Weekly Global Markets Digest #9 Sep 21 — Sep 27, 2020
- Stock market closed the fourth week in a row with losses.
- Amazon will become a new competitor to Google and Microsoft by launching its own cloud gaming service.
- A San Francisco court blocked Trump’s executive order banning WeChat in the US.
- Tesla did not meet the expectations of shareholders, announcing that the production of budget electric cars will not begin soon.
In today’s digest, we will tell you what happened on the financial markets between September 21 and September 27 and how the exchange rates of stocks, commodities and currencies changed.
Stocks fall for fourth week straight
The stock market correction continues for a whole month. It was the first losing month for the indexes since March. After the rapid growth, shares of major technology companies continue to fall, putting pressure on the indexes. This is because investors are not sure about the imminent recovery of the US economy and fear the emergence of the second wave of coronavirus. This, in turn, changed the optimistic mood of investors to a negative one.
Google (GOOGL) shares fell 4.32% to $1,414.19 over the week, Facebook (FB) fell 2.08% to $248.06, and Apple (AAPL) fell 1.92% to $108.80. Shares of Amazon (AMZN) rose slightly, up 0.37% to $3,018.93, and Microsoft (MSFT) rose 0.14% to $202.97. Meanwhile, Amazon has entered a battle with Google and Microsoft in the field of cloud gaming.
Tesla (TSLA) has once again become the most actively traded stock on the market. In a week, TSLA fell 9.30%, falling to $400.68, stronger than the shares of other major companies. This rapid decline is due to the fact that investors were disappointed with Tesla’s Battery Day. The company has released a new battery model for mass production, which can reduce the cost of Tesla electric cars by 56%. After this news, the Tesla website and app were unavailable, and the company had problems with order processing and deliveries.
Other active shares last week were Zoom Video (ZM), which rose 11.57% to $494.32. In a year, ZM shares brought investors more than 588%, and the company’s revenue for the same period was more than 112%, which was facilitated by the pandemic and restrictions imposed in various countries.
USA
The US government is not renewing the aid package to restore the country’s economy. Along with the uncertainty of the results of the upcoming presidential election and the growing incidence of COVID-19, this puts significant pressure on the stock market. The Dow Jones index was hit the hardest, falling almost 3% over the past week.
At the same time, a Federal court in San Francisco blocked US President Donald Trump’s order to ban WeChat, because it perceives the app as a threat to national security. The court finds that trump’s decree violates the 1st amendment to the US Constitution.
S&P500 (SPX): -1.88% to 3,257.36
NASDAQ (IXIC): -0.33% to 10,753.15
DOW JONES (DJI): -2.87% to 26,860.84
Last week, many large companies showed disappointing results. This time, large companies were in the lead. In terms of growth, Twitter (TWTR) and eBay Inc. (EBAY) are leading the way, rising 9.63% and 6.96%, respectively. Twitter shares rose after prominent analyst Michael Levin of Pivotal Research Group bought them out, setting a target price of $59.75.
Among the losers were shares of Albermarle Corporation (ALB) and Universal Health Services, Inc. (UHS). ALB shares are down 17.06% despite the company’s Zacks Rank #3 (HOLD), and analysts expect EPS growth of 8% over the next 3 to 5 years. The situation is similar for UHS shares, that lost 15.90%. They are also assigned Zacks Rank #3 (HOLD), and the company’s financial indicators have grown by 36.2% over the past six months.
Asia
Shares of Chinese companies fell on the background of the strengthening of the US dollar on Wednesday due to the same concerns that the pace of economic recovery will slow down due to new restrictions triggered by the growth of COVID-19.
The US continues to wage a trade war with China, officially banning American companies from supplying Huawei with any products. The ban has been in effect since September 15.
The outsider among Asian markets was the S&P/ASX 200, which rose 1.71% over the week after news that representatives of the “Big four” Australian banks announced easier access to credit products for consumers and small businesses.
Nikkei 225: -0.67% to 23,204.62
S&P/ASX 200: +1.71% to 5,964.90
Shanghai Composite: -3.56% to 3,219.42
KOSPI: -5.54% to 2,278.79
Shares of SPI Energy Co., Ltd (SPI) soared more than 3,000% on Wednesday after the company launched a new electric car manufacturing subsidiary. The price adjusted after that, but it is trading up 1059.29% from the previous week. Senmiao Technology Limited (AIHS) gained 51.13%.
Wave Life Sciences Ltd. (WVE) and Moxian, Inc. (MOXC) fell the most, down 49.92% and 42.22%, respectively. WVE shares rose after Truist Securities analyst John Lee set a price target of $27, as he believes the company’s new drugs have potential judging by the published preclinical data.
Eurozone
On Wednesday, the EU released a report on the business activity index (PMI), which turned out to be disappointing: the index fell below 50 points for the first time in four months, which shook investors’ hopes for an early economic recovery. This is lower than analysts expected.
Consumer purchasing activity has also decreased. In Europe, restrictions began to be imposed again due to the surge in cases of coronavirus infection. Some restrictions have already started to apply in the UK, France, Germany, Austria, Norway and a number of other countries. This will further shake Europe’s already fragile economy.
CAC 40: -5.19% to 4,719.46
FTSE 100: -2.92% to 5,832.65
DAX: -5.15% to 12,443.30
Shares of Axovant Gene Therapies Ltd. (AXGT) jumped 17.26% over the week, continuing a 45% rise over the past month. Axovant was assigned Zacks Rank #3 (HOLD), and shares of Global Ship Lease, Inc. (GSL) gained 11.09%.
AC Immune SA (ACIU) fell 45.81% after new drugs being developed to treat early-stage Alzheimer’s failed tests.
Frank’s International N. V. (FI) decreased to 37.12%. The company’s P/E ratio has been flat over the past year, and investors expect the drop to continue before the company releases its next quarterly report in November.
Gold shows the worst week in the last month
The strengthening of the dollar and other currencies has dealt a serious blow to commodities. On Wednesday, September 23, the price of gold fell below $1,900 per ounce for the first time. Over the week, gold lost 4.97% in price, falling to $1,865.15. Silver fell even more — by 15.05%.
Oil fell slightly: WTI fell 2.215 to $40.25, and Brent — 2.94% to $41.91. These are not bad indicators, given the falling demand and growing supply of petroleum products. The price of natural gas futures for the week gained 8.15%, as demand for it is actively growing.
FOREX
USD/CAD: +1.55% to 1.3415
NZD/USD: -3.31% to 0.6535
USD/JPY: +0.99% to 105.62
GBP/USD: -1.61% to 1.2704
EUR/USD: -1.81% to 1.1616
The dollar hit its highest level since late July amid a massive sell-off in the stock market. EUR/USD is down 1.81% to a two-month low of 1.1616, as is the British pound, which fell below 1.3000 for the first time since August.
It was a weekly global markets digest. See you again in a week. Subscribe and clap, stay up to date and have a successful trading activity.
If you missed our Weekly Crypto Markets Digest #9:
https://medium.com/@excelsior_one/weekly-crypto-markets-digest-9-sep-21-sep-27-2020-5bc9b1c23cd8
