tasosbtj777 3 Posted March 29, 2020 (edited) Hi, first time post here but here are my two cents. I believe the stimulus bill being passed is the current cause of SPX having a pullback, thus causing EURUSD and GBPUSD to make these moves. The sentiment currently is risk on, but the reality of the situation is that the virus has not been solved and the worst is yet to come, especially in the U.S. I expect by the end of the week NYC to be in a lock-down and more states to follow. Additionally, this week is important because we are going to have post effect indicators of the economy, as of the past week we had lagging indicators i.e Weekly unemployment job claims at 3 million! A number that you would think would not cause the stock market to record its best weekly gain since 1938. Nevertheless, I expect DXY to form new highs in the weeks/months to come and I expect EURUSD under 1.05 and GBPUSD under 1.10 (My opinion and my opinion only) The spread in the credit market is also concerning and what I expect to be one of the causes our economy is going to go into a recession. Also, I foresee bad numbers coming out of the US and markets changing sentiments, causing SPX to fall even further. I believe USD will re-establish once again its safe haven status and eventually achieve parity against the EUR, which I see having major problems. A dissolvement of the EU in the long run might not be out of the question IMO. Lastly, I believe we will see WTI under $20. Edited March 29, 2020 by tasosbtj777 Share this post Link to post Share on other sites
RTrader 20 Posted March 29, 2020 Good insights. As far as the employment picture. It is so unprecedented that we have no way to predict what will happen with the economy in the US, and other countries as well. There is a very high chance it will be a recession so bad and deep that everyone will wish this was just 2008. Employment and people's confidence in things drives everything in the economy. Stocks are massively overvalued for the lack of growth right now. Good article on the employment, before the actual number came out last week. This coming week will probably be even worse for unemployment claims. As it turns out being a trader is one of the best jobs for times like this. https://www.vox.com/2020/3/21/21188529/initial-unemployment-claims-goldman-sachs Share this post Link to post Share on other sites
tasosbtj777 3 Posted March 31, 2020 (edited) On 3/29/2020 at 9:40 PM, RTrader said: Good insights. As far as the employment picture. It is so unprecedented that we have no way to predict what will happen with the economy in the US, and other countries as well. There is a very high chance it will be a recession so bad and deep that everyone will wish this was just 2008. Employment and people's confidence in things drives everything in the economy. Stocks are massively overvalued for the lack of growth right now. Good article on the employment, before the actual number came out last week. This coming week will probably be even worse for unemployment claims. As it turns out being a trader is one of the best jobs for times like this. https://www.vox.com/2020/3/21/21188529/initial-unemployment-claims-goldman-sachs I agree, being a trader in these market conditions is ideal especially in the FX market. Additionally, options are very good for these times. As regarding to your point about unemployment there are plenty of estimates but their range is about the same. Goldman Sachs came out with a report just recently saying we are to expect Q1 GDP -9%, Q2 GDP -34% and Unemployment rate to reach 15% mid-year! The numbers for the EU are even worse! I am worried a lot about the debt crisis starting from Italy. I ought to keep a closer looks on some of the CDS to really get a better picture. (If anybody can fill me in on the CDS and ABS numbers for Italy, Greece and Spain I would appreciate it. ) Things can get really ugly, mostly because a large part of those countries' GDP (Italy, Greece, Spain) is the tourism industry. I am very worried... Back to the US, those are absolutely terrifying numbers. For comparison, during the housing crisis unemployment rate reached 10%. I am very skeptical to the estimates that say we will bounce after Q3 and Q4 because quite simply we cannot predict a health crisis! I am very very very pro-dollar. This is a world wide hit and I expect every central bank to be running in demand for dollar liquidity through swap lines. Edited March 31, 2020 by tasosbtj777 Share this post Link to post Share on other sites
