its US$65bn in funds. Let's take a look at what consequences this has had on the cryptocurrency market, and how will it affect its future?<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">What is the agreement about?</a></li> <li><a href="#heading-scroll2">How has the situation affected BTC, BNB and the cryptocurrency market?</a></li> <li><a href="#heading-scroll3">What does the future hold?</a></li> </ol> <h2 id="heading-scroll1">What is the agreement about?</h2> According to court documents, Binance's alleged abuses took place from at least August 2017 until October 2022. During this period, the exchange may have failed to report well over 100,000 suspicious transactions related to, among other things, child sexual abuse, massive hacking, drug trafficking and groups such as al-Qaeda and ISIS. As a result of the current agreement, Binance becomes one of the entities to incur one of the largest corporate fines in US history. The agreement also settled a case brought by the Commodity Futures Trading Commission (CFTC), which accused Binance and Zhao of operating illegally in the United States. According to the CFTC's civil indictment, the majority of the group's reported trading and profits came from "extensive solicitation and access" to US customers, contradicting the exchange's claims. In June, the US Securities and Exchange Commission filed 13 civil charges, accusing Binance of violations including mixing billions of dollars of customers with a separate trading company owned by its CEO and operating an unregistered exchange and clearing agencies. The Securities and Exchange Commission (SEC) was not named in the announced settlements. As the exchange itself emphasises in the announcement: "We take our responsibility as a custodian very seriously and maintain 1:1 backing for every user asset. This means that users can withdraw 100 percent of their assets from the platform at any time. Of note, in our resolutions with the U.S. agencies they: <ul> <li style="font-weight: 400;" aria-level="1">do not allege that Binance misappropriated any user funds, and</li> <li style="font-weight: 400;" aria-level="1">do not allege that Binance engaged in any market manipulation."</li> </ul> However, according to Nansen's data, more than US$1 billion flowed off the exchange in a single day, down 1.5% in total funds. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_1_22.11.png" alt="Graphic of Binance exchange assets" /> Source: Nansen <h2 id="heading-scroll2">How has the situation affected BTC, BNB and the cryptocurrency market?</h2> After the momentary shock of the agreement announcement, there is no significant impact on most assets. The cryptocurrency that seems to have suffered the most, losing more than 9%, is the BNB token from Binance. Of the top 100 cryptocurrencies, as many as 98 have seen a noticeable rebound over the past 24 hours. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_2_22.11.png" alt="chart BNBUSD" /> Source: Contoxia MT5, BNBUSD, Daily Bitcoin, meanwhile, fell 4% before rebounding and remaining with a loss of 1.3%. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_3_22.11.png" alt="Chart BTCUSD" /> Source: Conotoxia MT5, BTCUSD, Daily One of the cryptocurrencies that has gained the most since then is syntetix. The price of this asset has risen by 10.9% since the announcement, while maintaining a robust growth rate of 156% since the beginning of the year. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_4_22.11.png" alt="Chart SNXUSD" /> Source: Conotoxia MT5, SNXUSD, Daily <h2 id="heading-scroll3">What does the future hold?</h2> It seems that the current perturbations can be seen more as a temporary confusion than a crash in the cryptocurrency world. The months-long disputes with regulators may be largely behind us. This, in turn, may accelerate the adaptation of cryptocurrencies to the economy. The Binance exchange itself has pledged to increase security measures, including the appointment of a new CEO, who previously served as CEO at the Abu Dhabi Global Market (ADGM) Financial Services Regulatory Authority (FSA) and was director of regulation for the Singapore Exchange (SGX). This, combined with the likely imminent approval of an ETF based on bitcoin quotes, could positively impact the market in the long term. However, investors may still be concerned about the unfinished business with the Securities and Exchange Commission (SEC).   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comWed, 22 Nov 2023 14:59:00 +0100Yesterday (21.11), Changpeng Zhao, CEO of Binance, resigned from his position and accepted his guilt in a case of negligent failure to protect against money laundering in the United States. This came after federal prosecutors filed charges against the w...The 5 strongest trends of the last weekhttps://invest.conotoxia.com/investment-research/comments/the-5-strongest-trends-of-the-last-weekhttps://invest.conotoxia.com/investment-research/comments/the-5-strongest-trends-of-the-last-weekAs the stock market saying goes, "the trend is your friend". It indicates that trends in the market tend to persist according to the so-called momentum strategy. Therefore, let us take a look at the five strongest trends of the past week in the financial markets. We will try to understand the reasons behind these stock market movements in order to explore the possibility of their continuation.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">SYNTHETIX (SNXUSD)</a></li> <li><a href="#heading-scroll2">ARK Innovation ETF (ARKK)</a></li> <li><a href="#heading-scroll3">Pallad (XDPUSD)</a></li> <li><a href="#heading-scroll4">Natgas (XNGUSD)</a></li> <li><a href="#heading-scroll5">S&P 500 (US500)</a></li> </ol> <h2 id="heading-scroll1">SYNTHETIX (SNXUSD)</h2> Growing expectations for the acceptance of the first ETF for the bitcoin spot seem to be affecting the entire cryptocurrency market. Among them, synthetix has been growing the fastest recently - up 36% over the past week. The main goal of the synthetix cryptocurrency is to allow users to invest in various assets - currencies, commodities or stocks - by creating synthetic representations of them on the blockchain. Therefore, the cryptocurrency's users are often financial institutions that provide such services through it and whose increased inflows are expected with the implementation of the ETF. The increases led to a break through the one-year resistance at USD 3.38. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_1_21.11.png" alt="chart of SNXUSD" /> Source: Conotoxia MT5, SNXUSD, Daily <h2 id="heading-scroll2">ARK Innovation ETF (ARKK)</h2> There is increasing pressure for earlier interest rate cuts relative to earlier expectations. The low interest rate environment significantly favours growth-oriented companies due to easier access to cheap funds. This may have been the reason for the ARK Innovation ETF from the famous Cathie Wood rising by 9.5%. It should be mentioned that the fund's price is currently at a key 2-year support at USD 45. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_2_21.11.png" alt="Ark innovation ETF chart" /> Source: Conotoxia MT5, ARKK, Daily <h2 id="heading-scroll3">Pallad (XDPUSD)</h2> The price of palladium has risen by 9.4%, surpassing the US$1,000 level, after an almost continuous decline from the US$3,000 level over the past year. According to SFA Oxford, the metal is mainly used in the automotive industry (81.2% of demand), manufacturing (16.3%) and jewellery (2.5%). The metal has been struggling for some time with a lack of growth in demand despite a continued increase in the amount of recycled palladium sourced (up 4% year-on-year), which has led to an overall decline in demand of 2.1% year-on-year. Therefore, is the current increase only a short-term rebound or will this trend continue? <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_3_21.11.png" alt="Palladium price chart" /> Source: Conotoxia MT5, XPDUSD, Daily <h2 id="heading-scroll4">Natgas (XNGUSD)</h2> Another commodity that has seen the biggest downward trend in the past week is gas losing 9.4% in value. According to S&P Global data, we are currently at a point of equilibrium between gas production and consumption. The latest forecast from the US Energy Information Administration (EIA) predicts an average price of $3.25/MMBTU for this commodity next year. However, it should be noted that the heating season has not yet fully started and any shortfall will depend on the weather conditions this winter. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_4_21.11.png" alt="natural gas supply and demand graph" width="842" height="675" /> Source: S&P Global <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_5_21.11.png" alt="graph natural gas price" /> Source: Conotoxia MT5, XNGUSD, Daily <h2 id="heading-scroll5">S&P 500 (US500)</h2> The past week proved exceptionally positive for the general stock market.The main S&P 500 index recorded an increase of 2.52%.Interestingly, it even outperformed the Nasdaq 100 technology index, which ended the week with a gain of 2%. This is now more than 19% year-to-date growth on the S&P 500 index. The momentum started with Tuesday's US CPI inflation data, which came in below expectations. It is now just 1.4% short of reaching historic highs on the index. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_6_21.11.png" alt="chart of the SPX index" /> Source: Conotoxia MT5, US500, Daily   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comTue, 21 Nov 2023 11:26:00 +0100As the stock market saying goes, "the trend is your friend". It indicates that trends in the market tend to persist according to the so-called momentum strategy. Therefore, let us take a look at the five strongest trends of the past week in the financia...Next week to watch (20 – 24.11.)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-20-24-11https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-20-24-11Due to the Thanksgiving holiday in the US, the coming week will be a shorter one for US markets - closed on Thursday and closed at 13:00 on Friday. Nevertheless, among other US macroeconomic data, Existing Home Sales and Composite PMI will be released, in addition to German GDP growth data, which may clarify whether the EU's largest economy continued to contract in Q3 2023. <h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">US Existing Home Sales (October)</a></li> <li><a href="#heading-scroll2">Germany Gross Domestic Product (GDP) QoQ (Q3)</a></li> <li><a href="#heading-scroll3">US Composite Purchasing Managers Index PMI (November)</a></li> <li><a href="#heading-scroll4">Stocks to watch</a></li> </ol> <h2 id="heading-scroll1">Tuesday 21.11. 15:00 GMT, US Existing Home Sales (October)</h2> Existing Home Sales is an economic indicator published by the National Association of Realtors that measures the number of existing single-family home sales in absolute numbers and as a percentage change compared to the previous month. A high number would indicate that the housing activity may be high, leading to strong economic growth. Although a lagging indicator, existing home sales are closely watched by investors as they represent consumer demand driven by factors like interest rates, unemployment, and household income. Existing Home Sales are reported for the national overall as well as a breakdown in four regions: West, Midwest, South, and Northeast.  In September 2023, sales of pre-owned homes in the United States experienced a 2% decline compared to the previous month, reaching a seasonally adjusted annualized rate of 3.96 million units, marking the second time (after May 2020) this figure dropped below 4 million units since October 2010. However, this result slightly exceeded market expectations, which anticipated 3.89 million units. The decline is consistent with other reports over the same period, with rising mortgage rates discouraging potential first-time buyers and preventing homeowners from selling properties acquired at lower mortgage rates. Specifically, single-family home sales saw a 1.9% decrease to 3.53 million, and co-op sales dipped by 2.3% to 430,000 units. Concurrently, the median prices for existing home sales surged by 2.8% year-on-year to 394,300 USD. Despite the significant price increase, the total housing inventory at the end of the month rose by 2.7% to 1.13 million units.  According to consensus forecasts, October's data on Existing Home Sales are expected to decrease further to 3.92 million units.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_1_17.11.png" alt="chart of US secondary market house sales" width="1200" height="540" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bullish effect on the USD, while a lower-than-expected reading could be bearish for the USD. Impact: USD <h2 id="heading-scroll2">Friday 24.11. 07:00 GMT, Germany Gross Domestic Product (GDP) QoQ (Q3)</h2> Gross domestic product (GDP) indicates the total value of goods and services produced in a country for a certain period. GDP is an important indicator of the health of an economy because it gives an overall picture of how well or poorly it is doing. If the GDP growth is higher than expected, the economy is in good shape and growing faster than expected. On the other hand, if the GDP growth is lower than expected, the economy performs weaker than anticipated. Furthermore, if the GDP growth is negative for two consecutive quarters, it may be considered a technical recession due to contracting economic output. According to an initial estimate, the German economy contracted by 0.1% in the third quarter, reversing the upwardly revised 0.1% expansion in the previous three months and beating market forecasts of a 0.3% contraction. The main factor contributing to the decline in GDP was a fall in private consumption, influenced by rising interest rates and persistently high inflation. Conversely, there was growth in equipment investment over the period. On an annual basis, GDP contracted by 0.3%, in contrast to the previous period when it was unchanged and against market expectations of a 0.7% decline.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_2_17.11.png" alt="graph change in german gdp" width="1201" height="552" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bullish effect on the EUR, while a lower-than-expected reading could be bearish for the EUR. Impact: EUR <h2 id="heading-scroll3">Friday, 24.11. 14:45 GMT, US Composite Purchasing Managers Index PMI (November)</h2> The Composite PMI index is a monthly indicator produced by S&P Global that measures economic activity based on original survey data collected from a representative panel of around 800 companies based in the US manufacturing and service sectors. As reported by purchasing managers, the PMI provides insight into the manufacturing and service industries' activity levels. This measure provides an understanding of the state of US manufacturing and service industries, as it is assumed that purchasing managers have access to first-hand data on the performance of their companies. A reading above 50 indicates expansion, while a reading below 50 indicates contraction. The S&P Global US Composite PMI for October 2023 was adjusted slightly downward to 50.7, a decrease from the initial estimate of 51.0 and higher compared to the 50.2 recorded in the preceding two months. This updated figure suggested a modest increase in business activity among private sector firms, with manufacturers and service providers witnessing a faster rise in output despite challenging demand conditions. The ongoing decline in new orders and exports persisted, although employment levels saw growth, primarily propelled by the service sector. Regarding prices, both input and output cost inflation rates decelerated to a three-year low. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_3_17.11.png" alt="US PMI chart" width="1214" height="591" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bullish effect on the USD, while a lower-than-expected reading could be bearish for the USD. Impact: USD <h2 id="heading-scroll4">Stocks to watch</h2> NVIDIA (NVDA) announcing its earnings results for the quarter ending on 10/2023. Forecast EPS: 3.35. Positive earnings surprise in 9 out of the last 10 reports. Time: Tuesday, November 21, after the market closes.  Deere&Company (DE) announcing its earnings results for the quarter ending on 10/2023. Forecast EPS: 7.55. Positive earnings surprise in 9 out of the last 10 reports. Time: Wednesday, November 22.  PDD Holdings DRC (PDD) announcing its earnings results for the quarter ending on 10/2023. Forecast EPS: 8.91. Positive earnings surprise in 7 out of the last 10 reports. Time: Thursday, November 23.    Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 17 Nov 2023 10:27:00 +0100Due to the Thanksgiving holiday in the US, the coming week will be a shorter one for US markets - closed on Thursday and closed at 13:00 on Friday. Nevertheless, among other US macroeconomic data, Existing Home Sales and Composite PMI will be released, ...How did the biggest - Warren Buffett, Michael Burry or Bill and Melinda Gates - invest in Q3?https://invest.conotoxia.com/investment-research/comments/how-did-the-biggest-warren-buffett-michael-burry-or-bill-and-melinda-gates-invest-in-q3https://invest.conotoxia.com/investment-research/comments/how-did-the-biggest-warren-buffett-michael-burry-or-bill-and-melinda-gates-invest-in-q3From the latest 13F report, published quarterly and showing the changes in the portfolios of the largest investment fund managers from the United States, we found out what decisions were made by the most well-known investors: Warren Buffett, Michael Burry or Bill and Melinda Gates. Let's take a look at their choices in Q3 this year and consider what their motivations might have been.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">What were super investors betting on in Q3 this year?</a></li> <li><a href="#heading-scroll2">How did Warren Buffett and his Berkshire Hathaway invest?</a></li> <li><a href="#heading-scroll3">How did Michael Burry, Scion Asset Management, invest?</a></li> <li><a href="#heading-scroll4">How did Bill & Melinda Gates, Foundation Trust invest?</a></li> </ol> <h2 id="heading-scroll1">What were super investors betting on in Q3 this year?</h2> If we look at the net magnitude of change by sector in Q3 this year, the majority of super investors were definitely biased towards a bear market. The most traded stocks were securities from the information technology and technology sectors, where, in total, super investors reduced the size of their positions by 1.3%. On the other hand, they were most likely to buy stocks from the commodities, consumer goods and industrial sectors. Collectively, their holdings increased by 0.66%. This shows how heavily super investors sold off stocks in Q3. It should be noted, however, that the 13F report is limited to stocks in the US market only. Hence, if any fund buys shares on European exchanges, for example, they are not included in the report. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_1_16.11.png" alt="graphic repositioning of superinvestor sectors" width="1200" height="577" /> Source: Dataroma <h2 id="heading-scroll2">How did Warren Buffett and his Berkshire Hathaway invest?</h2> Warren Buffett is known for his long-term investment approach in companies with solid fundamentals. In the third quarter of this year, his investment fund was clearly on the selling side of equities, reducing as much as 1.72% of its portfolio in the US market. Among the three largest transactions are a 10.45% reduction in its stake in oil giant Chevron Corp., the comprehensive sale of Activision Blizzard shares, which, as Buffett himself pointed out, were undertaken in the context of a possible takeover of the company by Microsoft, and the complete divestment of shares in automotive giant General Motors. In Q3 of this year, only three new companies were added to the portfolio: the media holding Liberty Media Corporation, along with a token stake in the Atlanta Braves, which is owned by the same holding company, or the purchase of radio channel provider Sirius XM Holdings, symbolic in the context of the entire portfolio. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_2_16.11.png" alt="Berkshire Hathaway's change of position in Q3" width="1095" height="675" /> Source: Dataroma Buffett currently holds the largest stock of free cash in the fund's history, with a total value of $151.97 billion. Reductions in Chevron shares, which still ranks fifth in Buffett's portfolio, can be explained by one of the first steps in the realisation of profits and declining expectations for the future of the energy sector. The sale of Activision Blizzard shares appears to be linked to the successful exit of the tech giant Microsoft's takeover of the company, as the current price is already settling around the takeover price. For regulatory reasons, the process has been protracted. In contrast, Buffett's decision to divest himself of General Motors shares was often justified by suggestions of a worsening outlook for the automotive industry in the coming years. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_3_16.11.png" alt="Berkshire Hathaway portfolio value graph" width="1200" height="972" /> Source: Gurufocus <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_4_16.11.png" alt="Activision Blizzard share chart" /> Source: Conotoxia MT5, Blizzard, Daily <h2 id="heading-scroll3">How did Michael Burry, Scion Asset Management, invest?</h2> Analysing the history of the positions taken by Michael Burry, who became famous for predicting the 2008 crisis, is fraught with a degree of difficulty, as this trader is famous for frequently changing his investment portfolio. His famous bet under Q2 of this year, with a market value of USD 1.6 billion, when he bet on the S&P 500 and Nasdaq indexes to fall by as much as 93.6% of the portfolio's value, was closed in Q3. After the indices surged, it is estimated that Burry may have lost around USD 26.5 million on this trade. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_5_16.11.png" alt="Repositioning of the Michael Burra Fund" width="1200" height="666" /> Source: Whalewisdom Just 1.5 months after completing this transaction, at the end of Q3, Burry opened a new bet (again via options) on the decline of stocks from the semiconductor sector, betting on the decline of the iShares Semiconductor ETF (SOXX) with a value of US$47bn, which accounted for as much as 47.86% of the total portfolio value. He also purchased options on the decline of Booking Holdings Inc. worth US$7.7 million, which accounted for 7.79% of the portfolio value.  The investment calculated for the decline of the semiconductor sector appears to be linked to the growing expectations of the development of artificial intelligence. A large proportion of the SOXX fund is made up of shares in AMD, Broadcom or Nvidia, all of which are directly involved in the development of this technology, which has been reflected in a more than 50% increase in the value of the fund over the year. Burry probably expects the market to realise gains in the near term. However, we do not know whether he still has these positions open in the market. <h3><a href="https://fx.conotoxia.com/users/login/FOREX?utm_source=invest_comments&utm_medium=url_link&utm_campaign=invest_comment_16_11_2023&utm_content=link_2">Log in and take the opportunity!</a></h3> <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_6_16.11.png" alt="SOXX fund chart" /> Source: Conotoxia MT5, SOXX, Daily <h2 id="heading-scroll4">How did Bill & Melinda Gates, Foundation Trust invest?</h2> In contrast to Buffett, the Bill and Melinda Gates Foundation opted for small purchases, selling only 10% of their holdings in Berkshire Hathaway, Warren Buffett's investment fund, which represented 2.35% of the value of their portfolio. The foundation bought as many as 54 new positions, but their total value was only 0.5%. As a result, Bill Gates and his ex-wife sold far more than they bought. The move may be an attempt to diversify the investment portfolio against Buffett's heavily concentrated fund.  Currently, the fund's largest investment is Gates' highly sentimental Microsoft Corp. shares, which account for 31.88% of the portfolio. Second place is still occupied by Buffett's investment fund with 20.3%, and in third place is one of Canada's largest transport companies, Canadian National Railway Co., accounting for 15.3% of the total portfolio. It should be added here that Bill Gates is also the largest holder of agricultural land in the United States, which the report does not take into account. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_7_16.11.png" alt="Repositioning of the Bill and Melinda Gates Fund" width="1151" height="675" /> Source: Dataroma <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_8_16.11.png" alt="Berkshire Hathaway share price" /> Source: Conotoxia MT5, BerkshireHa, Daily   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comThu, 16 Nov 2023 14:57:00 +0100From the latest 13F report, published quarterly and showing the changes in the portfolios of the largest investment fund managers from the United States, we found out what decisions were made by the most well-known investors: Warren Buffett, Michael Bur...What is the potential of the different sectors of the SPX index?https://invest.conotoxia.com/investment-research/comments/what-is-the-potential-of-the-different-sectors-of-the-spx-indexhttps://invest.conotoxia.com/investment-research/comments/what-is-the-potential-of-the-different-sectors-of-the-spx-indexIf we were to look at the analysts' forecasts available on Finviz, we would see that, at current valuations, we cannot speak of an over- or undervaluation of the S&P 500 index, as we have already had the opportunity to write about. However, we decided to dig deeper and analyse valuations at the level of individual sectors, such as technology, financials, consumer goods, energy or communication services.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Value of the technology sector (XLK)</a></li> <li><a href="#heading-scroll2">Value of the consumer sector (XLY)</a></li> <li><a href="#heading-scroll3">Value of the energy sector (XLE)</a></li> <li><a href="#heading-scroll4">Value of the financial sector (XLF)</a></li> <li><a href="#heading-scroll5">Value of the communication services sector (XLC)</a></li> </ol> <h2 id="heading-scroll1">Value of the technology sector (XLK)</h2> The projected average annual earnings growth rate for the S&P 500 (US500) index shares over the next five years is 7.9%, with a rate of 79% for the distribution of profits to shareholders in the form of dividends and share buyback programmes. Under these assumptions, the value of the S&P 500 would be around 4260, which is around the current values of the index. <ul> <li style="font-weight: 400;" aria-level="1"><a href="https://invest.conotoxia.com/investment-research/comments/what-is-the-value-of-the-spx-and-nasdaq-100-index">What is the value of the SPX and Nasdaq 100 index?</a></li> </ul> However, if we break it down by sector, we can see that some sectors are showing signs of overvaluation, while others are showing potential for growth. When analysing analysts' forecasts for future earnings, the technology sector is currently the most overvalued. The forecasts assume an average annual earnings growth rate of 14.4%, with a relatively high earnings reinvestment rate of 54.22% (earnings payout rate of 45.78%). However, a significant problem for the sector is the level of debt, as measured by the debt-to-equity ratio, which is above average at 1.86. This means that technology companies currently have almost twice as much debt as equity, which can significantly increase the future risk of their business. This, in turn, could result in an increase in the expected cost of capital from 8.7% for the S&P 500 index to 12.2% (4.6%+1.86*[8.7%-4.6%]) for technology companies. In that case, the Technology Select Sector SPDR Fund (XLK) would be worth 28.24, well below current values. This may mean that it is difficult to expect technology stocks to generate as high returns in the coming years as they have done since 2008. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_1_ENG_15.11.png" alt="XLK fund pricing model" width="1202" height="335" /> Source: Conotoxia (own analysis) <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_2_15.11.png" alt="XLK fund quotation graph" /> Source: Conotoxia MT5, XLK, Daily <h2 id="heading-scroll2">Value of the consumer sector (XLY)</h2> The situation in the consumer goods sector is similar. It is characterised by some of the highest debt-to-equity ratios at 2.29, significantly raising the cost of capital to 14%. The projected average annual earnings growth rate for shares in this sector is 11%, with one of the highest - as high as 94.76%. - earnings payout ratio to shareholders. This means that despite the recovery in the economy, Consumer Discretionary Select Sector SPDR Fund (XLY) equities may face under-investment and high debt distress. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_3_ENG_15.11.png" alt="XLY fund pricing model" width="1202" height="344" /> Source: Conotoxia (own analysis) <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_4_15.11.png" alt="XLY fund quotation graph" /> Source: Conotoxia MT5, XLY, Daily <h2 id="heading-scroll3">Value of the energy sector (XLE)</h2> According to analysts' forecasts, the values of companies in the energy sector currently look positive. The expected earnings growth rate here is 12.2%, with an earnings payout ratio of 52.22%. These values, combined with relatively low debt levels (debt-to-equity ratio of 0.62), may suggest that stocks from this sector can continue to offer attractive dividend yields to their shareholders while maintaining earnings growth rates similar to those characteristic of technology companies. The assumptions used indicate that the value of the Energy Select Sector SPDR Fund (XLE) is approximately US$130. However, it should be borne in mind that the performance of companies in this sector is strongly dependent on external factors, i.e. commodity and energy price quotations in markets that are characterised by particularly high unpredictability. <h4><a href="https://fx.conotoxia.com/users/login/FOREX?utm_source=invest_comments&utm_medium=url_link&utm_campaign=invest_comment_13_11_2023&utm_content=link_2">Log in and take the opportunity!</a></h4> <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_5_ENG_15.11.png" alt="XLE fund pricing model" width="1201" height="332" /> Source: Conotoxia (own analysis) <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_6_15.11.png" alt="XLE fund quotation graph" /> Source: Conotoxia MT5, XLE, Daily <h2 id="heading-scroll4">Value of the financial sector (XLF)</h2> As recently as the beginning of this year, we heard about the bankruptcies of large banks in the United States, such as Silicon Valley, which resulted in a significant repricing of the sector. Since then, the situation has been alleviated by liquidity interventions from the Fed. Analysts forecast that average earnings growth in the sector could be one of the higher ones, averaging 11.7% per annum. The average level of reinvestment of equity earnings is this 30.71%, with a relatively low debt-to-equity ratio of 1.19. This would put the cost of capital at 9.5%, suggesting that the Financial Select Sector SPDR Fund (XLF) may currently be showing signs of being undervalued in the market. According to analysts, this means that it has the potential to grow faster than the S&P 500 Index. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_7_ENG_15.11.png" alt="XLF fund pricing model" width="1203" height="354" /> Source: Conotoxia (own analysis) <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_8_15.11.png" alt="XLF fund quotation graph" /> Source: Conotoxia MT5, XLF, Daily <h2 id="heading-scroll5">Value of the communication services sector (XLC)</h2> The sector with the highest expected earnings growth rate, according to analysts, is communications services, which includes giants such as Meta (Facebook), Alphabet (Google) and Netflix. The expected average annual growth rate is 21.5%, which largely appears to be generated by the highest level of earnings investment at 85.38%. In addition, companies in this sector have an elevated debt-to-equity ratio of 1.54. This, in turn, raises the expected return to 10.9%. However, despite this high growth potential, the Communication Services Select Sector SPDR Fund (XLC) is showing signs of overvaluation, suggesting that, as with the technology sector, shares in companies in this sector may grow more slowly than they have since 2008. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_9_ENG_15.11.png" alt="XLC fund pricing model" width="1201" height="358" /> Source: Conotoxia (own analysis)   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comWed, 15 Nov 2023 09:50:00 +0100If we were to look at the analysts' forecasts available on Finviz, we would see that, at current valuations, we cannot speak of an over- or undervaluation of the S&P 500 index, as we have already had the opportunity to write about. However, we decided t...The price of Brent and WTI crude oil is falling, moving away from fundamentals. Growing expectations of shortages in the market.https://invest.conotoxia.com/investment-research/comments/the-price-of-brent-and-wti-crude-oil-is-falling-moving-away-from-fundamentals-growing-expectations-of-shortages-in-the-markethttps://invest.conotoxia.com/investment-research/comments/the-price-of-brent-and-wti-crude-oil-is-falling-moving-away-from-fundamentals-growing-expectations-of-shortages-in-the-marketThe price of crude oil on global markets has fallen by 8.8% over the past month, despite earlier concerns about possible supply disruptions from the Middle East related to the conflict in Palestine. Nevertheless, no supply disruptions have been reported at present. In order to better understand the oil market situation, let us focus on the latest report from the OPEC cartel. From it, we can find out how the market is currently shaping up, and see forecasts for oil production and output worldwide.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Situation on the oil market</a></li> <li><a href="#heading-scroll2">Will the growing shortage in the oil market lead to price rises?</a></li> </ol> <h2 id="heading-scroll1">Situation on the oil market</h2> The cartel of Middle Eastern countries together with, inter alia, Russia (the so-called OPEC+) has reduced oil production by 4.5% over the last three quarters. Let us recall that OPEC alone accounts for 32.6% of world oil production, and together with Russia, as much as 43.3%. This makes their decisions crucial for oil prices. Nonetheless, the United States is still the largest single producer, accounting for 20.8% of global production of this key resource. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_1_PL_14.11.png" alt="Pie chart of the structure of oil producers" /> Source: Conotoxia, OPEC data However, it is difficult to analyse the oil market without looking at its demand. Here, the United States stands out, accounting for 19.4% of global production, China (15.8%) and the European Union with 12.9%. Hence, the situation in these entities is crucial for global demand. Currently, OPEC analysts forecast that demand in the US, China and the EU will not change in the coming year. However, overall global demand will increase by 2.2% driven by growth in India and other Asian countries. <h2 id="heading-scroll2">Will the growing shortage in the oil market lead to price rises?</h2> Saudi Arabia and Russia announced last week that they would maintain additional voluntary oil production cuts until the end of the year, continuing the current trend. At current production levels, the oil deficit could reach 3.3% of demand volumes in the current quarter and an average of 2.2% for the whole of next year. This is a relatively similar level of shortfall to that seen in 2021, when we saw uninterrupted increases in this crude. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_2_PL_14.11.png" alt="graph of oil market shortages" /> Source: Conotoxia, OPEC data According to OPEC, we can expect increasing pressure to increase production due to the growing deficit. As a result, the price of crude oil could experience a surge in the coming months, even exceeding the USD 100 per barrel level. For its part, the US Department of Energy (EIA) forecasts that global liquid fuel production will increase by 1 million barrels per day in 2024 (an increase of around 1%). According to analysts, the ongoing OPEC+ cuts are intended to offset non-OPEC production growth, which may help keep the global oil market relatively stable. Although the current conflict between Israel and Hamas has not affected the physical supply of crude, uncertainty related to the Middle East war and other global supply conditions could pressure oil prices higher in the coming months, EIA highlights. The price of Brent crude is forecast to rise to an average of US$93 per barrel by 2024. <h4><a href="https://fx.conotoxia.com/users/login/FOREX?utm_source=invest_comments&utm_medium=url_link&utm_campaign=invest_comment_14_11_2023&utm_content=link_2">Log in and take the opportunity!</a></h4> <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_3_14.11.png" alt="oil price chart" /> Source: Conotoxia MT5, XTIUSD, Daily   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comTue, 14 Nov 2023 14:24:00 +0100The price of crude oil on global markets has fallen by 8.8% over the past month, despite earlier concerns about possible supply disruptions from the Middle East related to the conflict in Palestine. Nevertheless, no supply disruptions have been reported...Next week to watch (13 – 17.11.)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-13-17-11https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-13-17-11As mid-November approaches, more and more companies with their financial year's third quarter ending in October report their quarterly earnings. Meanwhile, among other macroeconomic news, all three major economies – the US, the UK, and the Eurozone will report their inflation data for October.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Eurozone Gross Domestic Product (GDP) YoY (Q3)</a></li> <li><a href="#heading-scroll2">US Consumer Price Index (CPI) YoY (October)</a></li> <li><a href="#heading-scroll3">UK Consumer Price Index (CPI) YoY (October)</a></li> <li><a href="#heading-scroll4">Euro Area Consumer Price Index (CPI) YoY (October)</a></li> <li><a href="#heading-scroll5">Stocks to watch</a></li> </ol> <h2 id="heading-scroll1">Tuesday 14.11. 10:00 GMT, Eurozone Gross Domestic Product (GDP) YoY (Q3)</h2> Gross domestic product (GDP) indicates the total value of goods and services produced in a country for a certain period. GDP is an important indicator of the health of an economy because it gives an overall picture of how well or poorly it is doing. If the GDP growth is higher than expected, the economy is in good shape and growing faster than expected. On the other hand, if the GDP growth is lower than expected, the economy performs weaker than anticipated. Furthermore, if the GDP growth is negative for two consecutive quarters, it may be considered a technical recession due to contracting economic output. According to initial estimates, eurozone GDP grew by a modest 0.1% in the third quarter compared with the same period a year earlier, marking its weakest performance since the economic contraction experienced in 2021. This figure fell short of the anticipated 0.2% growth, as indicated by preliminary data. The average GDP annual growth rate in the Eurozone stood at 1.58% from 1995 to 2023. This metric reached its peak at 14.50% in the second quarter of 2021 and hit a historical low of -14.20% in the second quarter of 2020. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_1_10.11.png" alt="chart of euro area GDP" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bullish effect on the EUR, while a lower-than-expected reading could be bearish for the EUR. Impact: EUR <h2 id="heading-scroll2">Tuesday 14.11. 13:30 GMT, US Consumer Price Index (CPI) YoY (October)</h2> The Consumer Price Index (CPI) is a tool used to monitor changes in the prices of goods and services that consumers buy. The CPI is an important indicator because it helps us understand the trends in consumer purchases and how inflation affects their purchasing power. The CPI is calculated based on a basket of goods and services representing typical consumer spending. It includes various categories such as food, housing, transportation, health care, etc. Regular measurements of the CPI allow us to track how the prices of these products and services change over time. A positive CPI indicates an overall increase in the prices of goods and services. On the other hand, a negative CPI means that prices are lower than the year before. By analysing its changes, economists and policymakers may assess the impact of inflation on the economy and take appropriate action. The CPI also matters to consumers because it helps them understand how their money is losing value in the context of rising or falling prices. This information allows them to adjust their spending, plan savings, or make other financial decisions. In September 2023, the US CPI held steady at 3.7%, contrary to market expectations of a slight dip to 3.6%. This stability was achieved due to a milder decline in energy prices, which offset the deceleration in inflation across other categories. Energy costs fell by 0.5%, following a fall of 3.6% in August, mainly due to a rebound in fuel prices. Additionally, the rates of price increases moderated in various sectors: food (3.7% versus 4.3%), new vehicles (2.5% versus 2.9%), apparel (2.3% versus 3.1%), medical care commodities (4.2% versus 4.5%), shelter (7.2% versus 7.3%), and transportation services (9.1% versus 10.3%). However, costs for used cars and trucks, as well as medical care services, continued to decline.  The core CPI, which excludes the volatile components of food and energy prices, slowed to 4.1%, marking its lowest level since September 2021. On a monthly basis, consumer prices increased by 0.4%, a slight deceleration from the 0.6% gain seen in August but surpassing market expectations of 0.3%. Meanwhile, the core rate remained unchanged at 0.3%. According to Trading Economics forecasts, a slight increase to 3.8% may be expected in the upcoming US CPI reading.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_2_10.11.png" alt="chart US CPI inflation" /> Source: Tradingeconomics.com On the one hand, if the reading is higher than expected, it means higher inflation, favouring a fall in the USD. On the other hand, it is an incentive for the Fed to raise interest rates and reduce the money supply. From that point of view, it could suggest a rise in the USD value. However, if the reading is lower than expected, it would mean lower inflation, but it could give the Fed an argument to cut interest rates and increase the money supply. Impact: USD <h2 id="heading-scroll3">Wednesday 15.11. 07:00 GMT, UK Consumer Price Index (CPI) YoY (October)</h2> In the UK, inflation has been almost twice as high as in the US in recent months. In September, UK inflation was unchanged at 6.7%, the same level as the 18-month low recorded in August. However, this defied market expectations of a small decline to 6.6%. The stability in inflation was due to less pronounced price increases in categories such as food and non-alcoholic beverages (12.1% compared to 13.6% in August) and furniture and household goods (3.7% compared to 5.1%). These mitigating factors were counterbalanced by a smaller decrease in energy costs (-0.2% compared to -3.2%), driven by a monthly upturn in motor fuel prices.  Core inflation, which strips out volatile elements such as energy and food, fell to 6.1%, the lowest since January but slightly above the expected 6%. It's important to note that both figures remain well above the Bank of England's 2% target, underlining the country's growing inflationary pressures. This poses a challenge for policymakers, who are expected to maintain interest rates at their current levels in the upcoming meeting. On a monthly basis, the Consumer Price Index (CPI) increased by 0.5% in September, marking the most substantial rise since May. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_3_10.11.png" alt="chart of UK CPI inflation" /> Source: Tradingeconomics.com On the one hand, if the reading is higher than expected, it means higher inflation, favouring a fall in the GBP. On the other hand, it may be an incentive for the BoE to raise interest rates and reduce the money supply. From that point of view, it could suggest a rise in the GBP value. However, if the reading is lower than expected, it would mean lower inflation, but it could give the BoE an argument to cut interest rates and increase the money supply. Impact: GBP <h2 id="heading-scroll4">Friday 17.11. 10:00 GMT, Euro Area Consumer Price Index (CPI) YoY (October)</h2> According to the initial estimates, October's inflation rate in the Eurozone is expected to be 2.9% year-on-year, marking its lowest point since July 2021 and slightly undershooting the market's consensus of 3.1%. Simultaneously, the core inflation rate, which excludes the impact of volatile food and energy prices, also moderated to 4.2% in October, reaching its lowest level since July 2022. It is worth noting that both rates have significantly approached the European Central Bank's target of 2% and are below those of the US and the UK.  Energy costs saw a significant decline of 11.1% (compared to -4.6% in September), and the inflation rates for food, alcohol, and tobacco (7.5% compared to 8.8%), as well as non-energy industrial goods (3.5% compared to 4.1%), eased. In contrast, services inflation remained relatively stable at 4.6%, compared to 4.7% in the preceding month. On a monthly basis, consumer prices inched up by 0.1% in October, following a 0.3% increase in September. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_4_10.11.png" alt="EU CPI inflation graph" /> Source: Tradingeconomics.com On the one hand, if the reading is higher than expected, it means higher inflation, favouring a fall in the EUR. On the other hand, it may be an incentive for the ECB to raise interest rates and reduce the money supply. From that point of view, it could suggest a rise in the EUR value. However, if the reading is lower than expected, it would mean lower inflation, but it could give the ECB an argument to cut interest rates and increase the money supply. Impact: EUR <h2 id="heading-scroll5">Stocks to watch</h2> Home Depot (HD) announcing its earnings results for the quarter ending on 10/2023. Forecast EPS: 3.8. Positive earnings surprise in 9 out of the last 10 reports. Time: Tuesday, November 14, before the market opens.  Cisco (CSCO) announcing its earnings results for the quarter ending on 10/2023. Forecast EPS: 1.03. Positive earnings surprise in 10 out of the last 10 reports. Time: Wednesday, November 15, after the market closes.  Target (TGT) announcing its earnings results for the quarter ending on 10/2023. Forecast EPS: 1.47. Positive earnings surprise in 7 out of the last 10 reports. Time: Wednesday, November 15, before the market opens.  Walmart (WMT) announcing its earnings results for the quarter ending on 10/2023. Forecast EPS: 1.5. Positive earnings surprise in 9 out of the last 10 reports. Time: Thursday, November 16, before the market opens.  Applied Materials (AMAT) announcing its earnings results for the quarter ending on 10/2023. Forecast EPS: 1.99. Positive earnings surprise in 8 out of the last 10 reports. Time: Thursday, November 16, after the market closes.    Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 10 Nov 2023 10:13:00 +0100As mid-November approaches, more and more companies with their financial year's third quarter ending in October report their quarterly earnings. Meanwhile, among other macroeconomic news, all three major economies – the US, the UK, and the Eurozone will...What is the value of the SPX and Nasdaq 100 index?https://invest.conotoxia.com/investment-research/comments/what-is-the-value-of-the-spx-and-nasdaq-100-indexhttps://invest.conotoxia.com/investment-research/comments/what-is-the-value-of-the-spx-and-nasdaq-100-indexThe earnings season for the third quarter of this year appears to have been a success, exceeding analysts' expectations by as much as 79.5%. This result appears to have been one of the factors that triggered the rises in the stock indices. The S&P 500 index, for example, rose by an impressive 6.4% in just one week. Nevertheless, it is worth considering whether it might still be profitable to invest in the major US indices. We will assess them on the basis of the available forecasts, for as Professor Aswath Damodaran says: "keep your eyes on the price" before making investment decisions.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">What is the value of the SPX index?</a></li> <li><a href="#heading-scroll2">What is the value of the Nasdaq 100 index?</a></li> </ol> <h2 id="heading-scroll1">What is the value of the SPX index?</h2> To answer the question of the value of any asset, we need to understand the concept of value, which currently has many different definitions. In finance, value is defined as the present value of future cash flows after discounting them to today. Cash flow can be defined as the direct returns that an investor receives from an investment, such as dividends or share repurchase programmes. Discount, on the other hand, is the interest rate that determines the expected return on an investment in terms of risk. Often, the 10-year government bond yield is used as a benchmark for the discount. If equities would generate a lower return than a bond investment, it begs the question: does it make sense to invest in them at all? <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika-1_07.11.png" alt="asset pricing model" width="1861" height="675" /> Source: Aswath Damodaran According to Yardeni Research, the current dividend yield for the S&P 500 index is 1.61%, and most of the returns to investors are paid out in the form of share buyback programmes. The share repurchase rate for the last 12 months is 2.19%. Therefore, the total return to shareholders is 3.73% (1.61% + 2.19%). This represents as much as 79.8% of the index companies' returns, meaning that a significant proportion is paid out to shareholders. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_2_07.11.png" alt="SPX dividend yield chart" width="1200" height="719" /> Source: Yardeni Research, Standard & Poor’s Since 2008, the average annual growth of the S&P 500 index has been 8.7%, which is taken as the discount rate. Standard & Poor's analysts predict that average annual earnings growth over the next five years could be 7.9%. As a result of this calculation, the value of the S&P 500 index would be 4257.67, which is around the current index price. This could mean that the S&P 500 index is currently neither overvalued nor undervalued. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_3_ENG_07.11.png" alt="SPX valuation model" width="1200" height="316" /> Source: Conotoxia (own analysis) <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_4_07.11.png" alt="SPX daily chart" /> Source: Conotoxia MT5, US500, Daily <h2 id="heading-scroll2">What is the value of the Nasdaq 100 index?</h2> The Nasdaq 100 Index is largely technology-driven and has a higher level of earnings reinvestment, mainly due to its higher reinvestment earnings potential. The earnings payout rate to shareholders of this index is lower than that of the S&P 500 at 53.5%, with a dividend yield of 0.65% and a share repurchase programme yield of 2.76%. The total return to shareholders is therefore 3.41% (0.65% + 2.76%). Since 2008, the index has grown at an average annual rate of 10.9%, which is taken as the discount rate. The projected weighted earnings growth rate by analysts for the next five years is 16.13%. As a result of these calculations, the value of the Nasdaq 100 index would be 12291.06, which could represent a correction of 19% from its current value. Thus, it appears that the Nasdaq 100 Index is showing signs of overvaluation and its upside potential could be significantly limited in the coming years.   <a href="https://fx.conotoxia.com/users/login/FOREX?utm_source=invest_comments&utm_medium=url_link&utm_campaign=invest_comment_7_11_2023&utm_content=link_2">Log in and take the opportunity!</a> <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_05.ENG_07.11.png" alt="Nasdaq 100 valuation model" width="1201" height="353" /> Source: Conotoxia (own analysis) <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_6_07.11.png" alt="Nasdaq 100 daily chart" /> Source: Conotoxia MT5, US100, Daily   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comTue, 07 Nov 2023 16:41:00 +0100The earnings season for the third quarter of this year appears to have been a success, exceeding analysts' expectations by as much as 79.5%. This result appears to have been one of the factors that triggered the rises in the stock indices. The S&P 500 i...Next week to watch (6 – 10.11.)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-6-10-11https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-6-10-11Most of the major companies have already reported their third-quarter results, while next week, we will be able to learn more about companies such as Berkshire Hathaway, Walt Disney and AstraZeneca. On the macroeconomic front, October inflation data will be released from Germany, and the National Bank of Poland will vote on whether to continue its rate cutting path. Meanwhile, the UK will release Q3 GDP growth data. <h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Germany Consumer Price Index (CPI) YoY (October)</a></li> <li><a href="#heading-scroll2">Poland Interest Rate Decision</a></li> <li><a href="#heading-scroll3">UK Gross Domestic Product (GDP) QoQ (Q3)</a></li> <li><a href="#heading-scroll4">Stocks to watch</a></li> </ol> <h2 id="heading-scroll1">Wednesday 8.11. 7:00 GMT, Germany Consumer Price Index (CPI) YoY (October)</h2> The Consumer Price Index (CPI) is a tool used to monitor changes in the prices of goods and services that consumers buy. The CPI is an important indicator because it helps us understand the trends in consumer purchases and how inflation affects their purchasing power. The CPI is calculated based on a basket of goods and services representing typical consumer spending. It includes various categories such as food, housing, transportation, health care, etc. Regular measurements of the CPI allow us to track how the prices of these products and services change over time. A positive CPI indicates an overall increase in the prices of goods and services. On the other hand, a negative CPI means that prices are lower than the year before. By analysing its changes, economists and policymakers may assess the impact of inflation on the economy and take appropriate action. The CPI also matters to consumers because it helps them understand how their money is losing value in the context of rising or falling prices. This information allows them to adjust their spending, plan savings, or make other financial decisions. According to preliminary estimates, German consumer price inflation fell sharply in October to 3.8% year-on-year. This was a significant decline from the previous month's rate of 4.5% and slightly below the market's expectation of 4%. This level of inflation was the lowest recorded since August 2021. The decrease in inflation was driven by several factors, including a noteworthy easing in food inflation, which reached its lowest level since February 2022, standing at 6.1% compared to September's 7.5%. Additionally, energy prices experienced a decline for the first time since January 2021, recording a decrease of 3.2% as opposed to the 1.0% increase in the previous month. In contrast, services inflation remained relatively stable, at 3.9% in October, which was only a slight change from last month's rate of 4.0%. Furthermore, core inflation, which excludes the influence of volatile items like food and energy, also exhibited a decline. It decreased to 4.3% in October, down from September's 4.6%, marking its lowest point since August 2022. Looking at the monthly perspective, consumer prices remained unchanged in October, in contrast to the 0.3% increase observed in September. This outcome fell slightly short of the market's anticipated figure of 0.2%. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_1_03.11.png" alt="chart of the German CPI" width="1520" height="675" /> Source: Tradingeconomics.com On the one hand, if the reading is higher than expected, it means higher inflation, favouring a fall in the euro. On the other hand, it is an incentive for the ECB to raise interest rates and reduce the money supply. From that point of view, it could suggest a rise in the euro's value. However, if the reading is lower than expected, it would mean lower inflation, but it could give the ECB an argument to cut interest rates and increase the money supply. Impact: EUR <h2 id="heading-scroll2">Wednesday 8.11., Poland Interest Rate Decision</h2> The National Bank of Poland (NBP) Monetary Policy Committee members vote on whether to raise, decrease, or leave interest rates unchanged. These decisions affect the currency's value, and interest rate policy is among the key instruments to regulate inflation. Investors closely follow central banks' decisions and changes in the level of interest rates, as this information can be crucial to their trading strategies. The currency's value tends to rise when interest rates are high, as they attract investors seeking higher returns on their deposits. Conversely, when interest rates are low, the currency's value tends to fall as investors look for other places to invest their money. In October, the National Bank of Poland carried out a reduction in its benchmark reference rate, lowering it by 25 basis points to 5.75%. This decision aligned with market expectations and followed a surprising and significant 75-basis-point reduction in September. The lombard and deposit rates were also adjusted and now stand at 6.25% and 5.25%, respectively. This monetary policy adjustment was prompted by Poland's weakened economic environment, characterised by subdued demand and reduced price pressures. In September, the country's inflation rate decelerated notably to 8.2%, marking the first time it had entered single-digit territory since February 2022. The NBP has underlined its commitment to closely monitoring global developments and is prepared to intervene in the foreign exchange market to reduce excessive volatility if necessary. Additionally, it has indicated its intent to implement further rate cuts before the end of the year. However, the current forecast suggests unchanged interest rates during the upcoming meeting. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_2_03.11.png" alt="chart of interest rates in Poland" width="1459" height="677" /> Source: Tradingeconomics.com A higher-than-expected rate may be positive for the PLN and negative for the stock market, while a lower-than-expected rate may be negative for the PLN and positive for the stock market. Impact: PLN <h2 id="heading-scroll3">Friday 10.11. 07:00 GMT, UK Gross Domestic Product (GDP) QoQ (Q3)</h2> Gross domestic product (GDP) indicates the total value of goods and services produced in a country for a certain period. GDP is an important indicator of the health of an economy because it gives an overall picture of how well or poorly it is doing. If the GDP growth is higher than expected, the economy is in good shape and growing faster than expected. On the other hand, if the GDP growth is lower than expected, the economy performs weaker than anticipated. Quarter-on-quarter economic growth in the United Kingdom was officially confirmed at 0.2% in the second quarter of 2023. This followed a slightly revised upward expansion of 0.3% in the preceding three-month period. The growth was underpinned by various factors, including a 0.5% increase in household consumption, albeit slightly lower than the 0.7% growth recorded in the first quarter. This consumption was driven by spending on categories such as housing, water, electricity, gas, transport, and recreation and culture. Furthermore, fixed investment demonstrated an increase of 0.8%, though this was notably lower than the 2.5% growth observed previously. This growth was propelled by a significant 4.1% rise in business investment. Government consumption expenditure also experienced an upturn, increasing by 2.5% in contrast to the 1.2% decline seen earlier. This increase mainly reflected higher spending in public administration and defence, as well as, to a lesser extent, in the healthcare sector. Conversely, net trade had a negative impact on the UK's GDP. This was due to a 0.9% decline in exports and a 2.2% import rebound during the second quarter. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_3_03.11.png" alt="UK GDP graph" width="1450" height="675" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bullish effect on the GBP, while a lower-than-expected reading could be bearish for the GBP. Impact: EUR <h2 id="heading-scroll4">Stocks to watch</h2> Berkshire Hathaway B (BRKb) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 4.34. Positive earnings surprise in 7 out of the last 10 reports. Time: Monday, November 6.  Gilead (GILD) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 1.92. Positive earnings surprise in 6 out of the last 10 reports. Time: Tuesday, November 7, after the market closes.  Walt Disney (DIS) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 0.7356. Positive earnings surprise in 6 out of the last 10 reports. Time: Wednesday, November 8, after the market closes.  AstraZeneca (AZN) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 1.71. Positive earnings surprise in 9 out of the last 10 reports. Time: Thursday, November 9, before the market opens.    Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 03 Nov 2023 11:06:00 +0100Most of the major companies have already reported their third-quarter results, while next week, we will be able to learn more about companies such as Berkshire Hathaway, Walt Disney and AstraZeneca. On the macroeconomic front, October inflation data wil...The domino effect – rising Treasury yields and their impact on the housing market https://invest.conotoxia.com/investment-research/research-articles/the-domino-effect-rising-treasury-yields-and-their-impact-on-the-housing-markethttps://invest.conotoxia.com/investment-research/research-articles/the-domino-effect-rising-treasury-yields-and-their-impact-on-the-housing-marketAs many analysts recall the anniversary of Black Monday and discuss the possibility of a repeat performance this October, with the S&P 500 and other stock market indices potentially losing more than 20% in a single day, rising Treasury yields could affect many different areas of the economy. One of these - the housing market - is often considered to play a pivotal role in the economic well-being of a nation, serving as both a significant driver of economic activity and an indicator of overall economic health. When the housing market weakens, it may send ripples across various sectors of the economy, impacting everything from consumer spending to the financial system. In this article, we will explore the current state of the US housing market and how the deepening cracks in it could reverberate throughout the broader economy.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">How do rising Treasury yields affect the housing market?</a></li> <li><a href="#heading-scroll2">Recent developments in the US housing market</a></li> <li><a href="#heading-scroll3">Weakening housing market's effect on other parts of the economy</a></li> <li><a href="#heading-scroll4">Conclusion</a></li> </ol> <h2 id="heading-scroll1">How do rising Treasury yields affect the housing market?</h2> First things first, let us delve into the interconnectedness between Treasury yields and the housing market. The housing market and the broader financial landscape are intrinsically connected. One of the key indicators of this relationship is the influence of rising Treasury yields on the housing market. As Treasury yields climb, they may create a chain reaction that touches various aspects of the real estate sector.  Before we explore their effects, let's briefly explain what Treasury yields are. The US government issues treasury bonds, notes, and bills to raise funds for various purposes. The yield on these securities represents the return an investor can expect to acquire on their investment. Treasury yields are influenced by economic conditions, inflation expectations, and the Federal Reserve's monetary policy. The recent increase in Treasury yields has been mainly attributed to the market's expectations of rising interest rates to combat inflation.  Rising Treasury yields often lead to an increase in long-term interest rates, including mortgage ones. As Treasury yields rise, financial institutions typically adjust their lending rates in response. Higher mortgage rates may deter potential homebuyers as the cost of borrowing becomes more expensive. Below is a graphic visualisation of the close relationship between the 10-year Treasury yield and the 30-year fixed mortgage rate in the US.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_1_31.10.png" alt="10 and 30 year bond yields" /> Source: fred.stlouisfed.org Historically, the spread between the two rates has mainly fluctuated between 1.00 and 2.00, with an average spread of 1.82 since 2004. The spread tends to increase during periods of falling government bond yields, which can be explained by the slower reaction of financial institutions to adjust mortgage rates accordingly. However, the spread between the two measures has increased significantly since March 2022 and is now around 3.00, despite the fact that Treasury yields have risen rather than fallen. The only two times when the spread approached 3.00 (but never exceeded it) were during the Great Financial Crisis in 2008 and the early Covid-19 pandemic in 2020 due to a sharp decline in Treasury yields. As a result, homebuyers are now challenged with not only unusually high Treasury yields but also with interest rate markups as high as never before. This, in turn, may slow down home sales and affect the demand for housing. Furthermore, as mortgage rates increase, demand for homes could weaken, putting downward pressure on prices. However, some sellers may be less inclined to lower their asking prices, leading to a potential slowdown in the rate of price appreciation rather than outright declines. Real estate investors often take cues from Treasury yields. As bond yields rise, the fixed-income investment becomes more attractive, potentially diverting investment away from the housing market. A shift in investor sentiment can impact the demand for homes and affect housing market dynamics. And lastly, the perception of rising interest rates may influence consumer and investor sentiment. It may lead to concerns about the overall economic landscape and the stability of the housing market. These worries could further affect demand and real estate market activity. <h2 id="heading-scroll2">Recent developments in the US housing market</h2> Housing market measurements may act as a crucial indicator of the processes within the economy. Looking at the graph below, a slow but strong trend of rising numbers of houses sold and median sales prices may be observed from the Great Financial Crisis in 2008 until the beginning of the Covid-19 pandemic. Close-to-0 interest rates paired with extensive Covid-19 government aid resulted in a sharp increase in new one-family houses sold in 2020 and long-lived growth in sales prices, which reached its peak only in October 2022. Unusual for both measures, the number of houses sold and average prices have been moving in opposite directions since early 2020. Since its peak, the median sales price has decreased from 496,800 USD to 430,300 USD (a 13% drop). Meanwhile, in the same period, the number of houses sold has increased from 577,000 to 675,000 (a nearly 17% growth). However, the latest number of new one-family houses sold showed a drop of 8.7% compared to the previous month. It was also worse than expected (700,000), indicating that the US housing market may face some challenges. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_2_31.10.png" alt="Median housing price graph" width="1932" height="689" /> Source: fred.stlouisfed.org The graph above may suggest that until now, Treasury yields have had a higher impact on the sales prices rather than the number of houses sold. In the meantime, the number of homes sold could be increasing due to falling sales prices. However, it is worth monitoring further developments in the housing market and whether the previous month's drop in the number of houses sold may show a new trend of lowering activity within the housing market.  Meanwhile, the Mortgage Bankers Association has reported that as the 30-year fixed mortgage rate exceeded 7%, the number of US mortgage applications for home purchases fell to the lowest level in 28 years last month. It may be explained by the historically high level of annual income needed to afford a house in the US at a median price of 412,000 USD. Calculated at a 7.20% mortgage rate, with a down payment of 20% and assuming 30% of income spent on housing costs, an individual should earn at least 114,000 USD annually to afford the above-mentioned scenario. However, the median salary in the US has been estimated at 70,000 USD, according to the Federal Reserve. Such a situation may not be sustainable in the long term and could provoke some turbulence in the housing market.  <h2 id="heading-scroll3">Weakening housing market's effect on other parts of the economy</h2> The housing market is linked to many other parts of the economy, as it not only provides shelter to every household through ownership, renting or other arrangements but also stimulates or slows consumer spending, affects construction and other parts of the labour market, and even potentially influences a general economic slowdown through GDP growth estimates. Below is a broader insight on how the housing market may affect other parts of the economy: <ol> <li>Consumer Spending - one of the most direct effects of a weakening housing market is on consumer spending. As home prices stagnate or decline, homeowners may find their wealth eroding. Consequently, they become less willing to spend on other goods and services. This reduction in discretionary spending could affect industries such as retail, restaurants, and entertainment.</li> <li>Construction and Real Estate - the construction and real estate sectors are particularly vulnerable to housing market downturns. As demand for new homes diminishes, job losses in construction and related industries often follow. Real estate agents, mortgage brokers, and property developers may also experience reduced income and fewer job opportunities.</li> <li>Financial Institutions - financial institutions, especially those heavily invested in mortgages, feel the impact of a weak housing market. Falling home prices devalue mortgage-backed securities, leading to potential losses for banks and investors. This can jeopardise the stability of the financial system, as it did during the Great Financial Crisis in 2008.</li> <li>Labour Market - the housing market significantly contributes to employment, both directly and indirectly. A slowdown in the housing market could lead to job losses in the construction, real estate and related sectors, with a knock-on effect on the overall unemployment rate. The labour market is one of the key indicators that the Fed monitors to determine whether further monetary tightening is viable. Unemployment rates have been historically low since the beginning of 2022. However, a slight increase has been observed in the last two months. </li> <li>Consumer Confidence - a weak housing market may undermine consumer confidence. When homeowners witness the value of their homes declining, they often become more cautious about their financial prospects. Lower confidence levels could lead to reduced spending and slower economic growth. The US Conference Board's Consumer Confidence Index is currently above 100. However, it has been decreasing for the last two months. Furthermore, the Expectations index has fallen below 80, historically signalling a recession within the following year. </li> <li>Home Equity Loans and Mortgages - as home values fall, homeowners may encounter difficulty in refinancing their mortgages or obtaining home equity loans. This limitation can impact homeowners' ability to access credit, influencing their spending habits and financial flexibility. However, the US housing market is certainly not there yet. In fact, the US Mortgage Bankers Association estimates that home prices may continue to appreciate for the next three years due to low inventories. </li> <li>Government Revenues - weaker housing markets can lead to reduced property tax revenue for local governments, potentially leading to budgetary challenges. Additionally, financial distress among homeowners due to declining home values may increase the demand for social services, further straining government resources.</li> <li>Supply Chain Effects - the construction industry relies on a vast network of materials and supplies. A housing market slowdown may disrupt suppliers and manufacturers in the construction supply chain, which may have a broader impact on the manufacturing and distribution sectors.</li> <li>Economic Growth - a slump in the housing market could drag down overall economic growth. Housing contributes significantly to GDP through construction and related spending. Thus, a downturn in the housing market could contribute to a broader economic slowdown. As GDP growth data are generally reported at a later stage (a lagging indicator), we may be able to measure the damage done to the economy as a whole but not anticipate it as the housing market weakens.</li> </ol> <h2 id="heading-scroll4">Conclusion</h2> The impact of a weakening housing market on the broader economy is substantial and multifaceted. However, the severity of the downturn, the overall economic climate, and government policy responses may all influence the extent of these effects. Government intervention and fiscal policy often play a crucial role in mitigating the effects and stabilising both the housing market and the wider economy. Nevertheless, the Federal Reserve's current monetary policy is focused on reducing inflation, which is expected to slow the overall economy, including the housing market. Fed officials are monitoring macroeconomic data to assess whether further tightening may be needed, and recent reports on employment and other data suggest that the economy is still too resilient to end monetary tightening. This may mean that there is still room for interest rates to rise, putting further pressure on the housing market and other parts of the economy.  Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comTue, 31 Oct 2023 11:27:00 +0100As many analysts recall the anniversary of Black Monday and discuss the possibility of a repeat performance this October, with the S&P 500 and other stock market indices potentially losing more than 20% in a single day, rising Treasury yields could affe...Impact of the Central Communication Port (CPK) on the region and exchange rates: EUR/PLN, EUR/CZK and EUR/HUFhttps://invest.conotoxia.com/investment-research/comments/impact-of-the-central-communication-port-cpk-on-the-region-and-exchange-rates-eur-pln-eur-czk-and-eur-huf-1https://invest.conotoxia.com/investment-research/comments/impact-of-the-central-communication-port-cpk-on-the-region-and-exchange-rates-eur-pln-eur-czk-and-eur-huf-1The Central Communication Port project is generating a lot of excitement. It is going to be the first intercontinental airport in this region of the world with a capacity of around 40-45 million passengers per year. Thus, it would surpass such airports as Munich, London-Gatwick or Barcelona El Prat, among others. According to the adopted timetable, the partial opening of CPK for passengers would take place in 2028. Is this huge investment, estimated at around USD 8 billion, likely to pay off? What impact could it have on the currencies and markets of Poland and neighbouring countries?<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">CPK an opportunity for Central and Eastern Europe</a></li> <li><a href="#heading-scroll2">Impact of CPK on EUR/PLN, EUR/CZK and EUR/HUF exchange rates</a></li> <li><a href="#heading-scroll3">Will Poland benefit from CPK?</a></li> </ol> <h2 id="heading-scroll1">CPK an opportunity for Central and Eastern Europe</h2> As well as having a significant impact on intercontinental passenger transport, the CPK will have a huge impact on air freight transport in the region. Currently, the largest air cargo hubs in Europe are located in Germany and France, making the entire CEE region dependent on them. Frankfurt Airport processes around 2 million tonnes of freight annually. In comparison, all air freight from Poland in 2021 was only 91,000 tonnes. This means that CEE exporters and importers, especially those with intercontinental operations, are now practically forced to use German airports. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_1_30.10.png" alt="map of airports in europe" /> Source: transportgeography   Air transport at the Central Communication Port would grow to 200,000 tonnes per year by 2028, with the potential to reach around 550,000 tonnes. The CPK project is not only the construction of the airport, but also the expansion of the railway line and roads, which will facilitate access to the airport for visitors coming from, among others: Czech Republic, Slovakia, Lithuania or even Hungary. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_2_30.10.jpg" alt="map of railway investments in poland" width="1200" height="1058" /> Source: CPK, Super Express <h2 id="heading-scroll2">Impact of CPK on EUR/PLN, EUR/CZK and EUR/HUF exchange rates</h2> The construction of CPK may favour an increase in export potential from Poland, hence the natural long-term beneficiary of CPK's launch appears to be the zloty. In the long term, this may lead to a decline in the EUR/PLN exchange rate. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/obrazek3.30.10.png" alt="EURPLN chart" /> Source: Conotoxia MT5, EURPLN, Daily The Czech koruna and the Hungarian forint are other currencies that stand to gain from the potential of the Central Communication Port. Currently, the vast majority of these economies' exports are directed to Germany. Poland is currently the Czech Republic's third largest economic partner, accounting for 7.1% of exports (compared to Germany's 33%). The planned construction of CPK anticipates that it will increase not only Poland's share of exports, but also its overall volume. This is due to the good rail accessibility between the two countries and the natural competitiveness of transporting goods by air. Therefore, we can expect CPK to have a long-term positive impact on the exports of the Czech Republic, which has maintained its position as a net exporter for many years. This would in turn increase the competitiveness of the Czech koruna. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_3_30.10.png" alt="Czech Republic's exports by country" /> Source: Tradingeconomics <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/obrazek5_30.10.png" alt="EURCZK chart" /> Source: Conotoxia MT5, EURCZK, Daily Another CEE country and currency with the potential to gain from the launch of CPK is Hungary and its forint, which has weakened significantly in recent years. As with the Czech Republic, Hungary's main economic partner is Germany and Western Europe. Poland currently ranks fifth in terms of exports from Hungary, accounting for 4.3% of the overall share. It is also important to note Hungary's growing involvement in cooperation with China under the Belt and Road initiative. According to AEI data, Hungary is the largest beneficiary of Chinese investment in the entire region, currently amounting to USD 9.5 billion. This compares to USD 14 billion of other investments in Central and Eastern Europe. Hungarians are strongly betting on future economic cooperation with China, but intercontinental transport is currently hampered. CPK would have the potential to unlock some of this, which could have a positive impact on the forint's quotations. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/obrazek6.30.10.png" alt="EURHUF chart" /> Source: Conotoxia MT5, EURHUF, Weekly <h2 id="heading-scroll3">Will Poland benefit from CPK?</h2> The Central Communication Port infrastructure is forecast to generate close to US$50 billion in cargo handling revenues by 2060. According to a report by EY consulting firm, the total costs associated with the construction of the CPK, including costs from airport investments of around US$10 billion, with more than US$8 billion coming from private investors and debt financing, are projected at around US$1.25 billion from the state budget. The EY report uses forecasts from the International Air Transport Association (IATA) and Oxford Economics (OE). Under the report's baseline scenario, imports and exports of goods are projected to increase significantly due to CPK operations, which could result in increased customs and VAT revenues. According to forecasts, CPK could gain as much as a 20% share of the cargo market in Central and Eastern Europe. Another report, prepared by Kearney, focusing on a comparative assessment of similar projects on a global scale, highlights the potential GDP growth in Poland in the period up to 2040, which could be in the range of USD 4-5.5 billion per year. This is followed by the creation of 240,000 to 290,000 new jobs. Moreover, the company points to the attractive return on investment of this project.   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comMon, 30 Oct 2023 13:38:00 +0100The Central Communication Port (CPK) project is generating a lot of excitement. It is going to be the first intercontinental airport in this region of the world with a capacity of around 40-45 million passengers per year. Thus, it would surpass such air...Next week to watch (30.10. – 03.11.)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-30-10-03-11https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-30-10-03-11We have a busy week ahead with the Federal Reserve and the Bank of England voting on whether to keep interest rates unchanged, which could allow the stock market to regain some strength. Furthermore, China will report on its manufacturing PMI data, possibly continuing its recent expansion. At the same time, Germany will provide preliminary data on whether it has managed to avoid sliding into a recession with its Q3 2023 GDP growth data. Inflation in the Eurozone and the unemployment rate in the US may provide investors with feedback on how the current monetary tightening policy is affecting the broader economy. Simultaneously, numerous companies continue with their Q3 2023 earnings report announcements. <h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">China Manufacturing Purchasing Managers Index PMI (October)</a></li> <li><a href="#heading-scroll2">Germany Gross Domestic Product (GDP) QoQ (Q3 preliminary)</a></li> <li><a href="#heading-scroll3">Eurozone Consumer Price Index (CPI) YoY (October)</a></li> <li><a href="#heading-scroll4">Federal Reserve Interest Rate Decision</a></li> <li><a href="#heading-scroll5">Bank of England Interest Rate Decision</a></li> <li><a href="#heading-scroll6">US Unemployment Rate (October)</a></li> <li><a href="#heading-scroll7">Stocks to watch</a></li> </ol> <h2 id="heading-scroll1">Tuesday 31.10. 01:30 GMT, China Manufacturing Purchasing Managers Index PMI (October)</h2> The PMI index for China's manufacturing sector is a monthly indicator that measures economic activity in the sector. It is compiled by the China Federation of Logistics & Purchasing (CFLP) and the China Logistics Information Centre (CLIC) based on data provided by the National Bureau of Statistics (NBS). The Li & Fung Research Center compiles and provides the PMI report in English.  More than 700 manufacturing companies across China receive questionnaires about their purchasing and supply situations each month. As reported by purchasing managers, the PMI provides insight into the manufacturing industry's activity level. This measure provides an understanding of the state of China's manufacturing industry, as it is assumed that purchasing managers have access to first-hand data on the performance of their companies. A reading above 50 indicates expansion, while a reading below 50 indicates contraction. In September 2023, China's Manufacturing PMI showed improvement, increasing to 50.2 from 49.7 in August. It exceeded market expectations of 50.0 and marked the first expansion in factory activity since March. The boost in manufacturing activity could be attributed to recent economic stimulus measures implemented by Beijing to support the country's recovery. Several key indicators within the PMI survey pointed to this positive trend. Factory output continued to rise for the fourth consecutive month, with the rate of expansion reaching its highest level in six months, registering at 52.7, compared to 51.9 in August. New orders also saw a steady increase, extending the growth for the second consecutive month, with a reading of 50.5, up from 50.2. Moreover, purchasing activity showed a slight strengthening, with a reading of 50.7, compared to the previous 50.5. In terms of business sentiment, confidence remained positive, with a reading of 55.5, slightly down from 55.6. This indicates that manufacturers continue to hold an optimistic outlook regarding future business conditions. However, it's important to monitor the ongoing challenges, such as weak employment and the dynamics of input and output prices, which could influence the sustainability of this recovery. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PMI_Chin_25.10.png" alt="chart of China PMI" /> Source: Tradingeconomics.com 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. Impact: CNY <h2 id="heading-scroll2">Tuesday 31.10. 09:00 GMT, Germany Gross Domestic Product (GDP) QoQ (Q3 preliminary)</h2> Gross domestic product (GDP) indicates the total value of goods and services produced in a country for a certain period. GDP is an important indicator of the health of an economy because it gives an overall picture of how well or poorly it is doing. If the GDP growth is higher than expected, the economy is in good shape and growing faster than expected. On the other hand, if the GDP growth is lower than expected, the economy performs weaker than anticipated. In the second quarter of 2023, the German economy exhibited a period of stagnation when compared to the previous three months. This followed two consecutive quarters of economic contraction. During this period, household consumption managed to stabilise after a prior decline in the preceding winter half-year, and government spending showed a modest increase of 0.1%, effectively marking the end of a year-long recessionary phase. However, it's worth noting that the growth rate in gross fixed capital formation experienced a significant slowdown, decelerating to 0.4% from the 1.7% seen in the first quarter. This deceleration was primarily attributed to reduced investments in the construction sector (0.2%, down from 2.7%) and machinery and equipment (0.6%, down from 2.1%). Regarding its contribution to GDP growth, inventory changes played a role by adding 0.4 percentage points. However, the external demand component had a detrimental effect, subtracting 0.6 percentage points, mainly due to a decrease in exports. When examining the German economy's performance on a yearly basis, it experienced a contraction of 0.2% in the second quarter. This represents a continuation of the economic challenges in Europe's largest economy, which is struggling with issues relating to investment, exports and overall growth. According to analysts at Trading Economics, the first preliminary data for German GDP growth in the third quarter is expected to show a contraction of -0.1%. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_niemiec_27.10.png" alt="graph of German GDP" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bullish effect on the EUR, while a lower-than-expected reading could be bearish for the EUR. Impact: EUR <h2 id="heading-scroll3">Tuesday 31.10. 10:00 GMT, Eurozone Consumer Price Index (CPI) YoY (October)</h2> The Consumer Price Index (CPI) is a tool used to monitor changes in the prices of goods and services that consumers buy. The CPI is an important indicator because it helps us understand the trends in consumer purchases and how inflation affects their purchasing power. The CPI is calculated based on a basket of goods and services representing typical consumer spending. It includes various categories such as food, housing, transportation, health care, etc. Regular measurements of the CPI allow us to track how the prices of these products and services change over time. A positive CPI indicates an overall increase in the prices of goods and services. On the other hand, a negative CPI means that prices are lower than the year before. By analysing its changes, economists and policymakers may assess the impact of inflation on the economy and take appropriate action. The CPI also matters to consumers because it helps them understand how their money is losing value in the context of rising or falling prices. This information allows them to adjust their spending, plan savings, or make other financial decisions. In September 2023, the Eurozone's inflation rate was officially verified at 4.3% on a year-on-year basis. This marked a notable decrease from the 5.2% rate observed in August and represented the lowest level of inflation since October 2021. The deceleration in inflation was primarily attributed to a slower increase in prices for various categories, including services (4.7% in September compared to 5.5% in August), non-energy industrial goods (4.1% compared to 4.7%), and food, alcohol, and tobacco (8.8% compared to 9.7%). In contrast, energy costs continued to decline, with a rate of -4.6% in September, as opposed to -3.3% in August. Furthermore, the core inflation rate, which excludes the more volatile components of food and energy prices, was also confirmed at 4.5% in September. This figure represented the lowest level of core inflation since August 2022. Among the Eurozone's largest economies, the Harmonized Index of Consumer Prices (HICP) rates experienced various changes. Notably, Germany recorded a decline in its inflation rate to 4.3% in September, down from 6.4% in the previous month. The Netherlands also saw a significant shift, as its inflation rate dropped to -0.3% in September, a notable reduction from the 3.4% rate in August. In contrast, France's inflation rate remained stable at 5.7%. In Italy and Spain, however, inflation accelerated. Italy's inflation rate rose to 5.6% in September from 5.5% in August. Spain's inflation rate rose to 3.3% in September from 2.4% in August. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_CPI_EU_27.10.png" alt="chart CPI inflation euro area" /> Source: Tradingeconomics.com On the one hand, if the reading is higher than expected, it means higher inflation, favouring a fall in the euro, but on the other hand, it is an incentive for the ECB to raise interest rates and reduce the money supply. From that point of view, it could suggest a rise in the euro's value. However, if the reading is lower than expected, it would mean lower inflation, but it could give the ECB an argument to cut interest rates and increase the money supply. Impact: EUR <h2 id="heading-scroll4">Wednesday, 01.11. 18:00 GMT, Federal Reserve Interest Rate Decision</h2> Federal Open Market Committee (FOMC) members vote on whether to raise, decrease, or leave interest rates unchanged. These decisions affect the currency's value, and interest rate policy is among the key instruments to regulate inflation. Investors closely follow central banks' decisions and changes in the level of interest rates, as this information can be crucial to their trading strategies. The currency's value tends to rise when interest rates are high, as they attract investors seeking higher returns on their deposits. Conversely, when interest rates are low, the currency's value tends to fall as investors look for other places to invest their money. During an address at the Economic Club of New York, Federal Reserve Chair Jerome Powell emphasised the Fed's cautious approach. He stated that policymakers would base their decisions on the level of additional policy adjustments and the duration of policy restrictiveness on a comprehensive assessment of incoming data, the evolving economic outlook, and the overall risk balance. Powell further highlighted that the current tight policy had a dampening effect on economic activity and inflation. Nevertheless, he pointed out that if there were additional indications of consistent growth above the long-term trend or cessation in the labour market's easing tightness, it might endanger the progress towards achieving the inflation target and necessitate further monetary policy tightening. The Fed Chair also underscored the persistence of elevated inflation levels, noting that achieving a sustainable return to the 2% inflation goal would likely require a period of economic growth below the long-term trend and some additional softening in labour market conditions. In its September 2023 meeting, the Federal Reserve retained the target range for the federal funds rate at an elevated level, which was the highest it had been in 22 years, specifically at 5.25% to 5.5%. This decision reflects the Fed's ongoing commitment to addressing economic conditions and maintaining a balance between inflation control and economic growth. The CME FedWatch tool forecasts that the federal funds rate will stay unchanged in the upcoming FOMC meeting.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_USA_27.10.png" alt="US interest rate graph" /> Source: Tradingeconomics.com A higher-than-expected rate may be positive for the USD and negative for the stock market, while a lower-than-expected rate may be negative for the USD and positive for the stock market. Impact: USD, S&P500, Nasdaq 100, Dow Jones and other indices <h2 id="heading-scroll5">Thursday, 02.11. 12:00 GMT, Bank of England Interest Rate Decision</h2> At its last meeting, the Bank of England decided to keep its key interest rate at 5.25%, which came as a surprise given that it was expected to rise by 25 basis points to 5.50%. Nevertheless, the decision kept borrowing costs at their highest level since 2008. Policymakers adopted a cautious, wait-and-see approach after reviewing the latest inflation and labour market data. These data suggested that the cumulative effects of previous policy tightening might be starting to materialise. This marked a significant development as it was the first instance of a pause in policy tightening in almost two years. Prior to this, the central bank had executed an unprecedented series of interest rate hikes, totalling 515 basis points. The BoE conveyed its expectation that CPI inflation would experience a notable reduction soon. This was attributed to the anticipated decrease in energy-related inflation, despite renewed upward pressure from oil prices, as well as the further decline in food and core goods price inflation. No further interest rate hikes are expected this year, according to consensus and Trading Economics analysts.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_UK_25.10.png" alt="interest rate graph United Kingdom" /> Source: Tradingeconomics.com A higher-than-expected rate may be positive for the GBP and negative for the stock market, while a lower-than-expected rate may be negative for the GBP and positive for the stock market. Impact: GBP, FTSE 100 and other indices <h2 id="heading-scroll6">Friday 03.11. 12:30 GMT, US Unemployment Rate (October)</h2> The unemployment rate is the percentage of people without a job actively seeking employment in the previous month relative to the total number of people of working age or in the labour market. A high unemployment rate means that a large number of people are out of work despite actively seeking employment. A low unemployment rate indicates a stable labour market and greater availability of jobs.  Unemployment rates are important for economic analysis and can affect social and economic aspects. A high unemployment rate is associated with lower incomes and increased poverty, while a low unemployment rate promotes increased wages and social welfare. Governments and policymakers monitor the unemployment rate to assess the effectiveness of employment policies and take action to create jobs and support the unemployed. However, it should be remembered that the unemployment rate is one of many tools for assessing the labour market. Analysing other indicators, such as the labour force participation rate or wages, is also essential. The US unemployment rate held steady at 3.8% in September, unchanged from the previous month and slightly above market expectations of 3.7%. This outcome underscores the enduring tightness of the labour market in comparison to historical standards. It provides further latitude for the Fed to maintain borrowing costs at levels considered restrictive for an extended period. However, the slight uptick in the unemployment rate in the last two months may indicate that the Fed's tightening activities are working.  The number of individuals classified as unemployed remained largely unchanged at approximately 6.36 million people. The U-6 unemployment rate, a broader measure that includes those who have given up looking for work and those working part-time because they cannot find full-time work, fell slightly to 7%. This was after reaching a 15-month high of 7.1% in August. At the same time, the labour force participation rate remained unchanged at 62.8%. This is the highest rate since February 2020.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_bezrobocie_USA_27.10.png" alt="graph US unemployment rate" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bearish effect on the USD, while a lower-than-expected reading could be bullish for the USD. Impact: USD <h2 id="heading-scroll7">Stocks to watch</h2> McDonald’s (MCD) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 3. Positive earnings surprise in 9 out of the last 10 reports. Time: Monday, October 30, before the market opens.  Arista Networks (ANET) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 1.58. Positive earnings surprise in 10 out of the last 10 reports. Time: Monday, October 30, after the market closes.  Amgen (AMGN) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 4.67. Positive earnings surprise in 8 out of the last 10 reports. Time: Tuesday, October 31, before the market opens.  Airbnb (ABNB) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 2.12. Positive earnings surprise in 8 out of the last 10 reports. Time: Wednesday, November 1, after the market closes.  PayPal Holdings Inc (PYPL) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 1.23. Positive earnings surprise in 9 out of the last 10 reports. Time: Wednesday, November 1, after the market closes.  Apple (AAPL) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 1.39. Positive earnings surprise in 8 out of the last 10 reports. Time: Thursday, November 2, after the market closes.  Starbucks (SBUX) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 0.9732. Positive earnings surprise in 7 out of the last 10 reports. Time: Thursday, November 2, before the market opens.    Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 27 Oct 2023 12:08:00 +0200We have a busy week ahead with the Federal Reserve and the Bank of England voting on whether to keep interest rates unchanged, which could allow the stock market to regain some strength. Furthermore, China will report on its manufacturing PMI data, poss...Situation in Gaza. What impact could the war in Israel have on oil prices?https://invest.conotoxia.com/investment-research/comments/situation-in-gaza-what-impact-could-the-war-in-israel-have-on-oil-priceshttps://invest.conotoxia.com/investment-research/comments/situation-in-gaza-what-impact-could-the-war-in-israel-have-on-oil-pricesThe escalation of the Middle East conflict may come as a surprise to some observers in the West, especially since the narrative so far has been that the United States is providing security for Israel. However, in order to better understand how the situation might unfold, we need to understand its causes. Therefore, let's take a look at the reasons why Gaza has become so radicalised and what impact this may have on the price quotations of oil, gold and the US S&P 500 index.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Situation in Gaza harder than it looks</a></li> <li><a href="#heading-scroll2">Why are oil prices not rising?</a></li> <li><a href="#heading-scroll3">Will the shock to gold prices continue?</a></li> </ol> <h2 id="heading-scroll1">Situation in Gaza harder than it looks</h2> Long-term isolation and ongoing conflict have led to a significant lag in the economic development of the Gaza Strip compared to the West Bank. According to the International Monetary Fund, in 2022. Gaza's GDP per capita was only a quarter of that of the West Bank, and unemployment and poverty rates were much higher. Both locations had a population of around 5 million people, 2 million of them in Gaza, where 98% of the population adheres to Sunni Islam. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_1_27.10.png" alt="map of Palestine and Israel" /> Source: Kompas Travel The region's isolation from the rest of the world and restrictions on the import of fuel and other goods and the movement of people into and out of Gaza since 2006 have resulted in a significant increase in the unemployment rate, reaching 45%, and drastic poverty affecting 53% of Gaza's population in 2022, compared to 13% and 14% in the West Bank. Unemployment among young people, who make up the majority of Gaza's population, has exceeded 60%, and many of the region's residents must rely on various aid programmes, including medical support, to survive. Nonetheless, despite numerous difficulties, especially in terms of access to electricity, GDP per capita (measured in dollars) in Gaza has remained unchanged over the past 16 years, largely due to government spending. The sectors that grew the most were construction, services and agriculture. The former recorded an average annual growth of 20% throughout the blockade period. Despite the difficult conditions, the Gaza Strip was able to survive mainly due to its developed agriculture. One of the production methods that contributed to this success was hydroponic cultivation without soil, which was nominally inefficient under these conditions. However, it eventually became so efficient that agricultural exports have increased by 13.5% per year since 2015. This, together with import restrictions, allowed Gaza to become a net exporter at the end of the period. However, the energy crisis has influenced the industrial sector to hardly grow for years, due to declining levels of investment. According to United Nations estimates, at least 500,000 people have left the Gaza Strip since 7 October. Most of the refugees are heading to Egypt, but some are also leaving for other countries such as Jordan, Lebanon and Turkey. At the moment, it is difficult to determine how many people have chosen to stay in these regions, which after the massive rocket attacks often resemble the eastern frontline of Ukraine more than places inhabited by people. As a result, it is very difficult to accurately predict the current economic situation in this region, which has almost completely lost access to energy infrastructure and clean water. <h2 id="heading-scroll2">Why are oil prices not rising?</h2> Despite the fact that the conflict is taking place in the Middle East, a region which, according to the OPEC report, is the world's largest producer of crude oil and accounts for 32.7% of global production, we have not seen a significant impact on crude quotations. From the moment the conflict escalated until now, it has only risen by 2%, after a brief shock. However, this information is not entirely accurate. Analysing the members of OPEC, we note that neither Israel nor any of its neighbours are members of this cartel. The most exposed to the conflict seems to be Iran, which openly supports the activities of Hamas on the territory of the Gaza Strip. Nevertheless, as long as there is no significant escalation of the conflict, we do not expect a reaction in the oil market comparable to what we have seen with the outbreak of war in Ukraine. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_XTIUSD_27.10.png" alt="chart oil price" /> Source: Conotoxia MT5, XTIUSD, Daily It should be noted, however, that despite this, the price of this crude may continue to rise. According to the OPEC report, at current production levels, the oil deficit could reach 3.2% in the last quarter of this year and an average of 2.3% for the whole of next year. This is a relatively similar level of shortfall to what we have seen in 2021. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_niedobory_ropy_ENG_27.10.png" alt="graph of oil shortage levels" /> Source: OPEC   <h2 id="heading-scroll3">Will the shock to gold prices continue?</h2> Since the escalation of the Gaza conflict, the price of gold has risen by more than 8%. We are currently approaching the $2,000 support level. These increases coincide with growing uncertainty over the geopolitical situation in Israel. Gold is widely seen as a 'safe haven' for investors. It is interesting to note that the king of metals is virtually the only asset type in this category that responds to growing uncertainty. For example, US bonds or the US dollar itself do not show the same impact. Currently, we are uncertain whether more central banks have started to increase their gold reserves following the outbreak of the Gaza conflict. So far, the biggest buyers of bullion in the first half of 2023 are China, Poland and Singapore. Given the lack of reaction in other assets considered safe havens, the likelihood of a weakening of the upward trend in gold prices is increasing. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_XAUUSD_27.10.png" alt="chart price XAUUSD" /> Source: Conotoxia MT5, XAUUSD, Daily   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 27 Oct 2023 11:44:00 +0200The escalation of the Middle East conflict may come as a surprise to some observers in the West, especially since the narrative so far has been that the United States is providing security for Israel. However, in order to better understand how the situa...Bitcoin ETFs close to realisation: what opportunities does this bring for the cryptocurrency market?https://invest.conotoxia.com/investment-research/comments/bitcoin-etfs-close-to-realisation-what-opportunities-does-this-bring-for-the-cryptocurrency-markethttps://invest.conotoxia.com/investment-research/comments/bitcoin-etfs-close-to-realisation-what-opportunities-does-this-bring-for-the-cryptocurrency-marketThe price of bitcoin has appreciated by more than 26% in just two weeks, surpassing US$35,000. The main factor that has fuelled this rise is the emergence of a bitcoin-related ETF on the Depository Trust & Clearing Corporation website called ISHARES BITCOIN TR SHS , managed by BlackRock. The official approval of this fund by the Securities and Exchange Commission is still pending, but the matter seems only a matter of time. Let's now take a look at why this is important and how it could affect cryptocurrency listings.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Bitcoin ETF what is it?</a></li> <li><a href="#heading-scroll2">What impact will the introduction of an ETF have on the bitcoin exchange rate?</a></li> </ol> <h2 id="heading-scroll1">Bitcoin ETF what is it?</h2> The introduction of an ETF on bitcoin would be the first fund to enable investment in this cryptocurrency on the spot (underlying) market. With such a fund, it would be possible to invest in bitcoin, for example, without setting up a cryptocurrency account or trading on a cryptocurrency exchange. This is critical information, as it would open up the possibility of exposure for many institutions to this market. The current situation at the SEC in the context of a cryptocurrency ETF seems significant in that the first listing of such a fund could be just around the corner, as evidenced by the listing of the Depository Trust & Clearing Corporation (DTCC). When the DTCC adds an ETF to its website, it means that information about that particular fund is publicly available to investors, brokers and other financial institutions. This is part of the registration and clearing process for ETFs. Therefore, hopes are growing for a final decision on this fund. According to Statista, the value of assets in ETFs was as high as $9.5 trillion, and the value of this market is growing at an average annual rate of 22%. The share of the value of ETFs in the global market from the latest Ishares report is around 5%, which may illustrate the potential that lies in this market. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_1_26.10.png" alt="chart the value of the ETF market" /> Source: Statista <h2 id="heading-scroll2">What impact will the introduction of an ETF have on the bitcoin exchange rate?</h2> In <a href="https://invest.conotoxia.com/investment-research/comments/btc-unexpectedly-breaks-through-the-30k-level-does-the-sec-approve-an-etf-on-bitcoin?_ga=2.90349849.208163211.1698224703-1083020427.1665745782&pk_vid=87050761a9e8ca161698240478521ac8">our previous article on bitcoin</a>, we highlighted suspicious purchases of this cryptocurrency. These may be the result of the actions of individuals who had access to information about the status of the launch of the ETF issue. Unfortunately, due to the lack of regulation in the cryptocurrency market, such actions remain possible and happen from time to time with various cryptocurrencies. Nevertheless, we do not yet have a final decision on the ETF, so we must treat this kind of conjecture as speculation. It is worth recalling here the stock market saying "buy the rumours, sell the facts," which states that when the majority of market participants expect an event, such as the introduction of an ETF for bitcoin, there is a tendency to overestimate these expectations. Even if the expected event actually happens, it could lead to a significant price drop. Therefore, it is possible that before the introduction of a bitcoin ETF, the price of bitcoin will rise, and after the introduction of this product we will see investors realise their gains. Nevertheless, the long-term impact of the introduction of an ETF could be positive for the market, as we have seen in the case of, for example, shares or companies that have joined major indices. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_BTCUSD_26.10.png" alt="chart of the BTCUSD exchange rate" /> Source: Conotoxia MT5, BTCUSD, Daily In addition, an artificial intelligence-based tool from Sentistocks, which specialises in studying current emotions in the cryptocurrency market, predicts that the bitcoin exchange rate could continue to rise in the near future. The noticeable increase in the level of optimism may be indicative of the high level of expectation surrounding this event in the market. However, it is worth keeping an eye on how these expectations and emotions will change. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_2_26.10.png" alt="graphic emotions on the BTC market" /> Source: <a href="https://sentistocks.com/predictions/">https://sentistocks.com/predictions/</a>   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comThu, 26 Oct 2023 09:39:00 +0200The price of bitcoin has appreciated by more than 26% in just two weeks, surpassing US$35,000. The main factor that has fuelled this rise is the emergence of a bitcoin-related ETF on the Depository Trust & Clearing Corporation (DTCC) website called ISHA...How do you invest in bonds when yields are at their highest since 2007?https://invest.conotoxia.com/investment-research/comments/how-do-you-invest-in-bonds-when-yields-are-at-their-highest-since-2007https://invest.conotoxia.com/investment-research/comments/how-do-you-invest-in-bonds-when-yields-are-at-their-highest-since-2007Yields on 10-year US Treasury bonds have risen to 5%, thus reaching their highest level since 2007, when financial markets were on the eve of the financial crisis. This phenomenon seems to be the result of rising expectations of future interest rates, on which bonds are largely dependent. The great American investor Warren Buffett once aptly compared interest rates to gravity prevailing in the markets, which we are now seeing in the form of falling bond values and rising bond yields. So let's consider what the opportunities are for investing in bonds and the potential opportunities this market may currently present.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">What are bonds?</a></li> <li><a href="#heading-scroll2">Why are bonds falling?</a></li> <li><a href="#heading-scroll3">When do bonds go up?</a></li> <li><a href="#heading-scroll4">Which bonds are the most profitable?</a></li> </ol> <h2 id="heading-scroll1">What are bonds?</h2> Bonds are securities issued by governments, corporations or other institutions that need capital to finance their activities. Bonds are an alternative to borrowing from a bank, where the issuer (the person or institution that issues the bonds) undertakes to pay a certain amount (the nominal capital) on a certain date, and to pay interest (the interest rate) on the nominal capital of the bond at regular periods until the bond matures. If we look at the value of this market, we see that it even outperforms the stock market. According to data from Statista, the total value of the global equity market was $98.5 trillion compared to the $133 trillion value of the bond market. The bond yield, an indicator that expresses the current state of the market, tells us how much we can expect to receive annually from a given investment. It is a natural inverse representation of bond prices, which pay fixed coupons. Therefore, if we see a rise in bond yields, this simultaneously means a fall in their prices. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_rentowno%C5%9B%C4%87_10_25.10.png" alt="10-year bond yield chart" width="1977" height="675" /> Source: Fred <h2 id="heading-scroll2">Why are bonds falling?</h2> There are two main types of risk associated with bond investments. The first is credit risk, which is inherent in all debt and associated with the potential insolvency of the issuer. The second is the risk associated with fluctuations in interest rates, which affect the terms of issuance of new government bonds. Therefore, declines in the value of bonds can be the result of increased risk of insolvency of the issuer (sovereign, or company) or expectations of reductions in future interest rates. If we look at the latter type of risk, we see that in the current derivatives market, the probability of another interest rate hike (from the FedWatch tool) by the Federal Reserve (Fed) is very low. As global markets deteriorate, where we are already seeing a recession in many places, we can expect interest rate cuts to occur next year. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/grafika_2_25.10.png" alt="interest rate probability table" width="1434" height="675" /> Source: FedWatch To mitigate the risk of issuer default, instead of focusing on analysing the financial situation of individual companies or countries, one can consider investing in ETFs that invest in diversified portfolios of bonds from different issuers. In the event that one of the issuers is unable to repay its bonds, such a situation will not significantly affect our investment, as the portfolio is diversified and independent of individual issuers. We will look at the most interesting of these below. <h2 id="heading-scroll3">When do bonds go up?</h2> The most important factor influencing the magnitude of changes in bond prices is their so-called duration, or time to maturity. Accordingly, short-term bonds with a duration to maturity of one to five years usually have smaller price fluctuations than long-term bonds (over 10 years). A longer investment period carries greater risk, for example in the form of adverse changes in the issuer's circumstances. Under normal circumstances, we would expect long-term bonds to yield higher returns in return for a longer investment period. However, we are currently seeing the opposite situation. The yield difference between 10-year and 2-year bonds is negative, which means that short-term bonds offer higher returns than long-term bonds. This phenomenon is significant because, in the past, such a negative difference heralded a recession (shown in gray in the chart). Currently, this differential has fallen from -1 per cent to -0.19 per cent. When it starts to rise and becomes positive, this usually means that long-term bond yields (over 10 years) are rising. There is a likelihood, therefore, that such an increase could already begin in the coming months. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_2-10_25.10.png" alt="bond spread chart" width="1977" height="675" /> Source: Fred <h2 id="heading-scroll4">Which bonds are the most profitable?</h2> Duration, or the actual time to maturity of a bond, is a key indicator affecting the magnitude of bond price movements in response to changes in interest rates. In other words, if interest rates fall by 2 percentage points, a bond with a Duration of 10 will increase in price by around 20 per cent. An example of an ETF with one of the longer Durations is the iShares 20+ Year Treasury Bond ETF (TLT). The Duration of the bond in this fund is 16.1. This has caused the value of this fund to fall by as much as 53 per cent from its peak, when interest rates approached zero. If this trend reverses, we can expect it to become one of the funds likely to gain the most in value. If interest rates remain unchanged, we can expect that the average annual return on this fund could be around 5.21 per cent. Here is a list of interesting bond investment funds: <ul> <li aria-level="1"> <h3>iShares 20+ Year Treasury Bond ETF (TLT)</h3> </li> </ul> ETF on: long-term US Treasury bonds Duration: 16.1 Yield (YTM): 5,21% <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_TLT_25.10.png" alt="TLT ETF chart" /> Source: Conotoxia MT5, TLT, Daily <ul> <li aria-level="1"> <h3>iShares iBoxx $ High Yield Corporate Bond ETF (HYG)</h3> </li> </ul> ETF on: high-yield US corporate bonds with an investment grade rating of BBB. Duration: 3.71 Yield (YTM): 9,41% <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_HYG_dzienny_25.10.png" alt="HYG ETF chart" /> Source: Conotoxia MT5, HYG, Daily <ul> <li aria-level="1"> <h3>iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD)</h3> </li> </ul> ETF on: over 1,000 US investment grade corporate bonds. Duration: 7.88 Yield (YTM): 6,4% <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_LQD_25.10.png" alt="LQD ETF chart" /> Source: Conotoxia MT5, LQD, Daily <ul> <li aria-level="1"> <h3>iShares 7-10 Year Treasury Bond ETF (IEF)</h3> </li> </ul> ETFs on: US medium-term treasury bonds Duration: 7.3 Yield (YTM): 4,92% <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_IEF_25.10.png" alt="IEF ETF chart" /> Source: Conotoxia MT5, IEF, Daily <ul> <li aria-level="1"> <h3>iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB)</h3> </li> </ul> ETF on: diversified government bonds of developing countries such as China, Brazil and Poland Duration: 6.6 Yield (YTM): 8,4% <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_EMB_25.10.png" alt="EMB ETF chart" /> Source: Conotoxia MT5, EMB, Daily   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comWed, 25 Oct 2023 10:36:00 +0200Yields on 10-year US Treasury bonds have risen to 5%, thus reaching their highest level since 2007, when financial markets were on the eve of the financial crisis. This phenomenon seems to be the result of rising expectations of future interest rates, o...Next week to watch (23 – 27.10.)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-23-27-10https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-23-27-10Next Thursday, the ECB Executive Board members and the governors of the Eurozone central banks will decide whether to raise interest rates or leave them unchanged in the penultimate meeting of this year. On the other side of the Atlantic Ocean, the first estimates of the US Q3 GDP growth numbers will be released the same day. Meanwhile, a number of high-profile companies will continue to release their Q3 earnings reports throughout the week.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">US New Home Sales (September)</a></li> <li><a href="#heading-scroll2">Eurozone Interest Rate Decision</a></li> <li><a href="#heading-scroll3">US Gross Domestic Product (GDP) QoQ (Q3)</a></li> <li><a href="#heading-scroll4">Stocks to watch</a></li> </ol> <h2 id="heading-scroll1">Wednesday 25.10. 14:00 GMT, US New Home Sales (September)</h2> New Home Sales is an economic indicator published by the US Census Bureau that measures the number of new home sales, taking into account any deposits paid or contracts signed on single-family homes built in the current or previous year. A high number would indicate that the housing activity may be high, leading to strong economic growth. Although a lagging indicator, new home sales are closely watched by investors as they represent consumer demand driven by factors like interest rates, unemployment, and household income. New Home Sales are reported in absolute terms and as a percentage change from the previous month. In addition, new home sales are usually released before Existing Home Sales, as the two data are closely correlated. In the US, sales of new single-family homes fell sharply in August 2023, dropping 8.7% to a seasonally adjusted annual rate of 675,000 units. This result fell short of market expectations, missing the 700,000 sales expected and marking the sharpest decline in 11 months. It effectively wiped out the previously reported 8% rise in the previous month. This sharp decline could be attributed to the notable rise in mortgage rates, suggesting that the Federal Reserve's aggressive tightening measures are having a more pronounced impact in the third quarter of the year. The median price of newly sold homes was 430,300 USD, while the average sales price was 514,000 USD. These figures were lower than the prices recorded a year ago, which were 440,300 USD and 530,800 USD, respectively. At the end of August, there were 436,000 houses still available for sale, equivalent to a supply of 7.8 months at the current sales rate.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/Sprzeda%C5%BC_nowych_dom%C3%B3w_20.10.png" alt="Graph of new home sales in the USA" width="1463" height="675" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bullish effect on the USD, while a lower-than-expected reading could be bearish for the USD. Impact: USD <h2 id="heading-scroll2">Thursday, 26.10. 12:15 GMT, Eurozone Interest Rate Decision</h2> The members of the ECB Executive Board, together with the governors of the Eurozone central banks, vote on whether to raise, decrease, or leave interest rates unchanged. These decisions affect the currency's value, and interest rate policy is among the key instruments to regulate inflation. Investors closely follow central banks' decisions and changes in the level of interest rates, as this information can be crucial to their trading strategies. The currency's value tends to rise when interest rates are high, as they attract investors seeking higher returns on their deposits. Conversely, when interest rates are low, the currency's value tends to fall as investors look for other places to invest their money. At their latest meeting on 14 September, the voting members of the ECB's Executive Board and the Governors were divided over whether to raise interest rates or maintain the status quo in their ongoing tightening cycle. The decision was described as a finely balanced one, influenced by tactical considerations. Officials were concerned about the potential consequences of pausing for the first time in more than a year, such as the perception of a weakening commitment on the part of the ECB. This, in turn, could lead to speculation that the tightening cycle was coming to an end, thereby increasing the risk of a resurgence in inflation. Nevertheless, some members advocated for keeping interest rates unchanged. Their perspective was rooted in the belief that the economy had experienced a significant downturn, and they anticipated that inflation would eventually return to around 2% by the end of the projection period. The minutes also underscored the upward adjustments made to the headline inflation forecasts for 2023 and 2024. Notably, these projections were contingent on market interest rates, implying the potential for another interest rate hike by year-end – in this or the last meeting of the year in December.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/stopy_strefa_EU_20.10.png" alt="chart of interest rates in the euro area" width="1490" height="676" /> Source: Tradingeconomics.com A higher-than-expected rate may be positive for the EUR and negative for the stock market, while a lower-than-expected rate may be negative for the EUR and positive for the stock market. Impact: EUR, STOXX, DAX <h2 id="heading-scroll3">Thursday, 26.10. 12:30 GMT, US Gross Domestic Product (GDP) QoQ (Q3)</h2> Gross domestic product (GDP) indicates the total value of goods and services produced in a country for a certain period. GDP is an important indicator of the health of an economy because it gives an overall picture of how well or poorly it is doing. If the GDP growth is higher than expected, the economy is in good shape and growing faster than expected. On the other hand, if the GDP growth is lower than expected, the economy performs weaker than anticipated. In the second quarter of 2023, the US economy displayed annualized growth of 2.1%, which remained consistent with the earlier estimate. This performance was compared to the revised upward growth of 2.2% observed in the first quarter. Notably, consumer spending showed a less substantial increase than initially anticipated, with a growth of 0.8% compared to the previous estimate of 1.7%. However, there were positive revisions in other areas, including non-residential fixed investment (7.4% vs 6.1%), exports (-9.3% vs -10.6%), and residential investment (-2.2% vs -3.6%). Government spending increased by 3.3%, aligning with the previous estimate. Furthermore, the Bureau of Economic Analysis conducted annual revisions aimed at eliminating fluctuations stemming from factors such as seasonal weather patterns and holidays. Regarding the overall economic performance for 2022, growth was adjusted downward by 0.2 percentage points to 1.9%. This revision was driven by reductions in consumer spending, inventory investment, state and local government spending, and exports, along with an increase in imports. Looking ahead to 2023, the Federal Reserve anticipates the economy to grow by 2.1%. Meanwhile, there are some surprising forecasts available for the US third-quarter economic growth, including a 4.7% growth by the Trading Economics Forecast and a 5.8% growth forecasted by the Atlanta Fed economists.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/PKB_USA_20.10.png" alt="chart of GDP in the USA" width="1495" height="675" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bullish effect on the USD, while a lower-than-expected reading could be bearish for the USD. Impact: USD <h2 id="heading-scroll4">Stocks to watch</h2> Microsoft (MSFT) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 2.65. Positive earnings surprise in 9 out of the last 10 reports. Time: Tuesday, October 24, after the market closes.  Alphabet C (<a href="https://www.investing.com/equities/google-inc-c-earnings">GOOG</a>) & Alphabet A (GOOGL) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 1.44. Positive earnings surprise in 6 out of the last 10 reports. Time: Tuesday, October 24.  Visa A (V) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 2.25. Positive earnings surprise in 10 out of the last 10 reports. Time: Tuesday, October 24, after the market closes.  Coca-Cola (KO) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 0.6948. Positive earnings surprise in 9 out of the last 10 reports. Time: Tuesday, October 24, before the market opens.  General Electric (GE) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 0.5594. Positive earnings surprise in 9 out of the last 10 reports. Time: Tuesday, October 24, before the market opens.  Meta Platforms (META) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 3.59. Positive earnings surprise in 5 out of the last 10 reports. Time: Wednesday, October 25, after the market closes.  IBM (IBM) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 2.14. Positive earnings surprise in 9 out of the last 10 reports. Time: Wednesday, October 25, after the market closes.  Amazon.com (AMZN) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 0.5757. Positive earnings surprise in 6 out of the last 10 reports. Time: Thursday, October 26, after the market closes.  Intel (INTC) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 0.2151. Positive earnings surprise in 8 out of the last 10 reports. Time: Thursday, October 26, after the market closes.  Exxon Mobil (XOM) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 2.35. Positive earnings surprise in 8 out of the last 10 reports. Time: Friday, October 27, before the market opens.  Chevron (CVX) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 3.42. Positive earnings surprise in 7 out of the last 10 reports. Time: Friday, October 27.    Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 20 Oct 2023 12:05:00 +0200Next Thursday, the ECB Executive Board members and the governors of the Eurozone central banks will decide whether to raise interest rates or leave them unchanged in the penultimate meeting of this year. On the other side of the Atlantic Ocean, the firs...The war in Israel and its impact on global marketshttps://invest.conotoxia.com/investment-research/comments/the-war-in-israel-and-its-impact-on-global-marketshttps://invest.conotoxia.com/investment-research/comments/the-war-in-israel-and-its-impact-on-global-marketsSince the massive Hamas rocket attack on Israel on 7 October, Tel Aviv's main index has fallen by 7.8%. Over the same period, the US S&P 500 index has risen by 2.7%. Let's analyse the impact of the conflict on the various national indices, and consider which markets have seen the biggest gains since the beginning of the year, and which appear most promising.<h3>Table of contents:</h3> <ol> <li><a href="#heading-scroll1">Israeli stocks at important support</a></li> <li><a href="#heading-scroll2">Investors enjoyed Brazilian coffee this year</a></li> </ol> <h2 id="heading-scroll1">Israeli stocks at important support</h2> It has long been known that the Israeli economy is based on new technologies and start-ups, which largely raise capital in the country's stock market. Therefore, the area of new technologies is crucial for this economy. For this reason, one can see the Ark Israel Innovative Technology ETF (IZRL) approaching key support at 16.5, a breakout of which could start a continuation of the downtrend. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_IZRL_18.10.png" alt="Israel stock exchange chart" /> Source: Conotoxia MT5, IZRL, Daily Another important topic is the impact of armed conflicts on the stock market, which has been the subject of much research. In particular, it is worth noting the location of the ongoing conflict. When the conflict takes place in a country, this usually has a negative impact on the quotations of the national index. However, when a country's economy is far away from the conflict area, either markets are not historically affected, or, according to a study by LPL Research, after the initial shock, the S&P 500 (US500) index quotations typically rise by an average of 6.3% over the following six months. It is worth noting that in 60% of the 38 conflicts studied since 1940, such an event signalled the start of a new wave of index rises. Will this time be different? It seems not, especially as we are already seeing a rebound in the US. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/tabela_wojny_SPX_18.10.png" alt="SPX change table after the outbreak of wars" width="1200" height="1089" /> Source: LPL Research <h2 id="heading-scroll2">Investors enjoyed Brazilian coffee this year</h2> The biggest gains among the major economies were seen in the Brazilian equity market. The Ishares Msci Brazil ETF (EWZ) has gained 5.3% since the start of the armed conflict in Gaza, rising 18.3% since the beginning of the year. However, this has not been enough to return the Brazilian stock market to pre-pandemic crisis levels. The current rise seems to be fuelled by increases in commodity prices, which account for more than 60% of the country's exports. The shock to the oil market (31% of Brazil's exports) caused by the Gaza conflict has raised expectations for future energy commodity prices. This explains the current rally in the Brazilian stock market, suggesting that the market has great potential. Nonetheless, it remains as much as 36% below pre-pandemic levels, even though the value of exports has increased by as much as 56% in that time. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_EWZ_dzienny_18.10.png" alt="Brazilian stock market chart" /> Source: Conotoxia MT5, EWZ, Weekly In second place among developed economies is the main US index, the S&P 500, which has seen an impressive 14.4% rise in its stock price since the beginning of the year and has gained 2.7% since the escalation of the conflict in Israel, and is now just 10% away from reaching new historic highs. One potential threat to the US stock market that could be triggered by the conflict between Israel and Palestine is the price of oil. On several occasions in history, increases in the price of this commodity have already led to a recession in the United States. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_US500_18.10.png" alt="SPX index chart" /> Source: Conotoxia MT5, US500, Daily Last on the podium is Taipei, on the other side of the ocean. The Thai stock market is up 12.1% year-to-date and 1% since the outbreak of the conflict. Taiwan's economy is based on advanced technology manufacturing, with a particular focus on the production of semiconductors, which are used in almost every electronic device. Taiwan's TSMC, backed by the country's government, dominates the semiconductor market, accounting for almost 60% of global production. It is also the largest company in Asia by capitalisation. Therefore, movements on the Taiwanese stock market are strongly linked to the performance of this sector, which has experienced a significant decline in orders until May this year. This sector is considered particularly sensitive to volatile economic conditions. The current rise in share prices in this market seems to be the result of an increased number of orders that are back on track with the long-term trend. Therefore, the listing of the Ishares Msci Taiwan ETF (EWT), although still 33% below its historical highs, appears to have great potential. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_zam%C3%B3wienia_mikroprocesor%C3%B3w_18.10.png" alt="Semiconductor procurement chart" width="1408" height="675" /> Source: MacroMicro <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_EWT_18.10.png" alt="Taiwan stock exchange chart" /> Source: Conotoxia MT5, EWT, Weekly   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comWed, 18 Oct 2023 14:17:00 +0200Since the massive Hamas rocket attack on Israel on 7 October, Tel Aviv's main index has fallen by 7.8%. Over the same period, the US S&P 500 index has risen by 2.7%. Let's analyse the impact of the conflict on the various national indices, and consider ...BTC unexpectedly breaks through the $30k level. Does the SEC approve an ETF on bitcoin?https://invest.conotoxia.com/investment-research/comments/btc-unexpectedly-breaks-through-the-30k-level-does-the-sec-approve-an-etf-on-bitcoinhttps://invest.conotoxia.com/investment-research/comments/btc-unexpectedly-breaks-through-the-30k-level-does-the-sec-approve-an-etf-on-bitcoinFor a moment, bitcoin surpassed the US$30,000 level, recording a 10% increase in a single day, only to fall back to the vicinity of US$28,000. We have seen this kind of volatility in the cryptocurrency market over the past months, suggesting that the biggest players of the so-called whales may be regularly buying this digital currency. This could be a result of preparing for the upcoming halving or waiting for the launch of the first ETF on BTC. What conclusions can we draw from the current market situation?<h3>Analysis of BTC purchases</h3> If we look at the price movements of bitcoin, we notice characteristic price increases, which often go hand in hand with a marked increase in trading volume. These are immediately followed by declines. This phenomenon occurs when large volumes of bitcoin are placed on the market in a low liquidity situation. This may suggest that someone is regularly acquiring significant amounts of this cryptocurrency. It is possible that this is related to the expectation of the launch of the first bitcoin ETF, which could trigger capital inflows from a number of new sources. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_BTCUSD_H4_17.10.png" alt="BTC daily chart" /> Source: BTCUSD, H4 <h3>Halving bitcoin as early as six months from now</h3> Block halving involves a systematic reduction in the rate of production of new cryptocurrencies. In particular, this involves periodic events in which the rewards given to so-called miners for solving blocks are reduced. Halving plays a key role in the economic framework of cryptocurrencies, as it guarantees consistent coin issuance, according to a predictable decreasing rate. This controlled approach to monetary inflation is the fundamental difference between cryptocurrencies and conventional fiat currencies, which essentially have an unlimited supply. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/bitcoin_halving_17.10.png" alt="Halving Bitcoin's clock" width="1438" height="675" /> Source: Nicehash Why is this so important for the cryptocurrency market as a whole? Because historically, each halving has initiated another long-term cycle of cryptocurrency appreciation by drastically halving the supply of newly mined coins. Bitcoin alone accounts for 51% of the capitalisation of the entire cryptocurrency market. Will we see a cryptocurrency rally this time too? <h3>BTC ETF what about it?</h3> The reported firing of the cryptocurrency began after news was published on the X platform that the US Securities and Exchange Commission (SEC) had approved BlackRock's iShares spot bitcoin exchange-traded fund, or ETF. However, it quickly became apparent that this was just fake news, resulting in a return to previous levels.  What is the situation at the SEC regarding the cryptocurrency ETF? Efforts to introduce a US ETF investing directly in bitcoin took another step when the regulator decided not to appeal a court ruling that recognised its earlier refusal to allow the $16.7 billion Grayscale Bitcoin Trust (GBTC) to be converted into an ETF. The decision appears to have increased the chances of such an ETF being approved, hence investor expectations may arise. Other firms, including BlackRock, Fidelity, Ark Invest and many others, have also applied for a spot Bitcoin ETF, and approval processes appear to be ongoing. The SEC's final decision could pave the way for the introduction of new ETFs investing in BTC. It seems that this could be the factor that starts a new bull market for the entire cryptocurrency market. When will this happen? While it is difficult to pinpoint a specific date, it is safe to say that it will happen... sooner rather than later.   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comTue, 17 Oct 2023 12:28:00 +0200For a moment, bitcoin surpassed the US$30,000 level, recording a 10% increase in a single day, only to fall back to the vicinity of US$28,000. We have seen this kind of volatility in the cryptocurrency market over the past months, suggesting that the bi...Next week to watch (16 – 20.10.)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-16-20-10https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-16-20-10Next week, as the third-quarter corporate earnings release season is in full sail, many noteworthy companies report their earnings to the public, only a part of which are mentioned in the article below. In addition, Wednesday will be a busy day as we follow the latest developments in the Chinese economy and get the latest inflation readings from the UK and the eurozone.<h3>Table of Contents:</h3> <ol> <li><a href="#heading-scroll1">UK Unemployment Rate (August)</a></li> <li><a href="#heading-scroll2">China Gross Domestic Product (GDP) YoY (Q3)</a></li> <li><a href="#heading-scroll3">UK Consumer Price Index (CPI) YoY (September)</a></li> <li><a href="#heading-scroll4">Eurozone Consumer Price Index (CPI) YoY (September)</a></li> <li><a href="#heading-scroll5">Stocks to watch</a></li> </ol> <h2 id="heading-scroll1">Tuesday 17.10. 06:00 GMT, UK Unemployment Rate (August)</h2> The unemployment rate is the percentage of people without a job actively seeking employment in the previous month relative to the total number of people of working age or in the labour market. A high unemployment rate means that a large number of people are out of work despite actively seeking employment. A low unemployment rate indicates a stable labour market and greater availability of jobs.  Unemployment rates are important for economic analysis and can affect social and economic aspects. A high unemployment rate is associated with lower incomes and increased poverty, while a low unemployment rate promotes increased wages and social welfare. Governments and policymakers monitor the unemployment rate to assess the effectiveness of employment policies and take action to create jobs and support the unemployed. However, it should be remembered that the unemployment rate is one of many tools for assessing the labour market. Analysing other indicators, such as the labour force participation rate or wages, is also important. From May to July 2023, the United Kingdom experienced a notable increase in its unemployment rate, reaching 4.3%. This rate was the highest recorded since the third quarter of 2021, suggesting a potential slowdown in the labour market. This shift followed several months of unprecedented monetary tightening by the Bank of England. The number of people out of work rose by 159,000 to a total of 1.46 million. This increase was mainly due to people who had been unemployed for up to 12 months. During the same period, employment levels saw a substantial decline, with a decrease of 207 thousand people, bringing the total to 32.88 million. This drop was the most significant since the three months leading up to October 2020 and exceeded expectations, which had anticipated a decrease of 185 thousand. A reduction in the number of full-time self-employed workers primarily drove the decline. Regarding wages, when excluding bonuses, there was a noteworthy increase of 7.8% compared to the previous year for the three months leading to July. This marked the most substantial wage growth since comparable records began in 2001. Furthermore, the overall growth in total pay reached 8.5%, surpassing the expected 8.2%. This, in part, may be due to the high inflation boosting the wage growth accordingly.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_UK_unemployment_13.10.png" alt="Graph of unemployment in the UK" width="1481" height="675" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bearish effect on the GBP, while a lower-than-expected reading could be bullish for the GBP. Impact: GBP <h2 id="heading-scroll2">Wednesday 18.10. 02:00 GMT, China Gross Domestic Product (GDP) YoY (Q3)</h2> Gross domestic product (GDP) indicates the total value of goods and services produced in a country for a certain period. GDP is an important indicator of the health of an economy because it gives an overall picture of how well or poorly it is doing. If the GDP growth is higher than expected, the economy is in good shape and growing faster than expected. On the other hand, if the GDP growth is lower than expected, the economy performs weaker than anticipated. In the second quarter, the Chinese economy expanded by 6.3% year-on-year. This was faster than the 4.5% recorded in the first quarter, but fell short of market expectations of 7.3% growth. It's important to note that the latest figures were affected by a low base of comparison from last year, when Shanghai and other major cities were under strict lockdown. In the first half of the year, the Chinese economy grew by 5.5%. China had set a GDP growth target of around 5% for the year, following a 3% expansion in 2022. Beijing has been cautious about implementing significant stimulus measures, particularly in light of rising local government debt. Economic indicators in June showed a mixed picture, with retail sales rising at a slower pace while industrial output growth accelerated. The urban jobless rate remained stable at 5.2%, but youth unemployment reached a new high of 21.3%. Previously released data indicated that China's exports experienced their most significant decline in three years. This decline was attributed to high inflation in key markets and geopolitical factors affecting foreign demand. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_Chin_13.10.png" alt="China's GDP graph" width="1438" height="675" /> Source: Tradingeconomics.com 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. Impact: CNY <h2 id="heading-scroll3">Wednesday 18.10. 06:00 GMT, UK Consumer Price Index (CPI) YoY (September) </h2> The CPI index measures changes in the prices of consumer goods and services. It covers different types of products, such as food, fuel, transportation services, cosmetics, household goods, clothing, and many others. The purpose of the CPI index is to measure the increase or decrease in the cost of living for consumers. As the CPI index rises, consumers' purchasing costs increase, affecting their money's purchasing power. The CPI index is used to monitor inflation or the overall rise in prices in the economy. It allows us to assess whether prices are rising too fast or too slowly and to determine what economic policy measures should be taken to offset the adverse effects of inflation. In August 2023, consumer price inflation in the United Kingdom showed a slight decrease, falling to 6.7% from the previous month's 6.8%. This figure came in below the market's anticipated rate of 7.0%, marking the lowest rate since February 2022. The reduction could be attributed primarily to a deceleration in food price inflation and a decrease in the cost of accommodation services. Moreover, the core inflation rate, which excludes volatile items such as energy and food, dipped to 6.2%, the lowest level since March, significantly lower than the expected rate of 6.8%. Various categories experienced softer price increases: food and non-alcoholic beverages (13.6% compared to 14.8% in July); furniture, household equipment, and maintenance (5.1% compared to 6.2%); recreation and culture (5.8% compared to 6.5%); restaurants and hotels (8.3% compared to 9.6%); and miscellaneous goods and services (5.6% compared to 6.0%). Meanwhile, transport prices saw a milder decline of 0.5%, in contrast to the 2.0% drop observed in July. It was due to a monthly rise in motor fuel costs, driven by the increasing global oil prices. On a monthly basis, the Consumer Price Index (CPI) increased by 0.3% in August. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_CPI_UK_13.10.png" alt="Chart of CPI inflation in the UK" width="1495" height="675" /> Source: Tradingeconomics.com If the reading is higher than expected, inflation is higher, possibly favouring a fall in the GBP. Meanwhile, it is also a stimulus for the BoE to raise interest rates and reduce the money supply, causing an increase in the GBP. If the reading is lower than expected, it may give the BoE an argument to stop its policy of raising interest rates. Impact: GBP, FTSE 100 and other indices <h2 id="heading-scroll4">Wednesday 18.10. 09:00 GMT, Eurozone Consumer Price Index (CPI) YoY (September)</h2> In September 2023, the inflation rate in the eurozone declined to 4.3% year-on-year, marking its lowest level since October 2021 and falling below the market consensus of 4.5%, according to a preliminary estimate. Prices showed a slower increase in several categories: services (4.7% compared to 5.5% in August), non-energy industrial goods (4.2% compared to 4.7%), and food, alcohol, and tobacco (8.8% compared to 9.7%). Simultaneously, the deflation in energy costs deepened, with a rate of -4.7% compared to -3.3%. The core inflation rate, a critical underlying measure that excludes volatile food and energy prices, also cooled to 4.5% in September, reaching its lowest point since August 2022. Among the largest economies within the eurozone, HICP rates decreased in Germany (4.3% compared to 6.4%), France (5.6% compared to 5.7%), and the Netherlands (-0.3% compared to 3.4%). However, in Italy and Spain, inflation rates accelerated to 5.7% and 3.2% from 5.5% and 2.4%, respectively. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inflacja_strefa_euro_13.10.png" alt="Graph of CPI inflation in the euro area" width="1494" height="675" /> Source: Tradingeconomics.com If the reading is higher than expected, inflation is higher, possibly favouring a fall in the EUR. Meanwhile, it is also a stimulus for the ECB to raise interest rates and reduce the money supply, causing an increase in the EUR. If the reading is lower than expected, it may give the ECB an argument to stop its policy of raising interest rates. Impact: EUR, DAX, STOXX and other indices <h2 id="heading-scroll5">Stocks to watch</h2> J&J (JNJ) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 2.52. Positive earnings surprise in 10 out of the last 10 reports. Time: Tuesday, October 17, before the market opens.  Tesla (TSLA) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 0.7511. Positive earnings surprise in 4 out of the last 10 reports. Time: Wednesday, October 18, after the market closes.  Netflix (NFLX) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 3.51. Positive earnings surprise in 8 out of the last 10 reports. Time: Wednesday, October 18, after the market closes.  Philip Morris (PM) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 1.61. Positive earnings surprise in 9 out of the last 10 reports. Time: Thursday, October 19, before the market opens.  AT&T (T) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 0.6221. Positive earnings surprise in 9 out of the last 10 reports. Time: Thursday, October 19, before the market opens.  American Express (AXP) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 2.95. Positive earnings surprise in 8 out of the last 10 reports. Time: Friday, October 20, before the market opens.    Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 13 Oct 2023 11:02:00 +0200Next week, as the third-quarter corporate earnings release season is in full sail, many noteworthy companies report their earnings to the public, only a part of which are mentioned in the article below. In addition, Wednesday will be a busy day as we fo...How might Poland's parliamentary election results affect USD/PLN and WIG20?https://invest.conotoxia.com/investment-research/comments/how-might-poland-s-parliamentary-election-results-affect-usd-pln-and-wig20https://invest.conotoxia.com/investment-research/comments/how-might-poland-s-parliamentary-election-results-affect-usd-pln-and-wig20According to the latest pre-election polls, it is possible that there might not be eight-year-long United Right government in Poland after the parliamentary elections scheduled for Sunday, 15 October. Along with the prospects of the opposition taking power, there is talk of unblocking funds from the European National Recovery Plan, which could be crucial to the future of the Polish economy. The differences in the polls are insignificant, hence the possible outcome belongs to the realm of speculation. However, let us consider what impact the election results may have on the USD/PLN exchange rate and the WIG20?<h3>Table of Contents:</h3> <ol> <li><a href="#heading-scroll1">Growing influence of foreign investors on USD/PLN and WIG20 exchange rates</a></li> <li><a href="#heading-scroll2">How does the election affect the WIG20 index and the USD/PLN exchange rate?</a></li> <li><a href="#heading-scroll3">A PiS win could push the USD/PLN exchange rate above 5 PLN?</a></li> <li><a href="#heading-scroll4">Will the Civic Coalition's win bring in KPO funding?</a></li> <li><a href="#heading-scroll5">What will happen to the USD/PLN and WIG20 exchange rates when government self-reliance is not achieved?</a></li> </ol> <h2 id="heading-scroll1">Growing influence of foreign investors on USD/PLN and WIG20 exchange rates</h2> This week's trend on the Polish trading floor is strongly consistent with increases on US indices and a decline in the USD/PLN exchange rate. The latest data from the WSE show an increase in the share of foreign investors in the turnover of the Polish stock exchange in the first half of the year. The 65 per cent share is one of the highest in four years, which seems to tell us that Poland is becoming a market of choice for foreign investors. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/WIG20_i_SPX_13.10.png" alt="Wykres WIG20 i SPX" /> Source: Tradingview <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/Wykres_udzia%C5%82_inwestor%C3%B3w_zagranicznych_13.10.jpg" alt="Wykres Udział inwestorów Zagranicznych na GPW" width="1445" height="675" />Source: WSE, from left: domestic institutional investors, domestic individual investors, foreign investors <h2 id="heading-scroll2">How does the election affect the WIG20 index and the USD/PLN exchange rate?</h2> The upcoming elections also appear to be leaving their mark on the stock market. Companies owned by the State Treasury, which account for a significant share of the WIG20 index, appear to be particularly exposed to this risk. In the event of a change of government, board reshuffles and strategy reversals seem possible, which would entail temporary uncertainty.  It is difficult to identify a clear winner from the most recent polls, hence it is difficult for investors to predict what directions government policy will take in the coming years. Here, it is worth mentioning the study 'Impact of Political Elections on Share Prices on the Warsaw Stock Exchange' by Marek Szymański and Grzegorz Wojtalik, which showed that a historical relationship only exists between the presidential election and the short-term performance of the WIG20 index. It highlights negatively on equities in the five-day period after the vote. In the case of the parliamentary elections we have now, there was a noticeable strengthening of the zloty against the dollar (a fall in the USD/PLN exchange rate) in the ten days following the election. This would mean that we could expect a fall in the USD/PLN exchange rate. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/Wykres_USDPLN_dzienny_13.10.png" alt="Wykres USDPLN" /> Source: Conotoxia MT5, USDPLN, Daily <h2 id="heading-scroll3">A PiS win could push the USD/PLN exchange rate above 5 PLN?</h2> We are currently considering three main scenarios. The first one assumes a victory for PiS by winning a majority of seats in parliament, which would enable the continuation of current policies. In such a case, the current high rate of economic growth will possibly continue, supported mainly by the weakening of the Polish currency, the loosening of fiscal policy (resulting in an increase in debt) and the strengthening of political relations with the United States. Therefore, there is a high probability that the USD/PLN exchange rate would exceed the 5.00 level during the PiS government. In the longer term, tighter relations with the United States may benefit capital inflows to the WIG20 index. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/sonda%C5%BC_wyborczy_13.10.png" alt="Sondaż wyborczy w Polsce 2023" width="1202" height="675" /> Source: Ipsos poll for OKO.press and TOK FM <h2 id="heading-scroll4">Will the Civic Coalition's win bring in KPO funding?</h2> In the event that the opposition, whose largest party is the Civic Coalition (KO) led by Donald Tusk, succeeds in forming a government, we may see an increase in market expectations for the unblocking of funds from the EU's National Recovery Plan. This could be a factor favouring the strengthening of the Polish currency. Some voices in the opposition also point to the possibility of accelerating the process of Poland's accession to the euro area, although this still remains a distant prospect given the current economic conditions. However, it is worth noting that foreign policy could possibly shift more towards Germany, strengthening trade ties, among other things, especially as Germany is currently Poland's main trading partner, accounting for as much as 28 per cent of total national exports. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_eksport_polski_na_kraje_13.10.png" alt="Eksport Polski ze względu na kraje" width="1434" height="676" /> Source: Tradingeconomics <h2 id="heading-scroll5">What will happen to the USD/PLN and WIG20 exchange rates when government self-reliance is not achieved?</h2> The worst-case scenario for long-term growth projections would be instability in government. While the impact of government policy on growth rates, which they seem likely to remain high for the coming years, should instability in government not be overestimated, it is nevertheless difficult to predict potential changes in the event of instability in government, as there are many possible scenarios and solutions, especially regarding foreign policy. The outcome of the elections in the long term may not be of key importance for stock market investors. There may, of course, be isolated differences in the use of state-owned companies to, for example, lower product prices compared to the competition, but isolated instances would not significantly affect foreign investors' seemingly increasing interest in the Polish market from year to year. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/Wykres_WIG20_13.10.png" alt="Wykres WIG20" /> Source: Tradingview   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 13 Oct 2023 10:26:00 +0200According to the latest pre-election polls, it is possible that there might not be eight-year-long United Right government in Poland after the parliamentary elections scheduled for Sunday, 15 October. Along with the prospects of the opposition taking po...US bonds augur a crisis in the West? Rising yields and the consequenceshttps://invest.conotoxia.com/investment-research/comments/us-bonds-augur-a-crisis-in-the-west-rising-yields-and-the-consequenceshttps://invest.conotoxia.com/investment-research/comments/us-bonds-augur-a-crisis-in-the-west-rising-yields-and-the-consequencesYields on 30-year US Treasury bonds briefly exceeded 5%. Such levels were last seen before the great financial crisis of 2008. Are we facing the harbinger of another major setback? Not necessarily. However, this does not mean that the situation is safe. After all, high interest costs mean that the long-term potential of western markets is beginning to melt away before our eyes, especially as developed countries are now in debt up to their eyeballs. Stimulating economies with further series of debt will be the most difficult since the beginning of this century. High long-term government bond yields have also pierced the multi-year corporate yield of the US S&P 500 index. If so, what could we expect in the financial markets and when will we see a reversal of this trend?Table of contents: <ol> <li><a title="The future of interest rates" href="#heading-scroll1">The future of interest rates</a></li> <li><a title="Warren Buffet explains how interest rates affect the market" href="#heading-scroll2">Warren Buffet explains how interest rates affect the market</a></li> <li><a title="Crisis in banks and real estate" href="#heading-scroll3">Crisis in banks and real estate</a></li> </ol> <h2 id="heading-scroll1">The future of interest rates</h2> If we look at the probability of interest rate changes according to the CME FedWatch Tool, we can see that there are unlikely to be any more interest rate rises. The first reductions are forecast from March next year with a probability of 24.7%. This is of particular importance for the bond market, as their valuation depends very much on the expected level of interest rates. Even so, it is difficult to predict unequivocally how long interest rate increases on long-term debt will last. Nevertheless, should a recession occur, we are likely to see a drastic fall in yields, resulting from a reduction in interest rates. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/Tabela_propability_12.10.png" alt="Tabela prawdopodobieństwa stóp procentowych" width="1314" height="675" /> Source: <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html">https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html</a> <h2 id="heading-scroll2">Warren Buffet explains how interest rates affect the market</h2> Warren Buffett aptly compared interest rates to gravity in the market. The higher the interest rates, the harder it is to achieve growth. This is because fewer projects become profitable. Therefore, companies that can sustain growth in such an environment can be considered solid. Currently, the yield on investments in companies from the S&P 500 index is 4.03%, which is 0.5% lower than the yield on 10-year US bonds. In the past, similar situations never lasted for long, as investments in equities always carry an additional risk, which must be reflected in the so-called risk premium. This term refers to the minimum expected return needed to cover this risk. Therefore, we can expect either a sudden increase in companies' earnings (which does not seem likely in view of the current crisis fears) or a drastic fall in bond yields. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_S%26P500_earnings_yeld_12.10.png" alt="wykres rentowności spółek indeksu SPX" width="1397" height="675" /> Source: <a href="https://www.gurufocus.com/economic_indicators/151/sp-500-earnings-yield">https://www.gurufocus.com/economic_indicators/151/sp-500-earnings-yield</a> A fall in government bond yields would result in, among other things, a rise in the iShares 20 Plus Year Treasury Bond ETF (TLT), which is currently at its 16-year lows. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_TLT_dzienny_12.10.png" alt="wykres obligacje amerykańskie" /> Source: Conotoxia MT5, TLT, Daily <h2 id="heading-scroll3">Crisis in banks and real estate</h2> The greatest impact of high bond yields is felt by the industry that has the most of these financial instruments in its portfolios. In particular, this is the financial sector, where banks often purchase long-term bonds in order to manage excess funds from customers and generate additional profits. As a result, the banking sector in the United States and Japan may be particularly vulnerable to selective fluctuations, especially for institutions that have not hedged against falling bond values. The capital-intensive real estate industry is also not benefiting from rising funding costs. The US has already seen property prices fall by 10% and Germany by 6.7%, and it seems a matter of time before this spills over to the rest of the developed economies.   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comThu, 12 Oct 2023 09:10:00 +0200Yields on 30-year US Treasury bonds briefly exceeded 5%. Such levels were last seen before the great financial crisis of 2008. Are we facing the harbinger of another major setback? Not necessarily. However, this does not mean that the situation is safe....Why is the National Bank of Poland increasing its gold purchases?https://invest.conotoxia.com/investment-research/comments/why-is-the-national-bank-of-poland-increasing-its-gold-purchaseshttps://invest.conotoxia.com/investment-research/comments/why-is-the-national-bank-of-poland-increasing-its-gold-purchasesSince the beginning of the year, the National Bank of Poland's gold reserves have increased by almost half, making Poland the second largest buyer of bullion in the world as of April this year. Despite the drop in gold prices from US$2050 to US$1850 per ounce, the NBP continues its buying programme, currently ranking 18th in the world in terms of gold reserves. Why do central banks invest in gold and is such a decision justified?<h3>Gold reserves at the National Bank of Poland</h3> Poland's history with gold dates back to the very beginnings of the state. However, it is worth noting the inter-war period, when, in flight from the Second World War, the central bank's resources travelled successively: Romania, Turkey, Syria, France, the north and west of Africa, eventually ending up in New York, London and Ottawa. Nearly 80 tonnes of gold in various forms after the war were used by the communists as pledges for loans. When the loans were not repaid, the pledge was lost. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/mapa_NBP_10.10.png" /> Source: <a href="https://nbp.pl/wp-content/uploads/2022/09/zloto-jako-skladnik-rezerw.pdf">https://nbp.pl/wp-content/uploads/2022/09/zloto-jako-skladnik-rezerw.pdf</a> Currently, gold reserve holdings have risen to 314.4 tonnes and the pace of purchases of the bullion, held mainly in London at the Bank of England, has since April this year surpassed even the world's largest economies, including the central bank of Singapore, which is renowned for its continued investment in large amounts of foreign reserves. According to the World Gold Council (WGC), Poland led the world in the second quarter of this year alone, purchasing 48.41 tonnes of gold (compared to China's 45.1 tonnes). The latest information from September shows that since April this year. Poland has increased its holdings by 85.7t of bullion. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/Zakupy_z%C5%82ota_10.10.png" /> Source: <a href="https://www.gold.org/goldhub/data/gold-reserves-by-country">https://www.gold.org/goldhub/data/gold-reserves-by-country</a> As the President of the National Bank of Poland Adam Glapinski stated, "We are a very serious partner and we will continue to buy this gold. The dream is to reach 20%." This announcement indicates that Poland intends to continue buying to increase the share of gold in its reserves from the current 11.2%. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/Zapasy_z%C5%82ota_NBP_10.10.png" /> Source: Dane NBP <h3>But why are central banks buying up gold?</h3> There are several reasons why central banks invest in gold. After the so-called 'Nixon shock' in 1971, when we left the gold parity system in favour of a free exchange rate, a new model of central bank intervention emerged. Currencies are now judged, among other things, by the competitiveness of economies against each other. Developing countries could expect their currencies to strengthen. Of course, such a scenario is only the case when the central bank acts independently (which is not the case, for example, in euro area countries) and there is free movement of capital. Hence, increasing the share as a component of reserves can serve to: <ul> <li style="font-weight: 400;" aria-level="1">increase the credibility of the state in the eyes of investors, since gold, unlike printed currency, cannot be counterfeited;</li> <li style="font-weight: 400;" aria-level="1">increase the security of the financial system, as gold can always be sold regardless of the situation;</li> <li style="font-weight: 400;" aria-level="1">diversifying the sources of reserves and becoming less dependent on, for example, the US dollar, which is the largest reserve currency.</li> </ul> In the case of China, which imposes strict restrictions on investment, the central bank buys gold primarily because of the threat of recession, currently marked by, among other things, an 8.8% year-on-year decline in exports in August. It is worth noting that China has only 4% of its total reserves in gold, which places it seventh in this hierarchy. This also appears to be an attempt to diversify the sources of reserves to become independent of the situation in Western countries. Until now, the main asset purchased by the Central Bank of China has been US bonds, i.e. US debt. The main motivation for the National Bank of Poland to buy gold, on the other hand, seems to be to increase the stability of the Polish financial system and to strengthen the confidence of foreign investors. This confidence has been clearly damaged by high inflation (18.4% at its peak) and the rapid weakening of the Polish currency. Another argument could be the increase in national security. Poland is one of the largest suppliers of arms to Ukraine, which is reflected in increased tensions in relations with Russia and Belarus. As President Glapinski put it: 'Contrary to what some people said during the war, it turned out that the rating agencies and the world take gold reserves very much into account because they are so safe, flexible, easy to use. There is a respect for us and our position, a confidence that comes with it'. This could be confirmed by the form in which the central bank acquires in the form of deposits with the Bank of England. This allows such reserves to be quickly liquidated when needed without the risk and cost of holding bullion. <h3>What determines the price of gold at present?</h3> Gold is considered a so-called safe haven in investments, which means increased demand during periods of economic and geopolitical uncertainty. Currently, after a prolonged decline, we may see a temporary rise in bullion prices as a reaction to the Hamas attack on Israel. This situation is of particular geopolitical significance due to Israel's close relationship with the United States, which has its military bases in the region. As the price of gold is influenced by demand and supply is limited, it seems that we could now expect a change in trend and price rises. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_XAUUSD_dzienny_10.10.png" /> Source: Conotoxia MT5, XAUUSD, Daily   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comTue, 10 Oct 2023 12:56:00 +0200Since the beginning of the year, the National Bank of Poland's (NBP) gold reserves have increased by almost half, making Poland the second largest buyer of bullion in the world as of April this year. Despite the drop in gold prices from US$2050 to US$18...Next week to watch (9 – 13.10.)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-9-13-10https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-9-13-10The third-quarter corporate earnings release season will officially commence next week with PepsiCo, Fastenal, and a list of financial institutions leading the way. In addition to corporate results, investors will also be able to pay attention to inflation developments in the US and Germany, as well as the latest data on the month-on-month change in UK GDP. <h3>Wednesday 11.10. 06:00 GMT, Germany Consumer Price Index (CPI) (September)</h3> The CPI index measures changes in the prices of consumer goods and services. It covers different types of products, such as food, fuel, transportation services, cosmetics, household goods, clothing, and many others. The purpose of the CPI index is to measure the increase or decrease in the cost of living for consumers. As the CPI index rises, consumers' purchasing costs increase, affecting their money's purchasing power. The CPI index is used to monitor inflation or the overall rise in prices in the economy. It allows us to assess whether prices are rising too fast or too slowly and to determine what economic policy measures should be taken to offset the adverse effects of inflation. In September 2023, Germany's year-on-year consumer price inflation recorded a notable decline, falling to 4.5% from 6.1% in the previous month and slightly below the market's initial estimate of 4.6%. Notably, this is the lowest inflation rate observed since the onset of the conflict in Ukraine back in February 2022. The deceleration in inflation can be attributed to a slower rate of price increases in both services and goods. Prices for services showed a more moderate increase of 4.0% (compared with 5.1% in August). This moderation was largely due to a base effect resulting from the abolition of the 9 euro monthly ticket for public transport in September 2022. Furthermore, goods inflation also declined, dropping to 5.0% from 7.1%. This decrease might be attributed to a slowdown in both food prices (7.5% compared to 9.0%) and energy costs (1.0% compared to 8.3%). The drop in energy costs, in particular, was heavily influenced by a base effect when compared to September 2022, which marked the conclusion of a fuel discount. Additionally, the core inflation rate, which excludes volatile items like food and energy, reached a one-year low of 4.6%. The initial estimate for the month-on-month CPI was reported at 0.3%, keeping the same pace since June.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykresNiemcy_CPI_06.10.png" /> Source: Tradingeconomics.com If the reading is higher than expected, inflation is higher, possibly favouring a fall in the EUR. Meanwhile, it is also a stimulus for the ECB to raise interest rates and reduce the money supply, causing an increase in the EUR. If the reading is lower than expected, it may give the ECB an argument to stop its policy of raising interest rates. Impact: EUR, DAX and other indices <h3>Thursday 12.10. 06:00 GMT, UK Gross Domestic Product (GDP) MoM (August)</h3> Gross domestic product (GDP) indicates the total value of goods and services produced in a country for a certain period. GDP is an important indicator of the health of an economy because it gives an overall picture of how well or poorly it is doing. If the GDP growth is higher than expected, the economy is in good shape and growing faster than expected. On the other hand, if the GDP growth is lower than expected, the economy performs weaker than anticipated. In July 2023, the British economy experienced a significant contraction of -0.5% on a month-over-month basis, marking the most substantial decline witnessed throughout the year and reversing the 0.5% growth observed in June. These figures fell short of market expectations, which had anticipated a more modest -0.2% decrease. The main driver of this contraction was the services sector, which shrank by -0.5%, in contrast to the 0.2% growth recorded in June. Within the services sector, the most significant negative impact came from the health sector, which saw a sharp decline of -3.4%. This drop was attributed to strikes in the NHS, resulting in appointments and medical procedures being cancelled. Additionally, there was a notable -3.4% decline in the field of computer programming, consultancy, and related activities. Consumer-facing services saw no growth, as opposed to the 0.5% growth seen previously, with the retail trade sector making the most significant negative contribution with a decline of -1.2%. Meanwhile, the production sector also witnessed a contraction of -0.7% (compared to the 1.8% growth in the previous month), with manufacturing shrinking by -0.8%. Within the manufacturing sector, the production of rubber and plastic products recorded a significant decline of -5.5%. The construction sector fell by -0.5%, a decrease from the 1.6% growth recorded earlier. When considering the three months leading up to July, the Gross Domestic Product (GDP) saw a modest increase of 0.2%. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_UK_06.10.png" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bullish effect on the GBP, while a lower-than-expected reading could be bearish for the GBP. Impact: GBP <h3>Thursday 12.10. 12:30 GMT, US Consumer Price Index (CPI) YoY (September)</h3> While Germany's inflation rate has been steadily declining, CPI in the United States continued to rise for the second consecutive month, reaching 3.7%, up from 3.2% in July. This surpassed market predictions, which had anticipated a rate of 3.6%. This upward trend in inflation can be attributed to several factors, including the recent increase in oil prices over the past two months and the influence of base effects from the previous year, which collectively pushed inflation higher. In July 2023, energy costs recorded a less pronounced fall of -3.6%, much less than the -12.5% observed in July. This reduction in energy costs was more gradual for fuel oil, with a decrease of -14.8% as opposed to -26.5%, and for gasoline, which declined by -3.3% instead of -19.9%. Furthermore, the cost of transportation services increased at a faster rate, rising to 10.3% from the previous rate of 9%. Conversely, inflation rates decelerated in various sectors, including electricity prices (2.1% vs 3%), food (4.3% vs 4.9%), shelter (7.3% vs 7.7%), new vehicles (2.9% vs 3.5%), and apparel (3.1% vs 3.2%). Additionally, there were more significant declines in the cost of utility gas service (-16.5% vs -13.7%), medical services (-2.1% vs -1.5%), and used cars and trucks (-6.6% vs -5.6%). However, the core inflation rate, which excludes food and energy prices, exhibited a slowdown for the fifth consecutive month, reaching 4.3%, aligning with market expectations. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_US_CPI_06.10.png" /> Source: Tradingeconomics.com If the reading is higher than expected, inflation is higher, possibly favouring a fall in the USD. Meanwhile, it is also a stimulus for the Fed to raise interest rates and reduce the money supply, causing an increase in the USD. If the reading is lower than expected, it may give the Fed an argument to stop its policy of raising interest rates. Impact: USD, S&P 500 and other indices <h3>Stocks to watch</h3> PepsiCo (PEP) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 2.15. Positive earnings surprise in 10 out of the last 10 reports. Time: Tuesday, October 10, before the market opens.  BlackRock (BLK) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 8.79. Positive earnings surprise in 9 out of the last 10 reports. Time: Wednesday, October 11.  Fastenal (FAST) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 0.5047. Positive earnings surprise in 9 out of the last 10 reports. Time: Thursday, October 12 before the market opens.  JPMorgan (JPM) announcing its earnings results for the quarter ending on 09/2023. Forecast EPS: 3.86. Positive earnings surprise in 8 out of the last 10 reports. Time: Friday, October 13 before the market opens.    Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72,95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 06 Oct 2023 10:13:00 +0200The third-quarter corporate earnings release season will officially commence next week with PepsiCo, Fastenal, and a list of financial institutions leading the way. In addition to corporate results, investors will also be able to pay attention to inflat...OPEC+ holds the key to market balance. What will the future bring?https://invest.conotoxia.com/investment-research/comments/opec-holds-the-key-to-market-balance-what-will-the-future-bringhttps://invest.conotoxia.com/investment-research/comments/opec-holds-the-key-to-market-balance-what-will-the-future-bringWTI crude oil prices have fallen 11% from their local highs in just five sessions, reaching around US$84 per barrel. Is this a sign of a break in the uptrend that had been in place since June this year? Let's take a look at the data and consider whether there should be a shortage of this commodity in the market.<h3>OPEC+ permanently stands by cuts</h3> The OPEC cartel, along with Russia and other oil producers, decided to maintain the current level of oil production cuts at Wednesday's meeting. However, looking at the monthly global demand forecasts contained in OPEC reports, there is no sign of a slowdown at present. At the current level of global oil production of 101.12 million barrels per day, shortages could reach around 2% by the end of this year and up to 4.2% of demand by the end of next year. It is worth comparing these projections with the pandemic crisis period in 2020, when excess production was 3% over then demand, resulting in negative and lowest prices in the history of oil contracts. It is also worth comparing this to last year, when there were virtually no shortages in the market, despite the oil shock causing the price of oil to rise above the US$120 per barrel level. Because OPEC has only started to include forecasts for next year in its reports since July this year, the graph is only partially incomplete. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_prognozy_porownanie_05.10.png" /> Source: OPEC data, Conotoxia analysts' study This suggests a continuation of the trend despite the current declines, and it may only be a matter of time before the $100 per barrel level is exceeded under current conditions. Nevertheless, we must always remember that this is one of the most controlled markets in the world, where decisions do not always have to be made purely for economic gain. Nevertheless, high oil prices are beneficial for producers, especially in a market where demand is relatively inelastic. <h3>How much does the situation in the United States affect the oil market?</h3> Although the latest reports on changes in US oil inventories showed a larger decline than expected, there is still no historical relationship between changes in inventories and the price of oil, as <a href="https://invest.conotoxia.com/investment-research/comments/crude-oil-trading-what-do-the-inventory-level-readings-tell-us?_ga=2.173313124.698389948.1696425681-1083020427.1665745782&pk_vid=87050761a9e8ca161696507859ce11e5">we have written about before</a>. Currently, the US is the world's largest oil consumer, accounting for as much as 20.4% of global demand. China is second, with a share of 15.1%, and the European Union is third with a share of 13.7%. Together, these three economic areas account for just under half of global oil consumption, so forecasts of their future demand are crucial.  Several indicators may have contributed to the current discount. These include US GDP at 2.1%, which confirmed the expected economic slowdown. In addition, Fed Chairman Jerome Powell's message of keeping interest rates high for an extended period of time could limit the growth potential of the US economy in the long term. If one looks closely at the current projections in the OPEC report, one can see that no significant changes in demand volumes are expected in any of these economic areas. Of course, these figures are subject to revision and the latest information will be released on 12 October. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_prognozy_najwieksze_gosp_05.10.png" /> Source: OPEC data, Conotoxia analysts' study <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_XTIUSD_dzienny_05.10.png" /> Źródło: Conotoxia MT5, XTIUSD, Daily   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. <div id="gtx-trans" style="position: absolute; left: 495px; top: 4388.08px;"> <div class="gtx-trans-icon"> </div> </div>forex conotoxia.comThu, 05 Oct 2023 14:04:00 +0200WTI crude oil prices have fallen 11% from their local highs in just five sessions, reaching around US$84 per barrel. Is this a sign of a break in the uptrend that had been in place since June this year? Let's take a look at the data and consider whether...The 5 companies with the best free cash flow yield, or how to assess investment potential?https://invest.conotoxia.com/investment-research/comments/the-5-companies-with-the-best-free-cash-flow-yield-or-how-to-assess-investment-potentialhttps://invest.conotoxia.com/investment-research/comments/the-5-companies-with-the-best-free-cash-flow-yield-or-how-to-assess-investment-potentialWhen analysing companies, we often wonder what key metrics we should look at. Is it the net profit margin, the dividend yield, or is there another relevant measure we should be looking at? It also seems interesting from a finance theory point of view that, instruments such as bitcoin, gold or other commodities have almost zero value because they do not generate cash flows. In finance, we define the value of any asset as the present value of future free cash flow . And it is this value that investors should look for when investing in equities. So let's consider what this cash flow is and how to measure it, and which companies generate the most of it relative to current capitalisation.<h3>Free cash flow is what generates value for investment</h3> Values such as net profit or dividends have their limitations, which are worth bearing in mind. Firstly, net profit is a book value, which means that it may be susceptible to accounting manipulation. Secondly, the company may not pay dividends regularly or at all, which would distort its analysis over time. To address these issues, the concept of so-called free cash flow can be used to help measure how much a company could actually pay out to shareholders based on the cash it generates. We can see this as a kind of 'virtual dividend' for shareholders. It takes into account different types of distributions, such as dividends, share buybacks, etc., while eliminating many accounting values, such as depreciation and amortisation, which can reduce net income. This allows the value of free cash flow to be a more reliable indicator of a company's ability to pay out to shareholders. In the world of finance, the present value of future free cash flow appears to be important. Hence, there is a problem with determinations such as the value of gold, bitcoin and other assets. We are not always able to determine the value based on this, we often only measure the price. The formula for calculating free cash flow to shareholders is very simple to apply and is as follows: <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wz%C3%B3r_FCF_04.10.png" /> Source: <a href="https://stockanalysis.com/term/free-cash-flow/">https://stockanalysis.com/term/free-cash-flow/</a> This represents the amount of cash generated by the company's operating activities less capital expenditure on the purchase of new equipment and machinery (CAPEX). It is important to understand that negative free cash flow values are not always negative, as they can result from investment in the company's growth when capital expenditure is greater than operating cash flow. <h3>Top S&P 500 index companies in terms of price to free cash flow (P/FCF) ratio</h3> Ultimately, rather than relying on the most popular price/earnings ratio (C/Z), which is susceptible to a variety of factors, including accounting measures and the lack of consideration of distributions to investors, such as dividends or share buybacks, it is worth considering the use of the price/free cash flow (P/FCF) ratio. The interpretation is simple. The lower it is (positive), the higher the return to the investor. Of course, it is burdened by the fact that it is based on past values, so to select the best companies we will only include those whose analysts expect operating profit to grow by at least 5% over the next five years. Principal Financial Group Inc. (Principal) is a company specialising in financial services, with a particular focus on the area of insurance and capital management in the United States. Currently, the company's P/FCF (Price to Free Cash Flow) ratio is 4.1, the lowest for companies in the S&P 500 index, with a projected earnings growth rate of 6.7%. It appears that the company, like the US financial industry as a whole, is experiencing a strong discount this year, which could create potential investment opportunities. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Principial_04.10.png" /> Source: Conotoxia MT5, Principal, Daily In second place is US-based Northern Trust Corporation (NorthTrust), which specialises in asset management, custody and trust services, mainly for large corporations. It has a P/FCF ratio of 4.8 and a projected earnings growth rate of 8.9%. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_northTrust_04.10.png" /> Source: NorthTrust, Daily In third place was leading steel and steel processing manufacturer Steel Dynamics Inc. (SteelDyn). The P/FCF ratio for this company is 5.8 and the projected earnings growth rate is as high as 28%. It is worth noting that SteelDyn is a company whose financial performance is heavily dependent on fluctuations in raw material prices, particularly steel prices, which is a key factor affecting its performance. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Steel_Dyn_04.10.png" /> Source: Conotoxia MT5, SteelDyn, Daily In fourth place is Expedia Group Inc. a US-based travel and online company. The company offers various services and platforms related to online travel and bookings, such as Expedia.com, Hotels.com, Orbitz and Travelocity. The company's P/FCF ratio is 6.25, with a projected earnings growth rate of 25%. The company is a direct competitor to platforms such as Booking and Airbnb, among others. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Expedia_04.10.png" /> Source: Conotoxia MT5, Expedia, Daily Fifth place goes to international insurance and reinsurance company Arch Capital Group Ltd. (ArchCapital). The company not only offers a variety of insurance products, but also provides reinsurance services, meaning that it indemnifies insurers against excessive risks in their insurance portfolios. This helps insurers effectively manage their risks and minimise potential losses. The P/FCF ratio is 6.6, with a projected average annual earnings growth rate of 19.7%. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Arch_Capital_04.10.png" /> Source: Conotoxia MT5, ArchCapital, Daily If we compare the P/FCF ratio of these companies over time, we see that Northern Trust, Steel Dynamics and Expedia are particularly attractive in the context of the historical valuation of this ratio. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_porownanie_P_FCF_04.10.png" /> Source: <a href="https://www.macrotrends.net/stocks/stock-comparison?s=price-fcf&axis=multiple&comp=PFG:NTRS:STLD:EXPE:ACGL">https://www.macrotrends.net/stocks/stock-comparison?s=price-fcf&axis=multiple&comp=PFG:NTRS:STLD:EXPE:ACGL</a>   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.95% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. <div id="gtx-trans" style="position: absolute; left: 497px; top: 9508.42px;"> <div class="gtx-trans-icon"> </div> </div>forex conotoxia.comWed, 04 Oct 2023 15:03:00 +0200When analysing companies, we often wonder what key metrics we should look at. Is it the net profit margin, the dividend yield, or is there another relevant measure we should be looking at? It also seems interesting from a finance theory point of view th...Is Bitcoin quietly beginning a continuation of the bull market?https://invest.conotoxia.com/investment-research/comments/is-bitcoin-quietly-beginning-a-continuation-of-the-bull-markethttps://invest.conotoxia.com/investment-research/comments/is-bitcoin-quietly-beginning-a-continuation-of-the-bull-marketSir John Templeton once stated that "Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria". It seems that we have been seeing uncertainty in the crypto market for some time, stemming from declining confidence in the major exchanges. An example of this is the decline in Binance's market share of cryptocurrency exchanges - from 73% to around 50%. Despite this, bitcoin's listings have been rising to US$28,000 since reaching a low around US$15,000. Are we now seeing the end of the uptrend correction?<h3>Binance legal problems</h3> For several months now, the Binance exchange has been in the spotlight of regulators around the world. In April 2023, the US Securities and Exchange Commission (SEC) brought a lawsuit against Binance, accusing it of operating an unregulated business in the US. In May 2023, the exchange was fined £3.3 million by the UK financial regulator FCA for operating in the UK without the required licence. These events contributed to the decline of Binance's shares in the cryptocurrency market. In January 2023 Binance dominated, accounting for 72.7% of total non-US cryptocurrency market turnover, according to data from THE BLOCK. However, by September, its share had fallen to around 50%. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_binance_share_02.10.png" width="1100" height="923" /> Source: <a href="https://www.theblock.co/post/253132/binance-market-share-non-usd-exchanges">https://www.theblock.co/post/253132/binance-market-share-non-usd-exchanges</a> In response to these challenges, Binance has taken a number of steps to improve its situation. In July 2023, it announced a plan to phase out products and services that could raise concerns with regulators. In August 2023, Binance.US, a US exchange regulated by the SEC, was launched. Meanwhile, total turnover on cryptocurrency exchanges has fallen by 60% since the beginning of the year. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_wolumen_gie%C5%82dy_02.10.png" /> Source: <a href="https://www.theblock.co/data/crypto-markets/spot">https://www.theblock.co/data/crypto-markets/spot</a> The low trading volume is characterised by the fact that each major transaction causes significant fluctuations in the market, which has become noticeable in recent weeks. The sudden rise in price within a few minutes, offset later by a lack of demand, is a perfect example of this situation (see arrows on the chart). Investors with large amounts of capital, often referred to as 'whales', currently invest in the largest cryptocurrency, which accounts for 46% of the total market capitalisation of digital currencies. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_BTCUSD_H4_02.10.png" /> Source: Conotoxia MT5, BTCUSD, H4 <h3>The progressive loss of money in the crypto market</h3> One way to determine whether new funds are currently flowing into cryptocurrency market investments is to analyse the capitalisation of stablecoin. This allows us to see that capital in the cryptocurrency market has melted by 11.5% since the beginning of the year, and this downward trend has continued uninterrupted since May 2022. It seems that without an influx of new capital, it may be difficult to see a clear recovery of the cryptocurrency market. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stablecoin_merccap_02.10.png" /> Source: <a href="https://btctools.io/stats/market-cap">https://btctools.io/stats/market-cap</a> <h3>Is it so bad that it can't get any worse?</h3> The data presented shows that the situation in this market is currently not very encouraging, and interest in it is clearly declining. Nevertheless, the listing of Bitcoin and other leading cryptocurrencies continues to rise. Is this behind the speculative play of big capital? This question seems particularly important given that none of the cryptocurrencies have an intrinsic value. Therefore, when analysing this market, we need to pay attention to completely different factors that seem to be influencing its resurgence, but in a longer time frame than we might assume.   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. <div id="gtx-trans" style="position: absolute; left: 494px; top: 5234.24px;"> <div class="gtx-trans-icon"> </div> </div>forex conotoxia.comTue, 03 Oct 2023 09:17:00 +0200Sir John Templeton once stated that "Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria". It seems that we have been seeing uncertainty in the crypto market for some time, stemming from declining confidence i...Next week to watch (2 – 6.10.)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-2-6-10https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-2-6-10As China celebrates the founding of the People's Republic of China throughout the week, we will be following the latest unemployment figures from the eurozone and the United States. The Reserve Bank of Australia and the Reserve Bank of New Zealand will vote on interest rate changes, but the consensus view is that both central banks will leave rates unchanged. <h3>Monday 2.10. 09:00 GMT, Euro Area Unemployment Rate (August)</h3> The unemployment rate is the percentage of people without a job actively seeking employment in the previous month relative to the total number of people of working age or in the labour market. A high unemployment rate means that a large number of people are out of work despite actively seeking employment. A low unemployment rate indicates a stable labour market and greater availability of jobs.  Unemployment rates are important for economic analysis and can affect social and economic aspects. A high unemployment rate is associated with lower incomes and increased poverty, while a low unemployment rate promotes increased wages and social welfare. Governments and policymakers monitor the unemployment rate to assess the effectiveness of employment policies and take action to create jobs and support the unemployed. However, it should be remembered that the unemployment rate is one of many tools for assessing the labour market. Analysing other indicators, such as the labour force participation rate or wages, is also important. Due to the vast amount of data to be collected from each eurozone Member State, the overall unemployment rate in the common currency area is published with a delay. In the upcoming announcement, data for August 2023 will be reported. In July, the eurozone saw its seasonally adjusted unemployment rate remain at a historically low level of 6.4%, aligning with market expectations. This figure marked a decrease from the 6.7% rate recorded one year earlier. However, there was an increase in the number of unemployed individuals, rising by 73 thousand compared to the previous month, bringing the total to 10.944 million. The youth unemployment rate, which gauges individuals under 25 seeking employment, held steady at a historic low of 13.8% in July 2023, showing no change from the preceding month. Among the largest economies within the eurozone, Germany boasted the lowest unemployment rate at 2.9%, while the highest rates were observed in Spain (11.6%), Italy (7.6%), and France (7.4%). <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/bezrobocie_eu_29.09.png" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bearish effect on the EUR, while a lower-than-expected reading could be bullish for the EUR. Impact: EUR <h3>Tuesday, 3.10. 03:30 GMT, Australia Interest Rate Decision</h3> Reserve Bank of Australia (RBA) board members vote on whether to raise, decrease, or leave interest rates unchanged. These decisions affect the currency's value, and interest rate policy is among the key instruments to regulate inflation. Investors closely follow central banks' decisions and changes in the level of interest rates, as this information can be crucial to their trading strategies. The currency's value tends to rise when interest rates are high, as they attract investors seeking higher returns on their deposits. Conversely, when interest rates are low, the currency's value tends to fall as investors look for other places to invest their money. During the most recent meeting under the leadership of Governor Philip Lowe, the Reserve Bank of Australia voted to keep its cash rate steady at 4.1%, marking the third consecutive month of maintaining the rate, which was consistent with market expectations. The Board acknowledged that while inflation had peaked, it remained elevated and was anticipated to remain so for an extended period. The central bank reiterated its stance that a further tightening of monetary policy may be necessary to bring inflation back to the target range of 2% to 3% within a reasonable time frame. It emphasised that any adjustments to the interest rate would depend on evolving economic conditions and price dynamics. In its projections, the Board expected inflation to reach around 3.25% by the end of 2024 and to return to the target range by the end of 2025. Meanwhile, the Australian economy was described as experiencing subdued growth that was expected to persist for some time. In addition, the forecast pointed to a gradual rise in unemployment to around 4.5% by the latter part of the following year.   <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/Australia_interest_rate_29.09.png" /> Source: Tradingeconomics.com A higher-than-expected rate may be positive for the AUD and negative for the stock market, while a lower-than-expected rate may be negative for the AUD and positive for the stock market. Impact: AUD, S&P/ASX 200 <h3>Wednesday, 4.10. 01:00 GMT, New Zealand Interest Rate Decision</h3> The Reserve Bank of New Zealand has also decided to maintain the official cash rate (OCR) unchanged in its latest meeting, however, at a higher rate of 5.5%. The Board acknowledged that the series of rate hikes, totalling 525 basis points since October 2021, had led to monetary conditions that were constraining spending and alleviating cost pressures. Nevertheless, the persistently high inflation continued, and the OCR needed to remain at a restrictive level to guide inflation back within the target range of 1% to 3% annually by the second half of 2024. The RBNZ's outlook still indicated that the OCR would peak at its current 5.5% level, with a potential upward risk for further rate increases. However, the central bank no longer anticipated the possibility of a rate cut until the first half of 2025. While maintaining a balanced view of the risks to the inflation outlook, the Committee highlighted the possibility that economic activity and inflation measures might not slow as much as expected. Looking ahead, there was concern that a slowdown in overseas demand, particularly in China, could put significant pressure on New Zealand's exports over the medium term. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/nowa_zelandia_stopy_proc_29.09.png" /> Source: Tradingeconomics.com A higher-than-expected rate may be positive for the NZD and negative for the stock market, while a lower-than-expected rate may be negative for the NZD and positive for the stock market. Impact: NZD, S&P/NZX <h3>Friday 6.10. 12:30 GMT, US Unemployment Rate (September)</h3> In the US, the unemployment rate has followed a different path to that in the eurozone. While nearly two times lower than in the eurozone, the US unemployment rate has fluctuated in recent months. In August 2023, the US witnessed an uptick in the unemployment rate, which reached 3.8%, marking the highest rate since February 2022 and surpassing the market's anticipated 3.5%. This increase resulted in a rise of 514 thousand unemployed individuals, bringing the total to 6.355 million, while employment levels experienced a modest increase of 222 thousand, reaching a total of 161.484 million. Additionally, the U-6 unemployment rate, a comprehensive measure that includes individuals who desire employment but have discontinued their job search, as well as those working part-time due to a lack of full-time opportunities, also increased in August. It reached 7.1%, the highest level since May 2022, compared to the 6.7% recorded in July. On a positive note, the labour force participation rate increased to 62.8% in August, marking its highest point since February 2020, surpassing the July rate of 62.6%. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/US_bezrobocie_29.09.png" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bearish effect on the USD, while a lower-than-expected reading could be bullish for the USD. Impact: USD <h3>Stocks to watch</h3> Tesco (TSCO) announcing its earnings results for the quarter ending on 08/2023. Forecast EPS: 10.04. Positive earnings surprise in 0 out of the last 10 reports. Time: Wednesday, October 4, before the market opens.  Constellation Brands A (STZ) announcing its earnings results for the quarter ending on 08/2023. Forecast EPS: 3.35. Positive earnings surprise in 7 out of the last 10 reports. Time: Thursday, October 5, before the market opens.  Tilray (TLRY) announcing its earnings results for the quarter ending on 08/2023. Forecast EPS: -0.0992. Positive earnings surprise in 3 out of the last 10 reports. Time: Friday, October 6.    Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73,02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 29 Sep 2023 11:49:00 +0200As China celebrates the founding of the People's Republic of China throughout the week, we will be following the latest unemployment figures from the eurozone and the United States. The Reserve Bank of Australia and the Reserve Bank of New Zealand will ...Poland on the list of exceptions: fuel prices lowest in the European Union, but for how long?https://invest.conotoxia.com/investment-research/comments/poland-on-the-list-of-exceptions-fuel-prices-lowest-in-the-european-union-but-for-how-longhttps://invest.conotoxia.com/investment-research/comments/poland-on-the-list-of-exceptions-fuel-prices-lowest-in-the-european-union-but-for-how-longOver the past six months, we have experienced a change in the mood of global oil markets. At the beginning we were talking about an oversupply of crude due to the economic slowdown. Now we are worried about shortages due to the OPEC cartel's production cuts. This change has triggered a rather sharp 33% increase in oil prices, to USD 96 per barrel. Along with this trend, fuels at filling stations are getting more expensive, but not everywhere. The cheapest fuel in the European Union can now be found in Poland, while the most expensive is in the Netherlands. Let us consider what might be the reason for these differences and what consequences a rigid policy of controlling prices at national level might have.<h3>Prices in Poland create an arbitrage opportunity</h3> For cross-country comparisons, we will use net prices, excluding VAT and customs duties. Comparing final prices, while important from a consumer perspective, is not adequate to assess possible under- or overpricing due to differences in tax regimes. In Poland, the current price of Eurosuper 95 petrol is EUR 1.31/l. After deduction of taxes and duties, the price is EUR 0.7/l, i.e. as much as 22% less than the average net price in Europe - EUR 0.9/l. The highest price of Eurosuper 95 petrol at fuel stations can be found in the Netherlands - EUR 2.13/l, but this is determined by national taxes. Interestingly, after deducting them, the most expensive country is Denmark where the net price is 14% higher than the EU average at EUR 1.03/l. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/mapa_ceny_paliw_28.09.png" width="920" height="1123" /> Source: <a href="https://energy.ec.europa.eu/data-and-analysis/weekly-oil-bulletin_en">https://energy.ec.europa.eu/data-and-analysis/weekly-oil-bulletin_en</a> High price differentials for a homogeneous product create the opportunity for so-called price arbitrage, i.e. buying the same product at a lower price and selling it at a higher price. The result can be the creation of shortages, restrictions on access to the commodity and, in the long term, the possibility of a black market in oil. Unfortunately, economic history has repeatedly shown that rigid price regulation leads to market gaps. An example of a country that has recently experienced the effects of price control policies is Hungary, where the price freeze at filling stations ended at the end of last year. The measures to combat the highest inflation in Europe led to the depletion of domestic stocks, which could not be replenished due to unprofitable imports. As a result, Hungary today has the second highest net prices for Eurosuper 95 petrol in Europe - EUR 1.01/l. <h3>Are drastic increases in petrol and diesel prices to be expected in Poland?</h3> According to the latest OPEC report, which we have had the <a href="https://invest.conotoxia.com/investment-research/comments/oil-prices-on-an-upward-trajectory-here-s-what-the-opec-report-shows?_ga=2.26818109.1895647768.1695820025-1083020427.1665745782&pk_vid=87050761a9e8ca161695903606ce11e5">opportunity to write about</a>, we are now facing expectations of increased demand (from Q4 this year) and production cuts by the largest consortium of oil producing countries, OPEC. The natural consequence of these actions seems to be an increase in the price of oil on world markets, and it will then only be a matter of time before the $100 level is exceeded. At a time when oil prices on world markets are rising by 33 per cent, wholesale fuel prices in Poland have fallen by 6.3 per cent. Poland's largest fuel supplier, the state-owned Orlen Group S.A., explains this by "fighting prices". In its latest communiqué, the company reassures that "fuel deliveries to Orlen stations and to our wholesale customers with whom we have contracts are proceeding without disruption". <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_hurtowe_ceny_ENG_28.09.png" /> Source: Conotoxia, own analysis It appears that the current "market" fuel price in Poland should be between EUR 1.62 and 1.72/l. However, it is difficult to predict when stocks of this commodity will reach their critical levels and, consequently, when prices may stabilise. Hungary was able to freeze fuel prices for slightly less than 12 months. It seems that Poland can survive a similar period. However, it is important to bear in mind an important event, although not directly related to the market, which is the parliamentary elections in Poland scheduled for 15 October. There is a high probability that the situation in this market may change just after the elections. Nevertheless, a sudden and steep increase in fuel prices, such as we experienced in Hungary after the abolition of maximum prices, should not be expected.   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comThu, 28 Sep 2023 14:25:00 +0200Over the past six months, we have experienced a change in the mood of global oil markets. At the beginning we were talking about an oversupply of crude due to the economic slowdown. Now we are worried about shortages due to the OPEC cartel's production ...Why do most fund managers underperform the average? A word about "fat tails"https://invest.conotoxia.com/investment-research/comments/why-do-most-fund-managers-underperform-the-average-a-word-about-fat-tailshttps://invest.conotoxia.com/investment-research/comments/why-do-most-fund-managers-underperform-the-average-a-word-about-fat-tailsThere are certain terms and phenomena in the investment world that are often a source of controversy and confusion. One such term is the 'fat tail'. This term comes from the field of statistics and refers to rare but influential events that can significantly impact investment performance. Economist Nassim Taleb called these events black swans, which further emphasises their unusual nature.<h3>Equities beating major assets over the long term?</h3> As you explore the investment market, you will come across charts that compare the performance of different types of assets, such as stocks, bonds or gold. For many years, the S&P 500 Index (US500) has outperformed other assets, and this gap has grown as the investment period has lengthened. Nevertheless, it is worth noting that gold investment over this decade, despite not generating additional value such as dividends, has long outperformed the market average. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_klasy_aktywow_27.09.png" /> Source: Tradingview <h3>Most investors perform worse than average</h3> The problem is the correct interpretation of the term 'average'. Many investors try to outperform the average market performance. However, if we look at the performance of all hedge funds managed by outstanding professionals, we see that most of them underperform the 'average'. Over the past 15 years, it is estimated that less than 10% of actively managed funds have outperformed the market average. Why is this the case? <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/procent_hedge_fundow_27.09.png" width="921" height="512" /> Source: <a href="https://www.spglobal.com/spdji/en/spiva/article/spiva-us/">https://www.spglobal.com/spdji/en/spiva/article/spiva-us/</a> If we look at the proportion of companies that have outperformed the S&P 500, we see that only 26% of companies have posted a higher return than the market average over the past year. This percentage does not exceed 35% for the last three years and decreases as the period gets longer. However, this is not the most worrying statistic. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/procent_bij%C4%85cych_ENG_27.09.png" /> Source: Conotoxia own analysis <h3>'Fat tails' move the indices, not most of the market</h3> Analysing the average annual return for the last year, we can see that only nine companies out of a total of 3,500 listed on the New York Stock Exchange (NYSE) had a significant impact on the growth of the S&P 500 index during this period. The question is, how many of the major fund managers were able to predict that these were the companies that would perform in such a way, especially since as many as 46% of the companies posted losses? The biggest contributors to the current rise of the S&P 500 index were the so-called FAANG technology giants, namely Meta Platforms (Facebook), Amazon, Apple, Nvidia, Alphabet (Google) and Tesla. Consequently, it is still difficult to speak of a new bull market when only a few companies are performing significantly above average. This is what we call the 'fat tails' phenomenon in statistics. More than half (51%) of companies have recorded losses over the past five years. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/rozk%C5%82ad_roczny_ENG_27.09.png" /> Source: Conotoxia own analysis <h3>Does this mean that we should not invest in equities?</h3> Of course not. However, we can use this knowledge to our advantage. It is worth understanding that, as individual investors, we are not confined to one asset class and we are not obliged to settle on a regular basis, as most hedge fund managers are. Nevertheless, let us remember that beating the 'average' that is the S&P 500 over the long term may be more difficult than it seems. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_SP500_27.09.png" /> Source: Conotoxia MT5, US500, Weekly   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comWed, 27 Sep 2023 14:49:00 +0200There are certain terms and phenomena in the investment world that are often a source of controversy and confusion. One such term is the 'fat tail'. This term comes from the field of statistics and refers to rare but influential events that can signific...Stock market sectors undervalued and full of investment potential - where to look for opportunities?https://invest.conotoxia.com/investment-research/comments/stock-market-sectors-undervalued-and-full-of-investment-potential-where-to-look-for-opportunitieshttps://invest.conotoxia.com/investment-research/comments/stock-market-sectors-undervalued-and-full-of-investment-potential-where-to-look-for-opportunitiesSince the beginning of the year, the main US S&P 500 index has risen by more than 13%, almost reaching its historic peaks. What has driven the market in recent years and which sectors are historically considered the most undervalued?<h3>Is the market currently overvalued?</h3> For a historical comparison of valuations, we will use the basic ratio of price to next year's (forecast) net profit (forward P/E). Before doing so, however, we will point out the most important disadvantage of this parameter. It is based on past earnings, whereas the market share price includes a forecast for the following months. Of course, it is important to bear in mind here that the use of earnings forecasts is subject to a certain degree of risk, and forecasts will differ from one another. Nevertheless, the use of forecasts brings us much closer to reality than the analysis of historical data alone. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PE_25.09.png" width="921" height="523" /> Source: <a href="https://www.multpl.com/s-p-500-pe-ratio">https://www.multpl.com/s-p-500-pe-ratio</a> Currently, the fundamental P/E ratio for the S&P 500 index is 24.8. In the more than 100-year history of the US stock market, it has only been 8% higher. However, if we look at the values of this ratio since the beginning of 2000, it has been higher in 36% of the years. Does this mean that we are currently in a period of overvaluation in the market? <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/percentyl_od_1871_ENG_25.09_.png" /> Source: Conotoxia own analysis <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/percentyl_od_2000_eng_25.09.png" /> Source: Conotoxia own analysis However, if earnings forecasts are taken into account, it becomes clear that the S&P 500 index is far from being in an overvalued state. The current value of the future price-to-earnings (P/E) ratio is 23, according to Gurufocus data, and the forecast for the end of 2024 is for it to fall to 19.1 at current index levels, which is practically in the middle of the median range of 18. In summary, we can conclude that we are currently a long way from crises such as the technology bubble (2000), the financial crisis (2008) or even post-pandemic crisis levels (2020). However, the high current values of the P/E ratio reflect the low level of profits that are the result of the economic downturn. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_forward_PE_SP500_25.09.png" /> Source: <a href="https://www.gurufocus.com/economic_indicators/6061/sp-500-pe-ratio-with-forward-estimate">https://www.gurufocus.com/economic_indicators/6061/sp-500-pe-ratio-with-forward-estimate</a> <h3>Sectors mostly able to enjoy good results</h3> If we look at the sectors' rates of return in a year-on-year comparison, there is a clear dominance of two sectors: technology and communication services, which reached 24.1 and 22% respectively. This is largely due to the potential for the development of artificial intelligence (AI), with Nvidia or Cosco. The worst-performing sectors were real estate and utilities, which recorded declines of 10.8% and 13.5% respectively. For the real estate sector in particular, this decline is not necessarily surprising, as this market is particularly sensitive to high interest rate levels. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/stopy_zwrotu_roczne_25.09.png" width="924" height="299" /> Source: <a href="https://finviz.com/groups.ashx">https://finviz.com/groups.ashx</a> <h3>Sectors most sensitive to cycles are not cheap</h3> The consumer goods (Consumer Discretionary) and technology (Information Technology) sectors are mainly exposed to economic cycles. Their future P/E ratios currently stand at 25. Although these values are not the lowest they have been in recent years (especially when compared to the pre-crisis period in 2008), it is difficult to speak today of an imminent crisis. It is also worth noting that, comparing the current P/E ratios to the technology bubble period of 2000, when they reached as high as 45, it is difficult to consider that there is currently a bubble in the technology sector. Consequently, if artificial intelligence were to cause a similar stir to the development of the internet, we could expect to see a continuation of increases, including on the Nasdaq index (US100). <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_forward_PE_Consumer_Discretionary_25.09.png" /> Source: <a href="https://www.yardeni.com/">https://www.yardeni.com/</a> <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_US100_dzienny_25.09.png" /> Source: Conotoxia MT5, US100, Daily <h3>Does safe equals cheap?</h3> The least susceptible to economic cycles are the basic goods (Consumer Staples), health care  and finance sectors. These appear relatively stable regardless of the economic climate, as there is a constant need to purchase basic products, health care and use financial services. However, when we look at their valuations in a historical context, we can see that the basic goods sector remains at a higher level, but not above the norm (forward P/E ratio is 19.1). The health sector is a long way from the levels of 2000 (forward P/E ratio is 17.2) and the financial sector remains at its natural level, despite the banking crisis earlier this year (the forward P/E ratio is 13.5), and is a long way from the state before the 2008 financial crisis. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_forward_PE_health_Care_25.09.png" /> Source: <a href="https://www.yardeni.com/">https://www.yardeni.com/</a> The combination of high growth potential and historically low valuations may benefit the performance of the Health Care Select Sector SPDR Fund (XLV). <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_XLV_dzienny_25.09.png" /> Source: Conotoxia MT5, XLV, Daily The Communication Services and Utilities sectors are also hardly overvalued. The price-to-future earnings ratio (forward P/E) is currently 16.8 for Communication Services and 16.2 for Utilities. However, like the healthcare sector, the utilities sector has much more upside potential as it is below the levels of the last three downturns. This could benefit the listing of the Communication Services Select Sector SPDR Fund (XLC). <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_forward_PE_Communication_25.09.png" /> Source: <a href="https://www.yardeni.com/">https://www.yardeni.com/</a>   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comMon, 25 Sep 2023 14:24:00 +0200Since the beginning of the year, the main US S&P 500 index has risen by more than 13%, almost reaching its historic peaks. What has driven the market in recent years and which sectors are historically considered the most undervalued?Next week to watch (25 – 29.09.)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-25-29-09https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-25-29-09Next week, the Conference Board will release its September data for the US consumer confidence index. Last month, the expectations index barely breached the 80-point mark, which generally indicates a possible recession next year. It will be interesting to see if the September data fall below the 80 mark or if August's sentiment is reversed. In addition, the US and UK will update their GDP growth estimates for the second quarter of 2023.<h3>Tuesday, 26.09. 14:00 GMT, US CB Consumer Confidence (September)</h3> The Conference Board's Consumer Confidence Index (CCI) measures consumer confidence in the economy. It is an indicator that can predict future consumer spending, a key factor in overall economic activity. Higher values indicate greater consumer optimism. The CCI is measured based on the level of confidence in 1985, which was set at 100 points. An index above 100 points indicates a higher confidence level than in 1985. Conversely, a value below 100 points means a lower confidence level than in 1985. In August, there was a notable decrease in the CB Consumer Confidence Index, which fell from 114.0 in July to 106.1 (versus the forecast 116). The Present Situation Index, reflecting how consumers view current business and job market conditions, also declined from 153.0 to 144.8 in the same period. However, the Expectations Index, which gauges consumers' short-term outlook regarding income, business, and job market conditions, dropped to 80.2 in August, reversing the significant increase observed in July when it reached 88.0. It's worth noting that expectations just barely surpassed the 80 mark, historically associated with signalling a recession within the following year. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_CB_Consumer_Confidence_22.09.png" /> Source: www.conference-board.org/ A higher-than-expected reading may have a bullish effect on the USD, while a lower-than-expected reading could be bearish for the USD. Impact: USD <h3>Thursday 28.09. 12:30 GMT, US Gross Domestic Product (GDP) QoQ (2Q update)</h3> Gross domestic product (GDP) indicates the total value of goods and services produced in a country for a certain period. GDP is an important indicator of the health of an economy because it gives an overall picture of how well or poorly it is doing. If the GDP growth is higher than expected, the economy is in good shape and growing faster than expected. On the other hand, if the GDP growth is lower than expected, the economy performs weaker than anticipated. According to the latest estimates, the US economy expanded at an annualized rate of 2.1% in Q2 2023, slightly lower than the initial estimate of 2.4%. This growth rate marked a modest improvement compared to the 2.0% expansion observed in the first quarter of the year. A downward adjustment in both private inventory investment and nonresidential fixed investment characterized the revisions in this report. However, there was a compensating upward revision in state and local government spending. Consumer spending slowed significantly, with a growth rate of 1.7% in the second quarter compared to a more robust 4.2% in the first quarter. Government consumption also exhibited a similar trend, easing to a 3.3% growth rate from 5.0% in the previous quarter. Notably, nonresidential fixed investment experienced its most substantial increase in nearly a year, surging by 6.1% as opposed to the meagre 0.6% growth in the prior quarter. On the export front, there was a significant decline, the largest since the aftermath of the COVID-19 outbreak in the second quarter of 2020. Exports fell by 10.6% in the second quarter, in sharp contrast to the 7.8% growth recorded in the first quarter. In addition, residential fixed investment continued its downward trend, falling by 3.6%, extending a slump that has lasted for nine consecutive quarters. It's also worth noting that private inventory investment had a negative impact on GDP in this period. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_US_22.09.png" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bullish effect on the USD, while a lower-than-expected reading could be bearish for the USD. Impact: USD <h3>Friday 29.09. 06:00 GMT, UK Gross Domestic Product (GDP) QoQ (2Q update)</h3> Meanwhile, the latest estimates in the UK show a slight quarter-on-quarter expansion of 0.2% in Q2 2023, surpassing earlier expectations of a flat reading and following a 0.1% growth in Q1. The services sector recorded a 0.1% growth, driven by industries such as motion picture production, video production, TV program production, computer programming, and food and beverage services. This boost was attributed to favourable weather conditions and an uptick in live events. Additionally, the production sector witnessed a notable increase of 0.7%, with manufacturing growing by 1.6%, primarily led by manufacturing motor vehicles, trailers, and semi-trailers. Construction also experienced growth of 0.3%, while the mining sector contracted by 4.3%, mainly due to declines in crude petroleum and natural gas extraction. On the expenditure side, household consumption exhibited robust growth, rising by 0.7%. This growth was particularly pronounced in sectors like transport, recreation, culture, restaurants, hotels, and gas. Government consumption saw a significant surge of 3.1%. In contrast, there was no growth in gross fixed capital formation, as a 3.4% increase in business investment was offset by a 6.7% decline in government investment. Exports also fell by 2.5%, while imports rose by 1%. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_UK_22.09.png" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bullish effect on the GBP, while a lower-than-expected reading could be bearish for the GBP. Impact: GBP <h3>Friday 29.09. 09:00 GMT, Eurozone Consumer Price Index (CPI) YoY (September preliminary)</h3> The CPI index measures changes in the prices of consumer goods and services. It covers different types of products, such as food, fuel, transportation services, cosmetics, household goods, clothing, and many others. The purpose of the CPI index is to measure the increase or decrease in the cost of living for consumers. As the CPI index rises, consumers' purchasing costs increase, affecting their money's purchasing power. The CPI index is used to monitor inflation or the overall rise in prices in the economy. It allows us to assess whether prices are rising too fast or too slowly and to determine what economic policy measures should be taken to offset the adverse effects of inflation. In August 2023, the annual inflation rate within the eurozone was adjusted downward to 5.2%, revising it from the initial estimate of 5.3%. This marks the lowest level recorded since January 2022. In comparison, a year earlier, inflation stood significantly higher at 9.1%. However, it remains more than twice the European Central Bank's (ECB) target of 2%. During August, the most notable contributors to upward price pressure were the costs of services, which increased by 5.5% (a slight decrease from July's 5.6%), followed by food, alcohol, and tobacco, which rose by 9.7% (down from 10.8%). Non-energy industrial goods also experienced inflation at a rate of 4.7%, down from 5% in the previous month. Although energy prices continued to decrease, the rate of decline slowed to -3.3% from the previous -6.1%. On a monthly basis, the consumer price index (CPI) rose by 0.5%, slightly below the 0.6% initially estimated. Notably, the ECB recently raised its inflation forecasts for 2023 (to 5.6%) and 2024 (to 3.2%). This upward revision is mainly due to a more pronounced increase in energy prices. For 2025, the central bank expects inflation to average around 2.1%. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_CPI_EU_22.09.png" /> Source: Tradingeconomics.com If the reading is higher than expected, inflation is higher, possibly favouring a fall in the EUR. Meanwhile, it is also a stimulus for the ECB to raise interest rates and reduce the money supply, causing an increase in the EUR. If the reading is lower than expected, it may give the ECB an argument to stop its policy of raising interest rates. Impact: EUR, STOXX, DAX and other indices <h3>Stocks to watch</h3> Costco (COST) announcing its earnings results for the quarter ending on 08/2023. Forecast EPS: 4.79. Positive earnings surprise in 5 out of the last 10 reports. Time: Tuesday, September 26, after the market closes.   Micron (MU) announcing its earnings results for the quarter ending on 08/2023. Forecast EPS: -1.18. Positive earnings surprise in 8 out of the last 10 reports. Time: Wednesday, September 27, after the market closes.  Accenture (ACN) announcing its earnings results for the quarter ending on 08/2023. Forecast EPS: 2.66. Positive earnings surprise in 9 out of the last 10 reports. Time: Thursday, September 28, before the market opens.  Nike (NKE) announcing its earnings results for the quarter ending on 08/2023. Forecast EPS: 0.7489. Positive earnings surprise in 9 out of the last 10 reports. Time: Thursday, September 28, after the market closes.  Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73,02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 22 Sep 2023 09:59:00 +0200Next week, the Conference Board will release its September data for the US consumer confidence index. Last month, the expectations index barely breached the 80-point mark, which generally indicates a possible recession next year. It will be interesting ...NVIDIA Corporation – still a viable investment? https://invest.conotoxia.com/investment-research/research-articles/nvidia-corporation-still-a-viable-investmenthttps://invest.conotoxia.com/investment-research/research-articles/nvidia-corporation-still-a-viable-investmentNVIDIA Corporation has emerged as a global leader in the field of graphics processing units and artificial intelligence technology. The company's products and services are utilised across various industries, including gaming, data centres, automotive, and healthcare. Thanks to the emergence of AI, NVIDIA stock has skyrocketed over 300% in less than a year, and now it trades around 450 USD. In this article, we briefly discuss NVIDIA and its key to success that has brought it into the AI spotlight and evaluate its stock from a technical and fundamental perspective to conclude whether NVIDIA may still be a viable investment. <h3>NVIDIA Background</h3> NVIDIA has a long-standing reputation for innovation in GPU technology. The company continuously develops cutting-edge hardware and software solutions, maintaining a competitive edge in the market. This innovation has led to the development of GPUs that excel not only in gaming but also in high-performance computing and AI applications. The company's strategic diversification into data centres, automotive, and professional visualisation has reduced its reliance on the volatile gaming market. This diversification has contributed to consistent revenue growth and financial stability. The rapid expansion of AI applications, particularly in data centres, has created a significant growth opportunity for NVIDIA. As AI becomes more integrated across industries, NVIDIA's AI-focused hardware and software solutions are in high demand. For example, NVIDIA's expertise in AI and autonomous driving technology positions the company well to capitalise on the growing market for autonomous vehicles. Partnerships with automotive manufacturers and advancements in autonomous vehicle platforms may drive future revenue growth. Furthermore, the trend towards edge computing, where processing occurs closer to the data source, creates opportunities for NVIDIA to provide GPUs for real-time AI processing at the edge, benefiting industries such as IoT and telecommunications. Some of the negative aspects to consider: <ul> <li style="font-weight: 400;" aria-level="1">NVIDIA relies heavily on Original Equipment Manufacturers (OEMs) to integrate its graphics processing units (GPUs) into various devices, including laptops and desktops. This dependence exposes the company to supply chain disruptions and fluctuations in demand.</li> <li style="font-weight: 400;" aria-level="1">The technology industry is highly competitive, and NVIDIA faces competition from both traditional rivals like AMD and emerging players in AI and GPU markets. This competition may erode its market share and pricing power over time.</li> <li style="font-weight: 400;" aria-level="1">The global regulatory landscape regarding technology and AI is evolving rapidly. NVIDIA may face regulatory challenges related to antitrust concerns, data privacy, and national security, potentially impacting its operations and partnerships.</li> <li style="font-weight: 400;" aria-level="1">NVIDIA's reliance on gaming and data centre segments makes it vulnerable to market cyclicity. Economic downturns or shifts in consumer behaviour could affect demand for its products.</li> </ul> <h3>The most recent quarter led by the AI</h3> Due to the persistent buzz surrounding artificial intelligence, expectations were set high for NVIDIA's most recent quarter earnings results. And the company lived up to expectations. The company exhibited significant sales growth, which was not unexpected, considering the guidance provided during the prior earnings release already hinted at a substantial sales surge. In fact, NVIDIA delivered remarkable revenue growth of over 100% compared to the same quarter in the previous year. However, it's worth noting that the preceding year's quarter was not particularly strong. Even if we compare the most recent quarter's performance with the best quarter until now (1Q 2023), the company still achieved a remarkable revenue growth rate of 63%. The sequential revenue growth was equally impressive, standing at almost 90%. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres-EPS_21.09.png" width="921" height="431" /> Source: Seekingalpha.com Unsurprisingly, the lion's share of this revenue surge has been driven by investment in AI. The rise of AI technologies, spurred partly by the prominence of models like ChatGPT, has attracted considerable attention, with various companies eager to harness AI's potential. Many of these enterprises are channelling resources into data centres and the development of their own AI models and tools, spanning diverse sectors such as large language models and autonomous driving technology. These AI programs and algorithms require significant computing power, and NVIDIA chips have emerged as the preferred choice for handling these demanding tasks.  Although NVIDIA faces competition in this area, its dominance in AI has significantly boosted its revenue performance, which had been sluggish in previous quarters due to factors such as a slowdown in consumer spending, which negatively impacted NVIDIA's gaming GPU business. However, the explosive growth in the AI sector has more than compensated for these headwinds, with data centre revenue surging by an astounding 171% year-over-year. This robust performance effectively offset the weaker results seen in other segments, such as Professional Visualization, where revenues declined by over 20% compared to the previous year. While not every facet of NVIDIA's operations is thriving, the exceptional performance of its flagship business segment has elevated the company's overall results to an impressive level. Furthermore, NVIDIA not only achieved substantial revenue growth but also managed to enhance its profit margins. While the expansion of operating margins was almost a certainty due to the anticipated revenue growth, NVIDIA also witnessed robust growth in its gross margins. It appears that customers may be so eager to acquire AI hardware that they are willing to pay premium prices. This surge in demand propelled NVIDIA's adjusted gross margin from 46% to 71% over the past year. Such a margin expansion is rare and underscores NVIDIA's formidable position in the AI hardware sector at present. NVIDIA would likely not achieve these remarkable margins if the market had more competitors or if demand were not as strong. However, at least for now, NVIDIA is enjoying profitable growth.  <h3>Is NVIDIA still a buy?</h3> Thanks to the recent boost in the AI field and supported by the exceptionally good earnings results announced by NVIDIA for the most recent quarter, its stock has surged over 321% since its recent low of 108.06 USD per share on October 13, 2022, until the moment of writing this article. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_NVIDIA_21.09.png" /> Source: Tradingview.com Despite the announcement of spectacular quarterly results, NVIDIA stock did not move as much as one might have expected. After announcing the results after market hours on August 23, 2023, the stock started trading on August 24 at an all-time high of 502.12 USD. However, the hype did not last long, and the stock finished the day trading at 471.59 USD. Since then, NVIDIA stock has not climbed over the 500 USD level.  Round numbers are known to provide resistance to stocks. However, it may be worth considering the possibility that the recent run-up in NVIDIA's stock price has already priced in most of the company's earnings growth potential for the foreseeable future. If so, NVIDIA stock may return to more sustainable valuation levels as the AI hype subsides.  <h3>Financial analysis</h3> NVIDIA has undeniably improved its earnings numbers; therefore, some stock price increase is justified and welcome. However, let us review its past, current, and forecasted financial data to evaluate the viability of the current stock price.  Many have questioned NVIDIA's extremely high P/E and other valuation indicators for NVIDIA. Its current stock price stands over 100 versus the industry average of 25.09 and its own historical average of 74.87. However, if we take a look at the forward P/E ratio, it drops to 47.02, which is still almost twice as high as the industry average but considerably lower than the NVIDIA historical average. EV/EBITDA presents a similar picture: current value (89.73) drops more than twice when evaluated using forward data (39.71), which is still above the industry average (15.12) but drops below NVIDIA's historical average (57.64).  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/tabela_wska%C5%BAniki_ENG_21.09.png" width="920" height="147" /> Source: Seekingalpha.com Now, the Price-to-sales (P/S) ratio looks slightly different. Firstly, the current P/S (34.19) is almost twice as large as NVIDIA's historical average (18.98), and its forward ratio is the only reviewed valuation ratio that exceeds the historical one. When compared to the industry average (2.66), the forward P/S ratio (20.63) is nearly 8 times higher, while other reviewed valuation indicators are no more than 3 times the respective industry average.  This may be related to NVIDIA's considerably improved margins over the recent quarter. In addition to the already mentioned gross margins, the EBITDA margin currently stands at 37.88% versus an industry average of 9.15%, and the net income margin stands at 31.60% versus an industry average of 2.03%. Net income margin has increased from 26.03% a year ago and from 18.52% in the previous quarter. However, we may find even higher margins looking back to NVIDIA's historical data. For example, in the twelve months ending on 31/01/2022, NVIDIA's net income margin reached an all-time high of 36.23%.  And just as a reminder, we have just discussed TTM (twelve-trailing-months) margins, not forward or strictly last quarter's data. This means that, as NVIDIA moves further away from its relatively slower 12 months between April 2022 and March 2023, its margins may grow even further, assuming NVIDIA is able to deliver on its forecast earnings growth. <h3>What is expected in the near future? </h3> NVIDIA expects to reach a 16 billion turnover in the Q3 of its fiscal year of 2024 (quarter ending on 31/10/2023), delivering an 18% increase from the previous quarter and a whopping 169% increase from the respective quarter one year ago. Its forecast EPS currently stands at 3.28, a 32% increase from the previous quarter and 11.14 times bigger than the respective quarter one year ago. Furthermore, NVIDIA is known to be conservative with its forecasts and prefers upward revisions or positive surprises at the time of earnings release. The most recent earnings report delivered a 30% earnings beat and a 21% revenue beat. However, investors cannot rely on past results to expect similar results in the future. <h3>Conclusion</h3> Technically, the stock looks overvalued and is now experiencing a pullback and trading around 450 USD per share, which may provide an advantageous moment for accumulating the stock. Fundamentally, valuation ratios, especially the Price-to-Sales ratio, indicate overvaluation using current (TTM) data. However, looking at the same valuation ratios using forward data, the current stock price seems less extreme. Indeed, forward data are only estimates and may differ significantly from the actual data. Still, NVIDIA has proved that it can deliver even better-than-expected results thanks to the wave of artificial intelligence.  As long as NVIDIA manages to keep its close-to-monopoly position in the AI revolution, it may be expected to reap most of the benefits, including skyrocketing earnings. To sustain and expand its market dominance, NVIDIA must remain agile in a competitive landscape and continue to drive innovation in the ever-evolving technology industry.   Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73,02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comThu, 21 Sep 2023 10:53:00 +0200NVIDIA Corporation has emerged as a global leader in the field of graphics processing units (GPUs) and artificial intelligence (AI) technology. The company's products and services are utilised across various industries, including gaming, data centres, a...Rising cost of loans: the American dream or a repeat of the 2008 crisis?https://invest.conotoxia.com/investment-research/comments/rising-cost-of-loans-the-american-dream-or-a-repeat-of-the-2008-crisishttps://invest.conotoxia.com/investment-research/comments/rising-cost-of-loans-the-american-dream-or-a-repeat-of-the-2008-crisisCentral bank interest rate rises are always associated with an increase in the cost of debt, which has led to yields on 10-year government bonds rising from 0.5% to 4.4%. This is, after all, the main objective of this monetary policy tool, to cool the economy . However, let us take a closer look at the debt situation of consumers and companies to answer the question: are we facing a repeat of the 2008 crisis and how might the current situation affect financial markets?<h3>Situation in the banking sector</h3> To start with some worrying data, the level of commercial bank lending to the central bank (the Fed), which in March this year exceeded half of that of the 2008 banking crisis. Such loans are made when banks (as depository institutions) are having trouble paying out deposits, due to the so-called fractional reserve system by which banks are not required to hold all of their customers' money. Currently, the mandatory deposit level in the United States is 5.4%. The loan support was linked to the problems of the banking sector at the beginning of the year, but the sheer scale of the support may be surprising. Indeed, it was 6 times larger than that during the pandemic crisis. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_borrowings_from_Fed_20.09.png" /> Source: Fred We could issue a second yellow card in the context of the decline in asset levels in the banking sector. This decline is mainly due to a reduction in lending activity, meaning that banks are finding it harder to make new loans, partly because of the current economic uncertainty. A similar situation occurred during the 2008 crisis. However, it is important to emphasise that this happened in combination with a high percentage of outstanding loans (over 30 days). Today, it remains at historically low levels, at just 1.22%, compared to 7.5% at the height of the financial crisis. Of course, these figures are aggregate, so let's look at them in more detail for more information. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_ca%C5%82kowite%20zad%C5%82u%C5%BCenie_20.09.png" /> Source: Fred <h3>Rising cost of consumer credit</h3> If we look at lending rates by type of loan, we can immediately see a departure from the norm. Particularly pronounced seems to be the sharp increase in interest rates on credit cards (Commercial Bank Interest on Credit Cards Plans) to 20.6%, compared to 13.3% during the financial crisis in 2008. The high lending rates cannot be clearly explained by the difference in interest rate levels, as the interest rate levels of 2008 were practically no different from today. This situation may appear to be particularly worrying and the consequence may be a fall in real household incomes and a decrease in demand for new debt, resulting in lower consumer spending. This could have a negative effect on sales in the consumer goods sector in the medium term, and would also negatively affect the listing of the Consumer Discretionary Select Sector SPDR Fund (XLY). <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_oprocentowanie_zad%C5%82u%C5%BCenia_20.09.png" /> Source: Fred <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_XLY_dzienny_20.09.png" /> Source: Conotoxia MT5, XLY, Daliy If we look at the level of household indebtedness relative to the previous crisis, we see that the level of indebtedness through consumer credit liabilities and car credit has increased particularly strongly. Despite an increase in interest rates for all types of credit, we do not see a decrease concerning their demand, which should translate into a decrease in disposable income in the future. However, we can note that the total level of debt relative to income has now fallen from 120%. - during the crisis in 2008 to 89%. - now, which means that consumers are less indebted now than they were during the crisis. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_zmiana_zad%C5%82u%C5%BCenia_prywatnego_20.09.png" /> Source: Fred We often hear about declining household savings as a potential trigger for the crisis. Indeed, at present, if we look at household savings levels, we see a decline after the sharp increase in 2020 that resulted from government welfare programmes. The level has fallen from 25% to the current 4.5%. Even though we are currently at similar levels, debt servicing expenses do not seem to be as burdensome as they were in the past. It is worth understanding that the majority of mortgages are at a fixed rate for the life of the loan. This means that only those loans taken out now will materially affect available income in the future. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_zad%C5%82u%C5%BCenie_do_dochod%C3%B3w_20.09.png" /> Source: Fred <h3>What lies ahead?</h3> According to the CME FedWatch tool, which measures the market's valuation of the probability of interest rate changes by the Fed, we will learn that the market is now largely assuming a halt to the interest rate hike cycle and the first cuts next June. Which assets are likely to be most affected by this period? <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/tabela_fedwatch_20.09.png" width="921" height="500" /> Source: <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html">https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html</a> The first asset, which is itself a type of given debt, is bonds. In the absence of a change or drop in interest rates, we have historically seen bond funds rise in the market, currently trading at 12-year lows. An example of such a fund would be the iShares 20 Plus Year Treasury Bond ETF (TLT). <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_TLT_tygodniowy_20.09.png" /> Source: Contoxia MT5, TLT, Daily When interest rates fall, profit margins in the financial sector tend to fall. The main way for banks to make money is through interest on borrowed money. When a bank lends money at a low interest rate (caused by a fall in interest rates), this results in a fall in the institution's profit, which could negatively affect the Financial Select Sector SPDR Fund (XLF) listing.   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comWed, 20 Sep 2023 15:05:00 +0200Central bank interest rate rises are always associated with an increase in the cost of debt, which has led to yields on 10-year government bonds rising from 0.5% to 4.4%. This is, after all, the main objective of this monetary policy tool, to cool the e...Crude oil trading: What do the inventory level readings tell us?https://invest.conotoxia.com/investment-research/comments/crude-oil-trading-what-do-the-inventory-level-readings-tell-ushttps://invest.conotoxia.com/investment-research/comments/crude-oil-trading-what-do-the-inventory-level-readings-tell-usCrude oil has risen by as much as 33% from its June lows. When analysing this market, we often come across readings made available by the EIA of changes in US crude inventories. The prevalence of the use of this economic indicator raises the question of its impact on oil prices.<h3>What does the reading on changes in oil stocks tell us?</h3> Total stocks of crude oil and petroleum products excluding strategic stocks (so-called SPR) is a term that refers to the total amount of crude oil and petroleum products in storage in the United States. The main components of this indicator include: <ul> <li style="font-weight: 400;" aria-level="1">The amount of crude oil available in storage and reservoirs that is not part of the strategic reserve (SPR). The reserve is a strategic petroleum resource maintained by the US government to respond to sudden disruptions in energy supply.</li> <li style="font-weight: 400;" aria-level="1">In addition to crude oil, this indicator also takes into account the amount of various petroleum products such as gasoline, heating oil, diesel, liquefied natural gas (LNG) that are available in storage.</li> </ul> This reading is published every Wednesday and, at first glance, appears to affect crude oil prices, particularly Texas Intermediate WTI. It may appear that an increase in inventories means that there is excess supply on the market, which could lead to lower oil prices. Such surpluses must be kept in storage. Conversely, a fall in inventories may suggest a shortage, which usually results in higher oil prices, but is this really the case? <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/zapasy_ropy_naftowej_19.09.png" /> Source: <a href="https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCESTUS1&f=W">https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCESTUS1&f=W</a> <h3>Do changes in oil stocks really say anything about the situation in this market?</h3> It turns out that when we examine the correlation between the period of change to next week and the latest reading of the change in oil stocks, we get a correlation of -0.1. We can consider this result to be the result of pure statistical error. Perhaps it is the stock reading that is more dependent on the oil price change than vice versa? However, in this case too, we are not able to conclude any significant correlation, as the correlation is only -0.03. Deeper analysis allows us to see that the highest correlation is for the change 5 days after the publication of the results, with a correlation of -0.19. Such a situation is what the famous financial statistician Nassim Taleb calls 'fooled by randomness'. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_XTIUSD_dzienny_19.09.png" /> Source: Conotoxia MT5, XTIUSD, Daily <h3>Are the readings influencing increased volatility?</h3> If we analyse volatility in order to answer the question of whether it creates opportunities for speculators, it is worth noting that volatility, measured as the average daily deviation from the average result (i.e. the standard deviation) shows significantly more volatility at the beginning of the week than after Wednesday, when the data are published (see table below). After the publication of the data, the oil market usually tends to calm down, meaning that we do not see a significant increase in volatility on the day the data are published. We can therefore conclude that, in the case of oil prices, these data are more of a curiosity for investors than a factor that determines decisions to buy or sell this commodity. Understanding the data and the various market indicators is crucial in the investment process. Therefore, we should not allow ourselves to be misled by headlines or a lack of understanding of the data. Understanding which information is relevant in the information noise is particularly important in accurately interpreting what is happening in the market. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/tabela_zmienno%C5%9Bci_ENG_19.09.png" width="450" height="418" /> Source: Conotoxia own analysis Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comTue, 19 Sep 2023 12:54:00 +0200Crude oil has risen by as much as 33% from its June lows. When analysing this market, we often come across readings made available by the EIA of changes in US crude inventories. The prevalence of the use of this economic indicator raises the question of...Next week to watch (18 – 22.09.)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-18-22-09https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-18-22-09As the ECB resumed its meetings to discuss interest rates this week after taking a break in August, next week, it will be followed by the US Federal Reserve and Bank of England. Before that, however, the UK will present its latest inflation data, which could influence the decision to be taken at the BoE's rate meeting. The current consensus is for the BoE to raise rates by 25 basis points, while the Fed is expected to hold rates steady.<h3>Tuesday 19.09. 09:00 GMT, Euro Area Consumer Price Index (CPI) YoY (August)</h3> The CPI index measures changes in the prices of consumer goods and services. It covers different types of products, such as food, fuel, transportation services, cosmetics, household goods, clothing, and many others. The purpose of the CPI index is to measure the increase or decrease in the cost of living for consumers. As the CPI index rises, consumers' purchasing costs increase, affecting their money's purchasing power. The CPI index is used to monitor inflation or the overall rise in prices in the economy. It allows us to assess whether prices are rising too fast or too slowly and to determine what economic policy measures should be taken to offset the adverse effects of inflation. According to the preliminary data for August, the annual inflation rate in the eurozone remained unchanged from July at 5.3%, surpassing the European Central Bank's target by more than 2.5 times and exceeding the market consensus of 5.1%. Notably, the rate of decline in energy prices slowed to -3.3%, compared to July's -6.1%. Inflation rates decelerated in various other categories, including food, alcohol, and tobacco, dropping to 9.8% from 10.8%. Additionally, non-energy industrial goods saw a decline in inflation from 5.0% to 4.8%, and services also exhibited a slight dip from 5.6% to 5.5%. On a monthly basis, consumer prices experienced a 0.6% increase in August, as per initial estimates. This reading exceeded the consensus of 0.4% and was considerably higher than the previous month's -0.1%. Meanwhile, the core inflation rate, an essential indicator that filters out the volatile influence of food and energy prices, followed the anticipated cooling trend, declining to 5.3% from July's 5.5%. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/Obraz11.png" alt="" /> Source: Tradingeconomics.com If the reading is higher than expected, inflation is higher, possibly favouring a fall in the EUR. Meanwhile, it is also a stimulus for the ECB to raise interest rates and reduce the money supply, causing an increase in the EUR. If the reading is lower than expected, it may give the ECB an argument to stop its policy of raising interest rates. Impact: EUR, STOXX, DAX and other indices <h3>Wednesday 20.09. 06:00 GMT, UK Consumer Price Index (CPI) YoY (August)</h3> In July 2023, consumer price inflation in the United Kingdom experienced a decrease, falling to 6.8% from 7.9% in June. This reduction brought the inflation rate to its lowest point since February 2022, aligning with market expectations. The primary driver of this decline was a significant decrease in fuel prices. Furthermore, the core inflation rate, which excludes volatile components like energy and food, remained steady at 6.9%, the same as June's reading. However, it is still above the Bank of England's target of 2.0%, allowing the central bank to maintain its ongoing tightening policy. Transportation prices continued to decrease (-2.1% compared to -1.8% in June), primarily due to a substantial 24.9% drop in fuel and lubricant costs. Additional downward pressure on inflation was observed in categories such as food and non-alcoholic beverages (14.8% vs 17.3%), furniture and household goods (6.2% vs 6.5%), recreation and culture (6.5% vs 6.7%), and miscellaneous goods and services (6.0% vs 6.5%). On a monthly basis, consumer prices decreased by 0.4%, marking the first decline since January. This result was slightly above the market consensus, which had predicted a 0.5% decrease, and followed a 0.1% increase in June. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/Obraz22.png" alt="" /> Source: Tradingeconomics.com If the reading is higher than expected, inflation is higher, which may favour a fall in the GBP. Meanwhile, it is also a stimulus for the BoE to raise interest rates and reduce the money supply, causing an increase in the GBP. If the reading is lower than expected, it may give the BoE an argument to stop its policy of raising interest rates. Impact: GBP, FTSE 100, and other indices <h3>Wednesday, 20.09. 18:00 GMT, US Interest Rate Decision</h3> Federal Open Market Committee (FOMC) members vote on whether to raise, decrease, or leave interest rates unchanged. These decisions affect the currency's value, and interest rate policy is among the key instruments to regulate inflation. Investors closely follow central banks' decisions and changes in the level of interest rates, as this information can be crucial to their trading strategies. The currency value tends to rise when interest rates are high, as they attract investors seeking higher returns on their deposits. Conversely, when interest rates are low, the currency's value tends to fall as investors look for other places to invest their money. During his address at the Jackson Hole Symposium on 24-26 August 2023, Federal Reserve Chair Jerome Powell highlighted the potential need for the US Federal Reserve to implement further interest rate increases to effectively manage inflation. He emphasised that policymakers are carefully monitoring signs of declining inflation alongside the economy's strong performance and the labour market. Simultaneously, Powell indicated that the Fed could opt to maintain interest rates at their current levels during the upcoming meeting in September. This decision would be contingent on officials' assessment of incoming data and the evolving economic outlook and associated risks. Powell also reiterated the central bank's commitment to maintaining a monetary policy stance that is appropriately stringent to guide inflation toward the targeted 2 percent. He emphasised that policymakers are exercising caution in deciding whether to continue the tightening process, or to keep the policy rate stable while awaiting further data. In July 2023, the Fed Funds rate was increased by 25 basis points to a target rate of 5.25% – 5.50%. According to the CME FedWatch tool, there is a 93% chance that the interest rates would be left unchanged in the September meeting. It is in line with the Trading Economics forecasts of a 5.50% interest rate by the end of this quarter. In the longer term, the US Fed Funds Rate may be expected to trend around 4.75% in 2024 and 3.75% in 2025. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/Obraz33.png" alt="" /> Source: Tradingeconomics.com A higher-than-expected rate may be positive for the USD and negative for the stock market, while a lower-than-expected rate may be negative for the USD and positive for the stock market. Impact: USD, S&P500, and other indices <h3>Thursday, 21.09. 11:00 GMT, UK Interest Rate Decision</h3> During its August 2023 meeting, the Bank of England decided to raise its policy interest rate by 25 basis points, reaching a level of 5.25%. This move marked the 14th consecutive interest rate increase, pushing borrowing costs to their highest since 2008. The central bank's primary aim is to combat the persistent issue of high inflation. The decision received a 6-3 majority vote from the Monetary Policy Committee, with two members advocating for a consecutive 50 basis points increase and one member in favour of keeping rates unchanged. Policymakers acknowledged that the substantial rise in interest rates throughout the tightening cycle has created a restrictive monetary policy environment. However, they also emphasised their commitment to maintaining a sufficiently restrictive Bank Rate for an extended period, intending to achieve sustainable inflation return to the 2% target in the medium term. Additionally, the central bank anticipates a substantial decrease in inflation to around 5% by the end of the year, a faster decline than initially projected in May, with the aim of reaching the 2% target by the second quarter of 2025. A 25-basis point increase may be expected in the upcoming BoE meeting, raising the key interest rate to a 4.50% level, which, according to Trading Economics forecasts, is also the expected level in 2024 before falling to 3.25% in 2025. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/Obraz44.png" alt="" /> Source: Tradingeconomics.com A higher-than-expected rate may be positive for the GBP and negative for the stock market, while a lower-than-expected rate may be negative for the GBP and positive for the stock market. Impact: GBP, FTSE 100 and other indices <h3>Stocks to watch</h3> FedEx (FDX) announcing its earnings results for the quarter ending on 08/2023. Forecast EPS: 3.7. Positive earnings surprise in 5 out of the last 10 reports. Time: Wednesday, September 20, after the market closes. General Mills (GIS) announcing its earnings results for the quarter ending on 08/2023. Forecast EPS: 1.09. Positive earnings surprise in 8 out of the last 10 reports. Time: Wednesday, September 20, before the market opens. FactSet Research (FDS) announcing its earnings results for the quarter ending on 08/2023. Forecast EPS: 3.5. Positive earnings surprise in 7 out of the last 10 reports. Time: Thursday, September 21, before the market opens. Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73,02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 15 Sep 2023 12:37:00 +0200As the ECB resumed its meetings to discuss interest rates this week after taking a break in August, next week, it will be followed by the US Federal Reserve and Bank of England. Before that, however, the UK will present its latest inflation data, which ...Next week to watch (11 – 15.09.)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-11-15-09https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-11-15-09Next week, ECB Executive Board members and 16 governors of the eurozone central banks will come together after a break in August to decide whether to raise interest rates further. While most corporations have announced their earnings results for quarters ending in June and July, we may see the first corporate reports for quarters ending in August, such as Oracle and Adobe. <h3>Tuesday, 12.09. 09:00 GMT, Eurozone ZEW Economic Sentiment (September)</h3> The ZEW Indicator of Economic Sentiment is a leading indicator providing insight into the relative economic outlook for the eurozone in the following six-month period. It is created based on interviewing 350 institutional investors and other experts from banks and other sectors about their expectations concerning the interest rates, inflation rates, exchange rates, stock markets, and other measures, such as the development of the business cycle of key world economies in order to develop a sentiment for the eurozone's economy for the next six months. The ZEW Indicator of Economic Sentiment is calculated by comparing the number of experts with positive versus negative sentiment. For example, if 30% hold positive sentiment, 20% have neutral sentiment, and 50% hold negative sentiment, the ZEW indicator would result in -20%. Last month, the ZEW Indicator of Economic Sentiment for the eurozone displayed a notable improvement, reaching a value of -5.5, surpassing the expected value of -12. This marked the highest level observed in the past four months, indicating a positive shift from the previous month's reading of -12.2. Among the analysts surveyed during this period, 57.5% anticipated that economic activity would remain stable, while 18.5% expressed concerns about a potential deterioration, and 24% were optimistic about an improvement in economic conditions. Additionally, during the same period, the indicator assessing the current economic situation increased by 2.4 points, reaching a value of -42. Simultaneously, expectations regarding inflation also saw a 2.4-point uptick, bringing them to a level of -76.7. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres1.jpg" alt="" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bullish effect on the EUR, while a lower-than-expected reading could be bearish for the EUR. Impact: EUR <h3>Wednesday 13.09. 12:30 GMT, US Consumer Price Index (CPI) YoY (August)</h3> The CPI index measures changes in the prices of consumer goods and services. It covers different types of products, such as food, fuel, transportation services, cosmetics, household goods, clothing, and many others. The purpose of the CPI index is to measure the increase or decrease in the cost of living for consumers. As the CPI index rises, consumers' purchasing costs increase, affecting their money's purchasing power. The CPI index is used to monitor inflation or the overall rise in prices in the economy. It allows us to assess whether prices are rising too fast or too slowly and to determine what economic policy measures should be taken to offset the adverse effects of inflation. In July, the annual inflation rate in the United States accelerated to 3.2%, up from the 3% recorded in June. However, this figure fell slightly short of the anticipated 3.3%, marking a pause in the 12 consecutive months of declining inflation rates. This reversal could be attributed to base effects, as a year prior, inflation had started to recede from its peak of 9.1%. During July 2023, energy costs experienced a decrease of 12.5%, although this decline was less pronounced compared to the 16.7% drop seen in June. The moderation in energy cost declines was notable in categories such as fuel oil (-26.5% vs -36.6%), gasoline (-19.9% vs -26.5%), and utility gas services (-13.7% vs -18.6%). Conversely, certain expenses saw an increase, such as the cost of apparel (3.2% vs 3.1%) and transportation services (9% vs 8.2%). However, electricity prices noted a more modest rise of 3%, down from the 5.4% increase seen in June. Inflation also decelerated for food (4.9% vs 5.7%), shelter (7.7% vs 7.8%), and new vehicles (3.5% vs 4.1%). Additionally, the cost of medical services saw a 1.5% decrease (vs -0.8%), and prices of used cars and trucks declined by 5.6% (vs -5.2%). Meanwhile, core inflation, which excludes food and energy, eased slightly to 4.7% in July from the 4.8% recorded in June, falling below the expected 4.8%. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres2.jpg" alt="" /> Source: Tradingeconomics.com On the one hand, if the reading is higher than expected, inflation is higher, which may favour a fall in the USD. Meanwhile, it is also a stimulus for the Fed to raise interest rates and reduce the money supply, causing an increase in the USD. On the other hand, if the reading is lower than expected, it may give the Fed an argument to stop its policy of raising interest rates. Impact: USD, S&P500 and other indices <h3>Thursday, 14.09. 12:15 GMT, Eurozone Interest Rate Decision</h3> European Central Bank (ECB) Executive Board members and 16 governors of the eurozone central banks vote on whether to raise, decrease, or leave interest rates unchanged. These decisions affect the currency's value, and interest rate policy is among the key instruments to regulate inflation. Investors closely follow central banks' decisions and changes in the level of interest rates, as this information can be crucial to their trading strategies. The value of a currency tends to rise when interest rates are high, as they attract investors seeking higher returns on their deposits. Conversely, when interest rates are low, the currency's value tends to fall as investors look for other places to invest their money. According to the latest European Central Bank (ECB) meeting minutes, policymakers kept open the possibility of raising interest rates in September when they implemented an interest rate hike in July. However, some members of the ECB seemed to suggest that such a move might no longer be necessary once new economic projections are made available. Over more than a year, the ECB has raised rates incrementally from -0.5% to 4.25% to counteract a surge in inflation. Nevertheless, there is a growing consensus in favour of pausing this tightening cycle, driven by the belief that the cumulative impact of these rate hikes may be sufficient to dampen underlying inflationary pressures. According to long-term projections, interest rates should reach 4.25% by the end of this quarter and diminish to 3.75% in 2024. Based on these projections, it may be plausible that the ECB votes on leaving the interest rates unchained in the September meeting, as this projection has already been met. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres3.jpg" alt="" /> Source: Tradingeconomics.com A higher-than-expected rate may be positive for the EUR and negative for the stock market, while a lower-than-expected rate may be negative for the EUR and positive for the stock market. Impact: EUR, DAX, STOXX Europe indices <h3>Stocks to watch</h3> Dollarama (DOL) announcing its earnings results for the quarter ending on 07/2023. Forecasted EPS: 0.7705. Positive earnings surprise in 7 out of the last 10 reports. Time: Wednesday, September 13, before the market opens. Oracle (ORCL) announcing its earnings results for the quarter ending on 08/2023. Forecasted EPS: 1.15. Positive earnings surprise in 8 out of the last 10 reports. Time: Thursday, September 14. Adobe (ADBE) announcing its earnings results for the quarter ending on 08/2023. Forecasted EPS: 3.97. Positive earnings surprise in 9 out of the last 10 reports. Time: Thursday, September 14, after the market closes.   Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73,02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.  forex conotoxia.comFri, 08 Sep 2023 09:52:00 +0200Next week, ECB Executive Board members and 16 governors of the eurozone central banks will come together after a break in August to decide whether to raise interest rates further. While most corporations have announced their earnings results for quarter...Performance of retail companies: positive surprise in the second quarterhttps://invest.conotoxia.com/investment-research/comments/performance-of-retail-companies-positive-surprise-in-the-second-quarterhttps://invest.conotoxia.com/investment-research/comments/performance-of-retail-companies-positive-surprise-in-the-second-quarterThe financial results of retail companies for the second quarter of 2023 came as a very positive surprise compared to previous readings. The percentage of companies that made a net profit increased - from 61% to 69%. Similarly, the percentage of companies that made a profit rose from 69% to 78%. Among other things, this is a clear indication of improving US consumer sentiment. This data is confirmed by the latest reading of the Consumer Confidence Index , which reached its highest level since mid-2021. So let's consider which companies have been the biggest winners, and what can we expect going forward?<h3>Consumer Confidence Index (CCI)</h3> The US Consumer Confidence Index (CCI), or the US Consumer Index, is an economic indicator that measures consumer confidence in the context of the current and future economic situation in the US. It is an important indicator because it can provide clues about future consumption trends, which in turn can influence the behaviour of financial markets. The index is compiled from a survey in which consumers answer questions about their current financial situation, future prospects and the general state of the economy. The CCI score is calculated from consumers' responses and can be positive or negative. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_CCI_05.09.png" /> Source: <a href="https://www.conference-board.org/topics/consumer-confidence">https://www.conference-board.org/topics/consumer-confidence</a> It appears that, despite a drop in the index from 114 in July to 106.1 in August this year, the index as a whole remains at high levels, more comparable to periods of economic growth than to the recession we see in some European economies, among others, where the OECD Consumer Confidence Index has fluctuated at multi-year lows since the beginning of the year. This means that US consumers seem to still be confident, which could positively impact the quotations of the Consumer Discretionary Select Sector SPDR fund (XLY) <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_XLY_dzienny_05.09.png" /> Source: Conotoxia MT5, XLY, Daily <h3>These companies surprised most positively with their quarterly results</h3> The top performers in the second quarter were undoubtedly key companies, including Coca-Cola European Partners, which exceeded expectations in terms of EPS and sales, showing growth of more than 91% and 89% respectively. Among companies specialising in various types of beverages, Celsius, Ambev SA and Fomento Económico Mexicano also surprised positively, with EPS growth of more than 20%. Increased prices for many products and higher consumption of non-sweetened and energy drinks were key factors that contributed to the joint increase in results. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_CocaColaEUP_05.09.png" /> Source: Conotoxia CocaColaEUP, H4 Walmart and P&G also reported better-than-expected financial results. From the reports of these two major retail suppliers, we learn that sales through the e-commerce channel increased and the cosmetics segment led the sales growth with double-digit results. These factors may indicate a return of consumer confidence in publishing. However, if we are going to analyse the behaviour of different groups of consumers, we need to be aware that the United States is characterised by significant wealth inequality, as reflected in the Gini coefficient, ranking it 47th in terms of income inequality among countries. For this reason, an analysis of consumer spending may not adequately reflect their actual standard of living. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_walmart_05.09.png" /> Source: Conotoxia MT5, Walmart, Daily   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comTue, 05 Sep 2023 10:58:00 +0200The financial results of retail companies for the second quarter of 2023 came as a very positive surprise compared to previous readings. The percentage of companies that made a net profit increased - from 61% to 69%. Similarly, the percentage of compani...Next week to watch (04. – 08.09.)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-04-08-09https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-04-08-09Next week, members of the Bank of Canada's governing council will vote on whether to keep Canada's interest rate unchanged or strengthen its recently resumed series of rate hikes. Furthermore, Japan, which is being closely watched due to its strong stock market performance, will report its Q2 GDP growth rate, which, according to initial estimates, is higher than that of most Western countries. <h3>Wednesday, 06.09. 14:00 GMT, Canada Interest Rate Decision</h3> The Bank of Canada governing council members vote on whether to raise, decrease, or leave interest rates unchanged. These decisions affect the currency's value, and interest rate policy is among the key instruments to regulate inflation. Investors closely follow central banks' decisions and changes in the level of interest rates, as this information can be crucial to their trading strategies. The value of a currency tends to rise when interest rates are high, as they attract investors seeking higher returns on their deposits. Conversely, when interest rates are low, the currency's value tends to fall as investors look for other places to invest their money.  In July 2023, the Bank of Canada implemented its anticipated move by raising the target for its overnight rate by 25 basis points to 5%. This adjustment was in line with market expectations and followed a surprising 25 basis points rate increase that had been introduced in the previous meeting. The bank continued its tightening trajectory, extending this cycle beyond the temporary pause observed in March and April. The Governing Council of the central bank indicated that the prevailing strength in consumer spending and the persistent tightness within the labour markets contributed to the endurance of inflationary pressures, particularly within the services sector. Together, these factors justified a further upward shift in borrowing costs. Consequently, the central bank modified its projections, now foreseeing a more protracted period for the slowdown in inflation. According to the forecast, inflation is expected to hover around 3% next year before gradually declining to the targeted rate of 2% by mid-2025. The central bank remains committed to rigorously assessing the dynamics of core inflation and the overall outlook for CPI inflation. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopy_kanada_01.09.png" /> Source: Tradingeconomics.com A higher-than-expected rate may be positive for the CAD and negative for the stock market, while a lower-than-expected rate may be negative for the CAD and positive for the stock market. Impact: CAD, S&P/TSX <h3>Thursday 07.09. 23:50 GMT, Japan Gross Domestic Product (GDP) QoQ (2Q)</h3> Gross domestic product (GDP) indicates the total value of goods and services produced in a country for a certain period. GDP is an important indicator of the health of an economy because it gives an overall picture of how well or poorly it is doing. If the GDP growth is higher than expected, the economy is in good shape and growing faster than expected. On the other hand, if the GDP growth is lower than expected, the economy performs weaker than anticipated. According to the initial estimates, the Japanese economy showed robust growth during Q2 of 2023, surging by 1.5% quarter-over-quarter. This exceeded market predictions, which had anticipated a more modest 0.8% increase, and marked an acceleration from the previously adjusted 0.9% growth in Q1. This performance marked the economy's second consecutive quarter of expansion and showcased the swiftest pace since Q4 of 2020. The driving force behind this growth was a notably positive influence from net trade. The rebound in exports, registering a 3.2% rise versus the preceding -3.8%, played a significant role. Moreover, imports underwent their third consecutive quarterly decline, decreasing by -4.3% compared to the prior -2.3%. Conversely, government spending exhibited limited growth (0.1% vs. 0.1%), and capital expenditure remained stagnant following a 1.8% expansion in the previous quarter. Private consumption, which accounts for more than half of the economy, declined after two consecutive quarters of growth, mainly due to significant cost pressures. The contraction in private consumption was -0.5%, compared with growth of 0.6% in the previous quarter. Last year, the Japanese economy grew by 1.1%, a slowdown from the 2.1% growth recorded in 2021. This deceleration was influenced by persistent global challenges that affected economic momentum. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_Japan_01.09.png" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bullish effect on the JPY, while a lower-than-expected reading could be bearish for the JPY. Impact: JPY <h3>Friday 08.09. 06:00 GMT, Germany Consumer Price Index (CPI) YoY (August)</h3> The CPI index measures changes in the prices of consumer goods and services. It covers different types of products, such as food, fuel, transportation services, cosmetics, household goods, clothing, and many others. The purpose of the CPI index is to measure the increase or decrease in the cost of living for consumers. As the CPI index rises, consumers' purchasing costs increase, affecting their money's purchasing power. The CPI index is used to monitor inflation or the overall rise in prices in the economy. It allows us to assess whether prices are rising too fast or too slowly and to determine what economic policy measures should be taken to offset the adverse effects of inflation. According to the preliminary results published on August 30th, Germany's rate of consumer price inflation in August 2023 demonstrated a moderation, settling at 6.1% on a year-on-year basis. This represented a slight dip from the preceding month's figure of 6.2%. The preliminary estimate aligned closely with market projections, slightly surpassing the expected rate of 6.0%. Despite this minor reduction and the alignment with the 14-month low recorded in May, the inflation rate remained significantly elevated compared to the European Central Bank's targeted rate of 2.0%. Notably, the core inflation rate, which excludes volatile elements such as food and energy, exhibited no change and remained consistent at 5.5%. Services inflation experienced a gentle easing, descending from July's 5.2% to 5.1%. Conversely, the inflation rate pertaining to goods accelerated, rising from 7.0% to 7.1%. This acceleration was primarily attributed to a surge in energy costs. In contrast, food prices rose at a slower pace. On a month-to-month basis, consumer prices displayed a 0.3% advancement in August - the same as in the prior period. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_CPI_Niemcy_01.09.png" /> Source: Tradingeconomics.com On the one hand, if the reading is higher than expected, inflation is higher, which may favour a fall in the EUR. Meanwhile, it is also a stimulus for the ECB to raise interest rates and reduce the money supply, causing an increase in the EUR. On the other hand, if the reading is lower than expected, it may give the ECB an argument to stop its policy of raising interest rates. Impact: EUR, DAX <h3>Stocks to watch</h3> Zscaler (ZS) announcing its earnings results for the quarter ending on 07/2023. Forecasted EPS: 0.4912. Positive earnings surprise in 10 out of the last 10 reports. Time: Tuesday, September 5, after the market closes.   Copart (CPRT) announcing its earnings results for the quarter ending on 07/2023. Forecasted EPS: 0.325. Positive earnings surprise in 1 out of the last 10 reports. Time: Wednesday, September 6.  Kroger (KR) announcing its earnings results for the quarter ending on 07/2023. Forecasted EPS: 0.914. Positive earnings surprise in 10 out of the last 10 reports. Time: Friday, September 8, before the market opens.    Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73,02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. <div id="gtx-trans" style="position: absolute; left: -103px; top: 2532.63px;"> <div class="gtx-trans-icon"> </div> </div>forex conotoxia.comFri, 01 Sep 2023 10:32:00 +0200Next week, members of the Bank of Canada's governing council will vote on whether to keep Canada's interest rate unchanged or strengthen its recently resumed series of rate hikes. Furthermore, Japan, which is being closely watched due to its strong stoc...Taylor Swift: in the realm of business and investmenthttps://invest.conotoxia.com/investment-research/comments/taylor-swift-in-the-realm-of-business-and-investmenthttps://invest.conotoxia.com/investment-research/comments/taylor-swift-in-the-realm-of-business-and-investmentAccording to figures provided by Forbes magazine, Taylor Swift's overall wealth is currently estimated to be around 740 million US dollars. Nevertheless, there is a possibility that these figures are underestimated, especially given the artist's recent tour. Let's take a closer look at her business activities and consider how large her wealth is. Let's compare it to the value of companies, cryptocurrencies, individual listed stocks and top lottery winnings.<h3>Taylor Swift's investments</h3> Taylor Swift, a well-known music star, has a fortune of $740 million. She has achieved this through a combination of record-breaking concert ticket sales, albums, the development of her music studios, and real estate. With her ongoing 'The Eras tour', let's take a look at her investments and businesses.  To begin with, we should take any figures regarding the singer's wealth with a grain of skepticTo start with, however, we must look at any figures of the singer's wealth with a pinch of salt, as her wealth statement is not publicly available. ism, given that her financial statement is not publicly accessible. Big Machine Records gained attention mainly by signing Taylor Swift early in her career. Swift released her first studio albums such as 'Taylor Swift', 'Fearless', 'Speak Now' and 'Red' under the label's wing. However, in 2019. Swift announced that she was not going to renew her contract with Big Machine Records, as the company planned to sell her earlier recordings with the label. This was a source of controversy and dispute between Swift and the label and their new owner Scooter Braun. Under Republic Records, Taylor Swift continued to release her albums, including 'Lover' 'Folklore', 'Evermore', 'Fearless (Taylor's Version)', 'Red (Taylor's Version)' and others. Her move to Republic Records has also brought her commercial and artistic success. The albums Folklore and Evermore. Music production and touring are the artist's main sources of income. The recent 'Reputatio' tour, for example, brought in a significant $345 million from ticket sales. Taylor Swift also owns real estate and flats, which are currently worth more than US$150 million, according to the WSJ. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_FORBES_Taylor_01.09.png" /> Source: Forbes <h3>Taylor Swift's estate vs lotteries</h3> It turns out that, despite the impressive fortune the singer has managed to amass, compared to the biggest win in history - US$1.5 billion in the Powerball lottery in the US in 2016. - her fortune would only represent half of that sum. Although this juxtaposition is an inadequate comparison, it can be seen as an interesting scaling perspective. Next, we can consider whether Taylor Swift can be referred to as 'Barbie'? It turns out that revenues from cinema ticket sales almost double the singer's wealth. According to data released by Statista, the total revenue from sales of the Greta Gerwig-directed film is as high as $1.3 million. <h3>But let's move on to the financial world</h3> When money is mentioned, investments cannot be overlooked, which seems to be more significant for the actress than one might think. It is worth mentioning here a story related to the collapse of the cryptocurrency exchange FTX. In 2022, FTX attempted a $100 million sponsorship deal with Taylor Swift. However, according to witnesses, after careful scrutiny of the offer, Swift decided against it. Adam Moskowitz, one of the lawyers leading the class action lawsuit against FTX, told The Scoop podcast in April 2023 that Taylor Swift was the person who asked the key question, preventing the damit from losing the funding: "Can you confirm to me that these are not unregistered securities?". Comparing her wealth to the value of individual cryptocurrencies, it would currently rank 47th in terms of market value, sitting alongside cryptocurrencies such as Stacks, Algorand and MultiversX. Moving from the realm of cryptocurrencies to the stock market, imagine Taylor Swift as a publicly listed company. In this case, it would rank around 1600th in terms of capitalisation on the US stock exchange (NYSE), ranking alongside companies such as fuel distributor CrossAmerica Partners, casino chain Bally's Corporation or fuel technology provider TETRA Technologies. Looking at the Polish stock exchange (WSE), its assets could be compared to the value of media holding Wirtualna Polska, clothing retailer CCC or residential developer Atal. Not all shares are available to everyone, even if they are listed on stock exchanges. Sometimes it happens that a company sets the price of one share very high in order to attract mainly various types of financial institutions instead of a wide range of customers. An example of this is Berkshire Hathaway investment fund. One share of this company is worth as much as USD 547 000. Taylor Swift's entire fortune would be enough to purchase approximately 1,350 stocks in Berkshire Hathaway. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_berkshire_dzienny_01.09.png" /> Source: Tradingview   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 01 Sep 2023 09:49:00 +0200According to figures provided by Forbes magazine, Taylor Swift's overall wealth is currently estimated to be around 740 million US dollars. Nevertheless, there is a possibility that these figures are underestimated, especially given the artist's recent ...BRICS opens a new era in finance. Which currencies will benefit from the retreat from the dollar?https://invest.conotoxia.com/investment-research/comments/brics-opens-a-new-era-in-finance-which-currencies-will-benefit-from-the-retreat-from-the-dollarhttps://invest.conotoxia.com/investment-research/comments/brics-opens-a-new-era-in-finance-which-currencies-will-benefit-from-the-retreat-from-the-dollarFollowing the conclusion of the three-day summit of the BRICS association of countries, which includes Brazil, Russia, India, China and South Africa, we learned, among other things, of plans to add six more members. The expansion aims to create a stronger coalition of developing countries to represent the interests of the Global South on the international stage. The decision comes after more than 40 countries expressed interest in joining BRICS, with 23 of them submitting official applications. The suspension of plans to introduce a single currency to dethrone the US dollar was also discussed. However, it is worth considering what impact such a decision might have on the individual local currencies of the BRICS countries.<h3>What is BRICS?</h3> BRICS, an acronym for the five countries Brazil, Russia, India, China and South Africa, is an international economic and political bloc of five emerging national economies. BRICS was formed as a group in 2009, becoming the largest economic association in the world. Today, BRICS accounts for, as much as 32.1% of global GDP, while the G7 accounts for 29.9%. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_BRICS_30.08.png" /> Source: Statista The BRICS aims to foster cooperation between countries in economic, financial, political and strategic areas. This bloc represents a significant share of the global economy, encompassing a substantial population and natural resources. The main goals of the BRICS include increasing the influence of these countries in international financial institutions such as the International Monetary Fund and the World Bank, and promoting balance in the global economic system. The first of these goals seems particularly important. The BRICS countries account for the majority of global GDP, yet they are in a minority in global financial institutions. Currently, the G7 has 41.7% of the voting rights in the IMF, while the BRICS countries have only 14.3%. Including the countries aspiring to join the association (provisionally named BRICS+), this share would rise to 18.8%. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres)udzia%C5%82_w_MFW_30.08.png" alt="" /> Source: IMF BRICS holds annual summits where the leaders of these countries meet to discuss common goals, challenges and initiatives. The bloc focuses on a number of areas of cooperation, such as trade, finance, investment, science and technology. In 2010, South Africa joined the group, changing the acronym from BRIC to BRICS. In 2023, six new countries were invited to become full members: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates. Accession would place an emphasis on the Middle East, which would be another step towards supporting the BRICS members' complete raw material and energy independence from the West. <h3>Dominance of the dollar as a reserve currency</h3> Before going on to analyse the individual BRICS currencies and the impact of the latest meeting, let us consider the reasons for the power of the United States. Here, it is useful to go back in history to a few decades ago.  After the Second World War, the United States initiated the Bretton Woods Agreement to rebuild European states. The system envisaged the US dollar as the main reserve currency, and its creation went hand in hand with the creation of two key financial institutions: The International Monetary Fund (IMF) and the World Bank, which were to oversee financial stability and promote economic development. In the 1960s, the Bretton Woods system began to encounter difficulties. A growing US trade deficit and an excess of dollars on the market increased pressure to convert dollars to gold, which could deplete US bullion reserves. In 1971, President Richard Nixon announced the suspension of the conversion of dollars to gold, which in effect led to the collapse of the Bretton Woods system. After its collapse, the US dollar still remained the main reserve currency, but was no longer based on a fixed gold standard. The strengthening of the dollar's position was achieved through an agreement with Saudi Arabia, which at the time was the world's main oil exporter. This agreement stipulated that Saudi Arabia would only accept payments for oil in US dollars (USD), and in return, the US pledged to provide military and political support to Saudi Arabia. This agreement was crucial in cementing the US dollar's position as the main international reserve currency. The introduction of the practice of denominating oil transactions in US dollars significantly increased the demand for dollars, strengthened its value and enabled the United States to finance its trade deficit by issuing dollars. Currently, according to the IMF, the dollar accounts for 59% of the world's foreign exchange reserves at central banks and, despite the best efforts of the BRICS countries, this is unlikely to change over the next decade. The Bank for International Settlements estimates that the US dollar is involved in almost 90% of foreign exchange transactions and accounts for 85% of spot, forward market transactions. Half of global trade and three-quarters of trade in the Asia-Pacific region is denominated in US dollars, and this is not likely to change any time soon. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/%C5%9Bwiatowe_rezerwy_dolara_30.08.png" width="911" height="742" /> Source: IMF <h3>Currencies that stand to gain the most</h3> To understand which BRICS currencies are likely to benefit most from increased exchange in national currencies, it is useful to focus on their self-financing capacity and central bank policies. We can assess the first of these aspects through, among other things, an indicator related to the current balance of trade accounts in relation to GDP. This indicator measures the difference between exports and imports of goods, services and financial transfers in a country. It indicates whether a country is a net exporter or imports more capital. It indicates whether more money is flowing into the country (positive balance) or more is flowing out (negative balance). When analysing the BRICS countries, according to the International Monetary Fund (IMF), the Russian rouble and the Chinese yuan are in a particularly favourable position. It is these two currencies that have been gaining the upper hand for many years by exporting more capital than imports, which presumably has a positive impact on the value of these currencies. Nevertheless, when we direct our gaze to the exchange rates of these particular currencies on the international market, we see that there are additional factors that affect their value. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_bilans_p%C5%82atniczy_30.08.png" /> Source: IMF The mechanism works similarly in the case of currency interventions. A central bank, seeking to strengthen its currency, for example, may carry out a sale of foreign currencies. Such intervention directly affects the exchange rate of the currency in the foreign exchange market. As a result, countries whose reserves are steadily increasing gain global attractiveness and increase their capacity for currency intervention. In this respect, the Indian rupee and the South African rand have come to the fore since 2010. These developments may also explain why the rouble, despite having the most favourable trade balance behind it, is losing value. Interestingly, it was only after the largest monetary addition in US history that we could see that, at a time when the Fed was increasing its balance sheet dramatically, the dollar was clearly strengthening despite historically low interest rates. This shows that central bank interventions can have a greater impact on quotes than the interest rate differential itself. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_rezerwy_bank%C3%B3w_centralnych_30.08.png" /> Source: Fred <h3>Summary</h3> Summarising the available data on the potential of the BRICS currencies, it can be concluded that the position of the dollar does not appear to be under threat. However, if we focus on the potential to strengthen trade within the BRICS coalition, the rupee, rand and, in third place, the yuan show the greatest potential in this context. Most of these countries have no interest in strengthening their currencies against the dollar, especially when they are net exporters vis-à-vis the United States.   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comWed, 30 Aug 2023 14:11:00 +0200Following the conclusion of the three-day summit of the BRICS association of countries, which includes Brazil, Russia, India, China and South Africa, we learned, among other things, of plans to add six more members. The expansion aims to create a strong...Next week to watch (28.08. – 01.09.)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-28-08-01-09https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-28-08-01-09As next week marks the end of August and the end of the summer holidays, investors may be bracing themselves for September, which is historically the worst month for stock returns, according to Dow Jones data. Next week, we will be following trends in US consumer confidence, followed by US GDP growth figures for the second quarter and the US unemployment rate. On the other side of the Atlantic, the preliminary result for August inflation in the Eurozone will be released.<h3>Tuesday, 29.08. 14:00 GMT, US CB Consumer Confidence (August)</h3> The Conference Board's Consumer Confidence Index (CCI) measures consumer confidence in the economy. It is an indicator that can predict future consumer spending, a key factor in overall economic activity. Higher values indicate greater consumer optimism. The CCI is measured based on the level of confidence in 1985, which is set at 100 points. An index above 100 points indicates a higher confidence level than in 1985. Conversely, a value below 100 points means a lower level of confidence than in 1985. In July, the Conference Board Consumer Confidence Index exhibited another increase, reaching 117.0, which was better than expected (111.8) and up from the June figure of 110.1. The Present Situation Index, which measures consumers' assessment of current business and labour market conditions, rose to 160.0 from 155.3 in the previous month. Similarly, the Expectations Index, which measures consumers' near-term anticipations for income, business prospects, and labour market situations, improved to 88.3 from its June value of 80.0. Significantly, the Expectations Index has surged well above the threshold of 80, historically recognized as a level that indicates an impending recession within the subsequent year. Despite the ascent in interest rates, consumer sentiment remains optimistic, potentially driven by reduced inflation and a robust job market. However, the significant difference between the Present Situation Index and the Expectations Index may highlight the consumers' uncertainty about the future.   <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_CB_CCI_25.08.png" /> Source: www.conference-board.org/ A higher-than-expected reading may have a bullish effect on the USD, while a lower-than-expected reading could be bearish for the USD. Impact: USD <h3>Wednesday 30.08. 12:30 GMT, US Gross Domestic Product (GDP) QoQ (2Q)</h3> Gross domestic product (GDP) indicates the total value of goods and services produced in a country for a certain period. GDP is an important indicator of the health of an economy because it gives an overall picture of how well or poorly it is doing. If the GDP growth is higher than expected, the economy is in good shape and growing faster than expected. On the other hand, if the GDP growth is lower than expected, the economy performs weaker than anticipated. According to the initial estimates, the United States economy displayed an annualized expansion of 2.4% in the second quarter of 2023. This growth rate surpasses the 2% growth experienced in the preceding quarter and notably exceeds the market's projected growth of 1.8%. Nonresidential fixed investment underwent a substantial acceleration, surging by 7.7% compared to the prior quarter's 0.6%. This growth was mainly driven by a rebound in investment in equipment, which rose by 10.8% after contracting by 8.9% in the previous quarter, and investment in products based on intellectual property, which grew by 3.9% after contracting by 3.1% in the previous quarter. In contrast, consumer spending experienced a marked deceleration, rising by 1.6% compared to the previous quarter's robust 4.2%. Despite this slowdown, consumer spending still exceeded market predictions, as inflationary pressures eased, and the labour market maintained its tightness. Notably, while consumption of goods witnessed a marked slowdown, increasing by 0.7% compared to the previous 6%, spending on services remained resilient, expanding by 2.1% compared to the prior 3.2%. Meanwhile, public expenditure increased at a more subdued rate of 2.6% in comparison to the previous 5%. On the other hand, net trade had a negative impact on growth, subtracting 0.12 percentage points. It resulted from exports declining by 10.8% and imports experiencing a lesser decline of 7.8%.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_USA_25.08.png" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bullish effect on the USD, while a lower-than-expected reading could be bearish for the USD. Impact: USD <h3>Thursday 31.08. 09:00 GMT, Eurozone Consumer Price Index (CPI) YoY (August preliminary)</h3> The CPI index measures changes in the prices of consumer goods and services. It covers different types of products, such as food, fuel, transportation services, cosmetics, household goods, clothing, and many others. The purpose of the CPI index is to measure the increase or decrease in the cost of living for consumers. As the CPI index rises, consumers' purchasing costs increase, affecting their money's purchasing power. The CPI index is used to monitor inflation or the overall rise in prices in the economy. It allows us to assess whether prices are rising too fast or too slowly and to determine what economic policy measures should be taken to offset the adverse effects of inflation. The Eurozone's consumer price inflation rate for July 2023 was reported at 5.3%. This marked the lowest level since January 2022, primarily attributed to a further reduction in energy prices, which saw a decrease of -6.1%, compared to the previous -5.6%. Additionally, there was a moderation in costs for alcohol and tobacco, which saw a change of 10.8% as opposed to the previous 11.6%, and for non-energy industrial goods, where the adjustment was from 5.5% to 5%. Conversely, the rate of inflation for services accelerated to 5.6%, up from the previous 5.4%. Meanwhile, the core inflation rate, which omits prices of energy, food, alcohol, and tobacco, remained steady at 5.5%. Notably, this core inflation rate has now surpassed the headline rate for the first time since 2021. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/Wykres_CPI_EU_25.08.png" /> Source: Tradingeconomics.com On the one hand, if the reading is higher than expected, inflation is higher, which may favour a fall in the EUR. Meanwhile, it is also a stimulus for the ECB to raise interest rates and reduce the money supply, causing an increase in the EUR. On the other hand, if the reading is lower than expected, it may give the ECB an argument to stop its policy of raising interest rates. Impact: EUR, STOXX <h3>Friday 1.09. 12:30 GMT, US Unemployment Rate (August)</h3> The unemployment rate is the percentage of people without a job actively seeking employment in the previous month relative to the total number of people of working age or in the labour market. A high unemployment rate means that a large number of people are out of work despite actively seeking employment. A low unemployment rate indicates a stable labour market and greater availability of jobs.  Unemployment rates are important for economic analysis and can affect social and economic aspects. A high unemployment rate is associated with lower incomes and increased poverty, while a low unemployment rate promotes increased wages and social welfare. Governments and policymakers monitor the unemployment rate to assess the effectiveness of employment policies and take action to create jobs and support the unemployed. However, it should be remembered that the unemployment rate is one of many tools for assessing the labour market. Analyzing other indicators, such as the labour force participation rate or wages, is also important. In July 2023, the unemployment rate in the United States witnessed a marginal decline, reaching 3.5%, down from June's 3.6%, and surpassing market anticipations which had predicted a 3.6% rate. The number of individuals classified as unemployed decreased by 116 thousand, resulting in a total of 5.841 million, while the count of employed individuals saw an increase of 268 thousand, reaching 161.262 million. The U-6 unemployment rate, a broader measure that encompasses individuals who desire employment but have ceased active job-seeking, as well as those who work part-time due to a lack of full-time opportunities, experienced a decrease from 6.9% in June to 6.7% in July. Despite these shifts in unemployment figures, the labour force participation rate remained stable at 62.6% in July. This rate is notable for maintaining its highest level since March 2020. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_stopa_bezrobocia_25.08.png" /> Source: Tradingeconomics.com A higher-than-expected reading may have a bearish effect on the USD, while a lower-than-expected reading could be bullish for the USD. Impact: USD <h3>Stocks to watch</h3> HP Inc (HPQ) announcing its earnings results for the quarter ending on 07/2023. Forecasted EPS: 0.8548. Positive earnings surprise in 8 out of the last 10 reports. Time: Tuesday, August 29, after the market closes.   Salesforce Inc (CRM) announcing its earnings results for the quarter ending on 07/2023. Forecasted EPS: 1.9. Positive earnings surprise in 10 out of the last 10 reports. Time: Wednesday, August 30, after the market closes.  Lululemon Athletica (LULU) announcing its earnings results for the quarter ending on 07/2023. Forecasted EPS: 2.53. Positive earnings surprise in 10 out of the last 10 reports. Time: Thursday, August 31, after the market closes.    Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73,02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 25 Aug 2023 11:00:00 +0200As next week marks the end of August and the end of the summer holidays, investors may be bracing themselves for September, which is historically the worst month for stock returns, according to Dow Jones data. Next week, we will be following trends in U...Companies being snapped up by super-investors. 13F Reporthttps://invest.conotoxia.com/investment-research/comments/companies-being-snapped-up-by-super-investors-13f-reporthttps://invest.conotoxia.com/investment-research/comments/companies-being-snapped-up-by-super-investors-13f-reportAt the end of each quarter, we look forward to the 13F report that is filed by investment funds in the US, provided they control or manage at least $100 million in assets. Taking a look at these documents, let's find out what assets the top players in the market were most likely to buy in Q2 this year.<h3>Are superinvestors predicting a bull market?</h3> Of the 77 super funds, as many as 964 different stocks were bought and as many as 1,047 sold. It seems, therefore, that major investors are not gushing with optimism. Does this mean that the recent rises in the indices have had little impact? <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_US100_dzienny_24.08.png" /> Source: Conotoxia MT5, US100, Daily The top five most-ignored companies in superinvestor funds were: Berkshire Hathaway A/B (accounting for 3.7% of all portfolios), Alphabet A/B (Google) (3.6%), Microsoft (2.7%), Meta Platforms (Facebook) (2%) and Amazon (1.8%). Analysing the data collected on superinvestor preferences, there are some surprising trends. The materials sector appears to have been the most popular, recording an increase of 0.68% in the size of super investors' portfolios. The industrial sector fared slightly worse, gaining by 0.42%. Interestingly, the opposite is observed for sectors strongly linked to technology. The technology sector lost 1.7%, while the information technology sector fell 1.16%, clearly illustrating the pessimism among investors. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_zmiana_sektorow_24.08.png" width="909" height="432" /> Source: <a href="https://www.dataroma.com/m/stats/stats.php?o=n">https://www.dataroma.com/m/stats/stats.php?o=n</a> To determine which companies were bought most often, we will count the differences in size and number of buyers to size and number of sellers. In this way, we will separate the shares of companies that were most frequently traded from those that may actually have potential. <h3>The highest demand for Markel Group Inc.</h3> In the second quarter of this year, as many as five super investors bought shares of Markel Corporation (MarkelCorp), worth a total of 0.12% of the managers' portfolios. Significantly, none of them sold shares in this company. Markel Corporation is a US company specialising in the insurance and financial sector. Its activities include property insurance, reinsurance and investments. The company is known for offering personalised insurance solutions for individual and corporate clients and for its involvement in the reinsurance area. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_MarkelCop_dzienny_24.08.png" /> Source: Conotoxia MT5, MarkelCorp, Daily <h3>Generac Holdings Inc.</h3> In second place was the seemingly niche company Generac Holdings Inc. (Generac), which was bought by as many as three super investors. Among them was Michael Burry, who became famous for his accurate prediction of the 2008 crisis. Total net purchases of Generac shares in Q2 amounted to 0.1% of all managers' portfolios.  Generac is a US-based company specialising in the manufacture and supply of energy-related solutions. Its core business includes the design, manufacture and distribution of portable and stationary generators, which are used as a source of backup power in the event of a power grid failure. The company also offers energy storage systems and energy management solutions. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Generac_daily_24.08.png" /> Source: Conotoxia MT5, Generac, Daily <h3>Fidelity National Financial Inc.</h3> In third place was Fidelity National Financial Inc. (FIS), which was purchased by three super investors. Total net purchases of Fidelity shares in Q2 represented 0.08% of all managers' portfolios.  US-based Fidelity National Financial specialises in real estate and financial services. Its core business includes providing title services, real estate insurance and technology solutions to the real estate industry. The company is active in providing real estate title security, mortgage services and other aspects of real estate transactions. It seems that recent purchases may herald the first signs of a new recovery in the US real estate market. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_FIZ_dzienny_24.08.png" /> Source: Conotoxia MT5, FIS, Daily <h3>Taiwan Semiconductor Manufacturing Company</h3> The first place off the podium belongs to the world's largest semiconductor manufacturer Taiwan Semiconductor Manufacturing Company (TaiwanSemic). Its shares were bought by seven super investors and sold by four. The total net value of purchased positions amounted to 0.076% of the managers' total portfolios.  Taiwan Semiconductor Manufacturing Company, the world's leading semiconductor and integrated circuit manufacturer, specialises in advanced process technology, producing microprocessors, graphics chips, memory chips and other electronic components for a wide range of industries, including telecommunications, consumer electronics, automotive and other industrial sectors. TSMC plays a key role in developing new semiconductor technologies and providing advanced products for the global electronics industry. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_TSMC_dzienny_24.08.png" /> Source: Conotoxia MT5, TaiwanSemic, Daily <h3>Advanced Micro Devices (AMD)</h3> In fifth place in the list of companies whose shares attracted the most interest was Advanced Micro Devices (AMD). Three super investors bought shares in this company, and the total net value of positions bought amounted to 0.07% of all managers' portfolios.  Advanced Micro Devices, Inc. is a company that manufactures microprocessors, graphics chips and other computer technology-related components. The company competes with Intel in processors and provides advanced graphics cards for the gaming and professional applications sector. AMD also provides innovative solutions in computing, artificial intelligence and future technologies. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_AMD_dzienny_24.08.png" /> Source: Conotoxia MT5, AMD, Daily   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comThu, 24 Aug 2023 10:43:00 +0200At the end of each quarter, we look forward to the 13F report that is filed by investment funds in the US, provided they control or manage at least $100 million in assets. Taking a look at these documents, let's find out what assets the top players in t...List of important issues facing the Chinese economyhttps://invest.conotoxia.com/investment-research/comments/list-of-important-issues-facing-the-chinese-economyhttps://invest.conotoxia.com/investment-research/comments/list-of-important-issues-facing-the-chinese-economyThe accumulation of deteriorating economic indicators seems to have prompted the Chinese central bank to cut interest rates by 10 basis points. As a result, despite the ongoing process of economic growth, we are encountering a significant slowdown. This, in turn, is leading Chinese 10-year bond yields to fall from 3 to 2.55% since the beginning of the year. It is worth considering what negative factors are contributing to the current state and what we can expect in the future?<h3>Declining demographics are one of the main factors in the slowdown</h3> One of the main reasons for the economic slowdown in China is the drastically falling demographics. The accumulating problems are the result of the previous one-child policy, which the Chinese government introduced in 1979. The consequence is that the number of employed people has fallen almost to the levels of before the beginning of this century. Since 1990, the birth rate has not exceeded the level of 2.1, which is considered the minimum for demographic development. It currently stands at around 1.1. In this respect, it appears that China resembles a power in decline rather than one that is gaining ground. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_zatrudnieni_23.08.png" width="910" height="424" /> Source: Tradingeconomics <h3>Declining GDP is not the only problem</h3> While it is hard to consider economic growth of 6.3% y/y as a recession, it is worse than the expected 7.3% y/y. We can also see warning signs in the macroeconomic data. OPEC analysts forecast a decline in the rate of consumption of oil and oil products in the range of 6-10% to 3-5% from Q3 this year. Oil consumption is particularly important in the context of the development of the Chinese economy, which is the second largest consumer of oil in the world, just after the United States. China's share of global demand is as high as 15.7%. The volume of oil consumption by the Middle Kingdom appears to be a key indicator for assessing the development of this economy. Analysing China's economy in this way, it is indeed possible to conclude that economic growth is set to slow down. Nevertheless, no signs of recession have been observed here so far. Therefore, it seems that we should not see a significant drop in oil prices in the long term. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_zapotrzebowanie_na_rope_23.08.png" /> Source: OPEC <h3>Decline in exports due to West's breathlessness</h3> Investors are becoming increasingly concerned about bad markets following the release of the latest data on Chinese exports, which fell by 14.5% year-on-year, the biggest drop since the outbreak of the pandemic crisis. The main reason for this decline in goods exports appears to be a reduction in demand from Western countries, especially the US, which is the recipient of as much as 17% of all Chinese exports. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_export_chiny_23.08.png" width="910" height="424" /> Source: Tradingeconomics <h3>Has China lost its formerly attractive investment status?</h3> After the 2008 crisis, the rate of investment in fixed assets of Chinese enterprises has steadily declined - from around 20% to the current 3.4% in annual terms. The main area responsible for this decline in growth is investment in the real estate sector. Here, there was a decline of 8.5% on an annualised basis. This seems to be related to an excessive focus on this sector in the economy, as highlighted by the recent declaration of bankruptcy of one of the largest developers, the Evergrande Group. Such a situation could indicate a repeat of the property crisis, similar to the one in 2008, although this is not yet visible in property prices in the country. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_inwestycje_kapita%C5%82owe_23.08.png" width="910" height="424" /> Source: Tradingeconomics <h3>Deflation. Yes, deflation in China....</h3> What may come as more of a surprise to Western investors is the current decline in the prices of goods and services in China. This phenomenon is evident, among others, in the CPI consumer inflation index, which falls by 0.3% on an annualised basis, and in PPI producer inflation, which fell by 4.4%. Deeper analysis reveals that the main factors behind this fall in prices are reduced transport and raw material costs. It appears that these factors were among the main determinants of the Chinese central bank's decision to cut interest rates. The question may arise as to why Asian economies such as China and Japan have not had to deal with the global inflation we have seen in Western countries? It seems to be because the growth of the money supply (measured, among other things, by the M3 aggregate) was in no way different from the pre-pandemic situation, unlike in Western economies. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_CPI_chiny_23.08.png" width="910" height="424" /> Source: Tradingeconomics Deflation has historically often been the predecessor of economic downturns or recessions. An example is Japan, which has long suffered from deflation and its negative effects, including reduced demand and investment. Despite concerns, the Chinese economy appears to be resilient and the authorities are able to intervene. The case of Japan shows that avoiding prolonged deflation may require appropriate policy action and economic stimulation. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_M3_23.08.png" width="913" height="425" /> Source: Tradingeconomics   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comWed, 23 Aug 2023 09:26:00 +0200The accumulation of deteriorating economic indicators seems to have prompted the Chinese central bank to cut interest rates by 10 basis points. As a result, despite the ongoing process of economic growth, we are encountering a significant slowdown. This...Next week to watch (21 – 25.08.)https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-21-25-08https://invest.conotoxia.com/investment-research/next-week-to-watch/next-week-to-watch-21-25-08August is traditionally a quieter month after most companies have reported their second-quarter results, and many are enjoying their summer holidays. Next week, we will be able to follow Germany’s reports on the Producer Price Index as well as its update on the second quarter GDP growth. <h3>Monday, 21.08. 06:00 GMT, Germany Producer Price Index (PPI) MoM (July)</h3> The Producer Price Index (PPI) measures the changes in prices received by local producers for their goods, showcasing a wholesale-level overview of inflation. This comprehensive index is constructed from numerous industry-specific and product-category indices, collectively reflecting producer price changes.   The PPI differs from the Consumer Price Index (CPI), which measures the changes in the price of goods and services paid by consumers. Producer and consumer price patterns are unlikely to remain disparate for extended periods, as changes in producer prices significantly impact consumer charges and vice versa. In the immediate timeframe, disparities in inflation rates between wholesale and retail sectors may arise due to factors like distribution expenses, along with government taxes and subsidies. The German PPI has been negative since October 2022, except for April 2023, when the data showed a 0.3% increase month-on-month. In June, the German PPI was reported at -0.3%, slightly higher than expected (-0.4%) after a drop of -1.4% a month before. The decline in producer inflation may be related to relatively lower oil and energy prices in the first months of the year, which have now started to rebound, potentially leading to a return of price increases in the near future.  <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PPI_niemcy_18.08.png" /> Source: Tradingeconomics.com On the one hand, if the reading is higher than expected, it may favour a fall in the EUR. Meanwhile, it could also be a stimulus for the ECB to raise interest rates and reduce the money supply causing an increase in the EUR. On the other hand, if the reading is lower than expected, it may give the ECB an argument to stop its policy of raising interest rates. Impact: EUR <h3>Friday 25.08. 06:00 GMT, Germany Gross Domestic Product (GDP) QoQ (2Q)</h3> Gross domestic product (GDP) indicates the total value of goods and services produced in a country for a certain period. GDP is an important indicator of the health of an economy because it gives an overall picture of how well or poorly it is doing. If the GDP growth is higher than expected, the economy is in good shape and is growing faster than expected. On the other hand, if the GDP growth is lower than expected, the economy performs weaker than anticipated. According to an initial assessment, the German economy managed to reverse the trend of recession in the second quarter of this year, following two quarters of contraction. However, the data was somewhat disappointing as it came out lower than expected (0.0% versus the Bundesbank’s expectation of 0.1%).  Nevertheless, the first-quarter figures have been revised upward from -0.3% to -0.1%, and adjustments have been made for the fourth quarter of 2022 as well, shifting from -0.5% to -0.4%. Full-year growth rates for German GDP now stand at -0.3% for 2023, succeeded by growth rates of 1.2% in 2024 and 1.3% in 2025, according to the Bundesbank. The IMF has also lowered their expectations to a steeper GDP contraction of 0.3% this year, surpassing the 0.1% decline projected in April. This gloomy outlook may be largely due to the continued fragility of the manufacturing sector. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_PKB_Niemcy_18.08.png" /> Source: Tradingeconomics.com Higher-than-expected reading may have a bullish effect on the EUR, while a lower-than-expected reading could be bearish for the EUR. Impact: EUR <h3>Stocks to watch</h3> Zoom Video Communications Inc (ZM) announcing its earnings results for the quarter ending on 07/2023. Forecasted EPS: 1.06. Positive earnings surprise in 10 out of the last 10 reports. Time: Tuesday, August 22.  NVIDIA (NVDA) announcing its earnings results for the quarter ending on 07/2023. Forecasted EPS: 2.07. Positive earnings surprise in 9 out of the last 10 reports. Time: Wednesday, August 23, after the market closes.  Workday (WDAY) announcing its earnings results for the quarter ending on 07/2023. Forecasted EPS: 1.25. Positive earnings surprise in 9 out of the last 10 reports. Time: Thursday, August 24, after the market closes.  Marvell (MRVL) announcing its earnings results for the quarter ending on 07/2023. Forecasted EPS: 0.3225. Positive earnings surprise in 7 out of the last 10 reports. Time: Friday, August 25.    Santa Zvaigzne-Sproge, CFA, Head of Investment Advice Department at Conotoxia Ltd. (Conotoxia investment service) Materials, analysis, and opinions contained, referenced, or provided herein are intended solely for informational and educational purposes. The personal opinion of the author does not represent and should not be constructed as a statement, or investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73,02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. <div id="gtx-trans" style="position: absolute; left: -25px; top: 1595.96px;"> <div class="gtx-trans-icon"> </div> </div>forex conotoxia.comFri, 18 Aug 2023 09:38:00 +0200August is traditionally a quieter month after most companies have reported their second-quarter results, and many are enjoying their summer holidays. Next week, we will be able to follow Germany’s reports on the Producer Price Index as well as its updat...A weak ruble with the possibility of a rebound?https://invest.conotoxia.com/investment-research/comments/a-weak-ruble-with-the-possibility-of-a-reboundhttps://invest.conotoxia.com/investment-research/comments/a-weak-ruble-with-the-possibility-of-a-reboundThe Russian currency has again reached historically weak levels, the second time since the outbreak of the war in Ukraine that it has crossed the 100 roubles per dollar barrier. The current declines appear to be driven mainly by two factors: the price of Urals crude oil, which has jumped above the USD 70 per barrel level, and declining production of petroleum products. According to OPEC analyses, it could fall by 5.9% year-on-year this year. The Central Bank of Russia is intervening to strengthen the rouble's quotations. Let us consider what the consequences of this might be.<h3>Decline in Russian oil production part of OPEC+ plan</h3> We have learned from the latest OPEC cartel report that the second and third quarters of this year are set to be the most difficult period for crude producers in recent years. The largest quarterly drop in production is expected to be 14.4% year-on-year, but by the end of 2024, production is planned to recover to 5.9% lower than before the outbreak. This could be a signal that Moscow is keeping its word on the promised reduction in supply, while cooperating with Saudi Arabia as OPEC leader. Major oil producers, including Russia, have already been cutting supplies since November to prevent price falls. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_zmiana_produkcji_ropy_18.08.png" /> Source: OPEC Oil extraction is of particular importance to the Russian economy, accounting for as much as 43% of exports. The fall in the value of the rouble should theoretically be related to market prices for energy raw materials. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/eksport_russia_18.08.png" width="914" height="648" /> Source: <a href="https://oec.world/en/profile/country/rus#:~:text=Exports%20The%20top%20exports%20of,and%20Italy%20(%2422.2B)">https://oec.world/en/profile/country/rus#:~:text=Exports%20The%20top%20exports%20of,and%20Italy%20(%2422.2B)</a>. <h3>What could this mean for the rouble?</h3> Despite the recent strengthening of Russian Urals oil prices above the USD 70 per barrel level, we are not seeing this reflected in the strengthening of the rouble. This may be due to the fact that Russian export companies are not exchanging yuan or Indian rupees, among others, which keeps the ruble depreciating steadily. It is for this reason that we saw a higher-than-expected interest rate hike at the last meeting of the Central Bank of Russia, reaching a level of 12%. There are also opinions that the Russian government may force domestic exporters to sell foreign currency, which, combined with the central bank's actions and the rise in oil prices, may indeed lead to a significant strengthening of the rouble in the short term. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_XBRUSD_dzienny_18.08.png" /> Source: Conotoxia MT5, XBRUSD, Daily <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_USDRUB_18.08.png" /> Source: Tradingview   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comFri, 18 Aug 2023 09:29:00 +0200The Russian currency has again reached historically weak levels, the second time since the outbreak of the war in Ukraine that it has crossed the 100 roubles per dollar barrier. The current declines appear to be driven mainly by two factors: the price o...Oil prices on an upward trajectory: here's what the OPEC report showshttps://invest.conotoxia.com/investment-research/comments/oil-prices-on-an-upward-trajectory-here-s-what-the-opec-report-showshttps://invest.conotoxia.com/investment-research/comments/oil-prices-on-an-upward-trajectory-here-s-what-the-opec-report-showsWTI crude oil prices have surpassed their peak for the year. reaching USD 83.5 per barrel. This appears to be primarily the result of a lesser pace of global economic slowdown than previously anticipated. This may be confirmed by the new OPEC report, which presents crude demand and production forecasts based on multi-year contracts and new orders. Let's take a look at the data in this report and consider what impact this may have on the oil price and global markets.<h3>Oil shortages by the end of 2024?</h3> Looking at production forecasts, we note that in the absence of a change in production volumes by OPEC from Q3 this year to the end of 2024, there is a possibility of continued shortages. This, in turn, would potentially have an impact on the continuation of price increases. We could already see the first shortfall in Q2 this year. It is important to emphasise that oil products exhibit a low elasticity of demand, which means that an increase in the price of crude does not necessarily result in a decrease in demand for it. For this reason, oil prices on the markets are prone to significant fluctuations. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_supply_demand_ENG_14.08.png" /> Source: OPEC <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_XTIUSD_daily_14.08.png" /> Source: Conotoxia MT5, XTIUSD, Daily <h3>Global economic recovery expected?</h3> The main factor for potential shortages is an increase in expectations of future demand for the coming quarters. We can note that OPEC analysts are already forecasting a recovery. It is noteworthy that the only region where demand is forecast to decline in 2023 is Europe (with an expected decline of 0.6% year-on-year). Interestingly, analysts are forecasting a slowdown in Western countries despite a recovery in the rest of the world. For example: oil demand in the United States is expected to grow by 0.5% and 0.7% in 2023 and 2024, respectively. During the same periods, demand in China could grow by 6.2% and 3.7%, respectively. Due to the link between economic development and the consumption of petroleum products, analysts foresee a clear disparity in development between the East and West of the world. This, in turn, is likely to have a favourable impact on Chinese indices, including the Hang Seng 50 (HK50) index listed on the Hong Kong Stock Exchange. <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_Demand_ENG_14.08.png" /> Source: Dane OPEC <img src="https://storage.googleapis.com/media-conotoxia-com/stocks%20daily/wykres_HK50_daily_14.08.png" /> Source: Conotoxia MT5, HK50, Daily   Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service) Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.02% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.forex conotoxia.comMon, 14 Aug 2023 14:42:00 +0200WTI crude oil prices have surpassed their peak for the year. reaching USD 83.5 per barrel. This appears to be primarily the result of a lesser pace of global economic slowdown than previously anticipated. This may be confirmed by the new OPEC report, wh...