Trading Preview: The US in Focus
Welcome to our trading preview, the best way to kick-off your trading week. This week, we’re running our magnifying glass over the US markets. Following that, we’ll give you the important events for your trading radar. Shall we?
What are the big techies up to?
A great way to measure the health of the economy is to check what direction its biggest companies are moving in. Here are the top 3 largest US companies by market cap and how they’ve been doing over the last 6 months.
#1 Apple (AAPL)
High: 134.18 USD
Low: 70.74 USD
Close: 115.04 USD
6 mo % Change: +62.6%
AAPL stock price
Source: Google
#2 Microsoft (MSFT)
High: 231.65 USD
Low: 169.81 USD
Close: 216.23 USD
6 mo % Change: +23.8%
MSFT stock price
Source: Google
#3 Amazon (AMZN)
High: 3,531.45 USD
Low: 2,286.04 USD
Close: 3,204.40 USD
6 mo % Change: +32.9%
AMZN stock price
Source: Google
3 very positive graphs with lovely green lines all pointing in the right direction. It’s been a good 6 months for the US’ elite tech companies, no doubt. The ability of Apple and Microsoft, in particular, to have navigated the double headache of production issues and a slow-down in consumer spending thanks to COVID, is incredible. Their stock price increases are nothing short of remarkable. These three are weathering the perfect storm in style.
Very Presidential
If you’ve been hiding out on Mars for the past year or so, you’re not only blissfully unaware of a certain global pandemic (we’ll get to that later), you’re also probably totally out of the loop with regard to a not so insignificant political event that’s rapidly approaching.
Yep, that’s right, in precisely 8 days time, the US will be electing their (potentially new) Commander-in-Chief. But boy, is it going to be a close one!
Electoral College Polls, 25th October 2020
Source: 270 To Win
In terms of things that could have a potential impact on USD and the US economy, there aren’t many single events bigger than this one.
Right now, the immediate health of the USD all depends on what the result will actually be. Essentially, 4 scenarios could happen:
- Biden wins the Presidency and the Democrats take the Senate
- Biden becomes POTUS and the Republicans grab the Senate
- Trump lands the top gig and the Democrats bag the Senate
- Trump takes the Oval Office and the Republicans snatch the Senate
We’ll go over each of these four scenarios and what they could mean for the economy in our election special next week, don’t miss it!
COVID-19 and the Recession
You were waiting for this. There’s not a single country on the planet that’s been free from the impact of the pandemic. With 224,000 reported deaths, the US is, by far, the worst affected nation on the planet. With the second wave now beginning to spike, the US is experiencing over 85,000 new cases per day.
Daily COVID-19 cases, US
Source: Google
The US is in a deep, dark recession. But, as shown above, tech stocks don’t seem to realise that just yet, as they reach new highs day on day. Why might this be? Well, for one, tech investors, are looking toward the end of the pandemic already. Ever the optimists! Also, 5 big tech companies (3 of which are above) make up 21% of the S&P500. But smaller, unlisted companies have borne the brunt of most of the impact, especially unemployment.
And that’s the real issue. Things are much worse than they appear. Until the pandemic is over and these smaller companies can begin hiring again, the US will continue to spiral. Let’s hope it won’t be too much longer.
Good news: Black Friday!
One of the most important consumer dates in the US calendar is just around the corner, Black Friday, which occurs the first day after Thanksgiving (27.11 this year). It is one of the most important retail and spending events in the United States and a strong showing here can give a massive boost to thousands of companies that can really do with that right now.
It’s still a little way off yet, but many businesses will be looking to this day as a fork on the road to recovery. Which way will it go?
What’s on the trading agenda this week?
Busy week ahead, here’s everything you can’t afford to miss:
Monday 26th October
No major events planned
Tuesday 27th October
The US will announce its Durable Goods Orders (MoM) for September, as well as the CB Consumer Confidence numbers (USD)
Wednesday 28th October
We’ll get an Inflation Rate (YoY) update from Australia (AUD)
The Bank of Canada will also reveal its Interest Rate Decision (CAD)
Thursday 29th October
The Bank of Japan will announce its Interest Rate Decision (JPY)
Germany will give us an update on its Unemployment Figures (EUR)
The ECB will set its Interest Rates (EUR)
Friday 30th October
The EU will give a crucial update in its quarterly and yearly Growth Figures for Q3 (EUR)
The US will announce its PCE Price Index (YoY) numbers (USD)
Here at Contentworks we closely follow market movements and prep content that we think your traders would love to read. Let’s get you started right here. And don’t forget to join us this time next week for our US Election special.
Speak soon!
The Contentworks team
