The US stock market focuses on the G20
Markets demonstrated positive momentum, the demand for risks more restored. However, it is disturbing that the investors have laid out too much hope on the actions of politicians: many, if not all, of them can not be justified.
So, close attention on a meeting between leaders of China and the United States. However, this year we have watched these negotiations. It seemed that the parties had reached an understanding, but subsequently, the situation only worsened. Very high chances that the loud slogans of understanding will be followed by further steps of increase of tariffs on both sides. In the end, still rates was beneficial to the United States, and they have no incentive to take their positions, rejecting the doubling of fees and the rate increase from 10% to 25%.
China’s manufacturing PMI fell to 50.0: level that separates growth from recession. However, this has not caused a natural decline in markets as participants look forward to government incentives, which should spur economic growth. We have to note that the markets have been repeatedly disappointed in the size of the incentives: in fact, they are less than initial expectations.
No less alarming is the situation around oil. The weekend is scheduled to meet the leaders of Russia and Saudi Arabia, which will discuss when and how much to cut production within OPEC+. In fact, these countries and also the USA, have established their own record production this fall, was strengthened by the collapse of quotations. Remember how after the decision in principle in 2016 “to limit production” to implement nearly a year has passed. This time, signs that the path from words to actions will require the same amount of time, able to return oil to the region $50 dollars per barrel for Brent and $40-43 for WTI.
Government bond yield of Italy is reduced from multi-year highs on the belief that the government and the European Commission will come to an agreement on the budget. It is worth Recalling that in the same way evolved the sovereign debt crisis in Greece, which lasted many years and drastically “thinned the ranks” of supporters of the integrity of the Eurozone.
Purchase in the stock markets of the USA show that parties are confident prudent action by the fed. In part, these expectations make sense in light of the recent review of the Backup System, but you should bear in mind that this does not negate the December rise, and the FOMC will have plenty of time to change your attitude and affect the markets.