Week in a Glance: Panic Attack, ECB and Britain's Problems

26 ביולי 2021

Last week turned out to be very eventful, if not in terms of news, then in price dynamics, for sure. On Monday, the markets were naturally attacked by panic. As a result, the day became one of the worst for the Dow Jones. Tellingly, an attack of panic arose out of the blue: fundamentally, nothing foreshadowed trouble.

The reporting season is likely to be the best for the US stock market since late 2009. Almost all of the reporting people easily beat the already very optimistic forecasts of analysts. Last week NetFlix, Snap, Twitter, Intel and many others did it.

Given the groundlessness of Monday's fall, there is probably nothing strange in the fact that since Tuesday the US stock market has been growing almost non-stop, renewing new all-time highs. What is at least Nasdak above 15K. We have written about the insanity of current prices more than once, but the very fact that prices are detached from reality does not mean that they should fall today or tomorrow. Quite the contrary, this week the reporting season is at its peak.

Reporting by tech giants Apple, Microsoft, Amazon, Facebook, Alphabet and others. Considering that the companies of the FAAMG group account for more than half of the capitalization of the Nasdaq, the index will most likely have no choice but to grow this week.

Our idea in this regard: wait for Friday and actively sell Nasdak. The fact is that there will be no reasons for the growth of the Index after the last ones from FAAMG are reported on Thursday, and the data on US GDP for the second quarter will be published in the USA.

Although in fact, everything may end on Wednesday following the meeting of the Committee on Open Market Operations of the FRS. Hints of an imminent tightening of monetary policy in the United States may well provoke a new attack of panic.

What else is perhaps worth selling this week is the British pound. Last week, despite the growth of the British currency, the fundamental background for the pound was extremely gloomy. The new wave of the pandemic provoked disruptions in the functioning of the economic mechanism, resulting in empty shelves in supermarkets and a lack of gasoline at gas stations.

Even a special term was invented for this phenomenon: "pingdemia" (if a person was seen in contact with a sick person, a special application sends him a signal - a ping - to leave in 10 days of self-isolation). And then there is the conflict with the EU over the Brexit agreement regarding the Northern Ireland protocol. In general, everything speaks in favor of selling the British currency.

Last week, the ECB left the monetary policy parameters unchanged and was extremely peaceful in the sense that the Central Bank was more than satisfied with the ultra-soft policy.