Markets Update Friday 31/07/2020 – No “V”!?

Frankfurt – 31/07/20

No “V”!?

Yesterday’s after-hours business again showed what seems to be the trend for quite some time: Big-Tech is proving enormous resistance in the crisis, while the rest is badly hit. Apple, Amazon, Facebook and Google, for example, were able to present influential figures, and thus help the market, which was otherwise severely hit today, back on its feet.

With the number of infection cases rising again in Europe and also here in Germany, the corona crisis is increasingly moving into the focus of the markets. Concerns are growing, as a second lockdown is threatening to overshadow the market.

According to the experts of the Fuchs-Börsenbrief, a rapid economic comeback in V-form, which many had hoped for and which may already have been priced in recently, can probably be shelved after all. “We, therefore, assume that the stock market will now also break off its V recovery and return to the real economy,” the current market letter stated.

US Markets at a glance

In the end, Wall Street posted gains today.

The Dow Jones was not able to defend its initial gains in the meantime, but closed the trading day firmer at 26,428.32 points, an increase of 0.44 per cent. After an even higher start, the NASDAQ Composite technology index gained 1.49 per cent on the daily to 10,745.27 points.

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Before the weekend, investors’ focus was primarily on the heavyweights in the technology sector: Amazon, Apple, Facebook and Google’s parent company Alphabet presented figures for the past quarter after hours on the evening before the weekend. The quarterly figures of the major technology companies showed that the US economy is coming out of the crisis better than the German economy, analysts said.

Far East Markets at a glance

The Far Eastern stock markets experienced a change of direction.

In Tokyo, the Nikkei fell clearly into the red with a loss of 2.82 per cent at 21,710.00 points.

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On the Chinese mainland, the signs changed – in the end, Shanghai Composite shook off its losses and closed 0.71 per cent stronger at 3,310.01 units. In Hong Kong the Hang Seng index gave up its small markup and started the weekend 0.47 per cent weaker at 24,595.35 digits.

While the leading index in Tokyo went into negative territory, burdened by an appreciating yen, economic data in China provided support: the official purchasing managers’ index for the manufacturing sector rose surprisingly.

European Markets at a glance

Europe’s markets were unable to maintain their gains on Friday and slid into the red. Positive signals from the USA came too late in the end.

The EuroSTOXX 50 was trading on red territory in early trading, but then managed to move into the green. In the day, however, it relinquished its gains and dropped 1.06 per cent lower at 3,174.32 index units into the weekend.

Similarly, the Dax 30 gave up all previous gains in late trading and even went into the red. In the morning, the Dax had peaked at 12,524 points, fell in late trading and closed at 12,313 points. That is a daily loss of over 0.5 per cent and a weekly loss of around 4 per cent. The TecDAX, on the other hand, managed to expand its gains as the year progressed. In the end, the index posted an increase of 0.42 per cent to 3,005.00 points.

On Friday, there was a flood of impulses that stock market traders had to sort through: Quarterly figures were also the focus of attention. Also, investors focused their attention on economic data where contradictory signals came through. While positive balance sheets from US tech giants provided optimism, the facts don’t lie and highlight that the corona crisis has left its mark on the eurozone.

Forex, gold, oil and crypto

On the currency market, the euro climbed briefly above 1.19 US dollars in the morning. At its peak, the euro is valued at $1.1909 and thus reached its highest level since May 2018. However, the common currency then fell more noticeably again and now costs $1.1790. The euro exchange rate rose sharply in July. At the beginning of the month, it was still trading at $1.12. The high infection figures in the US and recently, weak economic data are weighing on the US dollar. Added to this is the unrest in some cities in the USA. On the other hand, confidence in the euro has increased following the decisions of the EU summit.

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Oil prices showed mixed trends on Friday. Most recently, a barrel (159 litres) of North Sea Brent crude was sold for 43.10 US dollars, 16 cents more than the day before. The price of a barrel of the American variety West Texas Intermediate (WTI), on the other hand, fell by 17 cents to $39.72.

The price of gold increased by 0.84 per cent to $1,976, moving back closer to the “magical” $2,000 mark.

The cryptocurrencies market posted further gains today with the overall market capitalization rising to 338 billion US dollars. The biggest gainer was once again XRP, rising 8.1 per cent to $0.2639. – a weekly plus of 27.8 per cent. Bitcoin and Ethereum also rose today, with Bitcoin moving up 3.36 per cent to $11,400 and Ethereum gaining 6.58 per cent to $354.

Corporate and world markets

Oil giants with huge losses

The decline of the black gold weighed heavily on the oil companies in the second quarter. The largest US oil company ExxonMobil slid deep into the red. The bottom line in the second quarter was a loss of 1.1 billion US dollars. A year ago, Exxon had earned 3.1 billion US dollars. Revenues fell by a good 50 per cent to 32.6 billion US dollars, while oil production fell by seven per cent to 3.6 million barrels per day.

The second-largest US oil multinational Chevron even suffered the most significant quarterly loss in decades. In the second quarter, the company made a net loss of 8.3 billion US dollars. In the corresponding period of the previous year, Chevron had still earned 4.3 billion US dollars. Chevron and Exxon shares are falling. 

Pinterest with user growth

The Pinterest picture platform has presented its balance sheet for the past quarter. EPS was minus $0.07, compared to a loss of $0.06 in the same quarter of the previous year. Analysts had expected an average loss per share of $0.14. Pinterest’s revenues amounted to USD 272.5 million, while experts had forecast $250.4 million. In the previous year, sales of $261.3 million had been on the books.

User numbers rose to 416 million active users per month during the Corona pandemic, compared to 367 million per month in the previous quarter. Analysts had expected 379 million active users. Pinterest stock, which trades on the NYSE, rose 36.13 per cent to $24.29 on Friday.

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