Breaking News
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% Upgrade now

Stocks Rise, Powell Warning, SoftBank, Pound And Gold

By London Capital Group (Jasper Lawler)Market OverviewMay 18, 2020 08:50
uk.investing.com/analysis/stocks-rise-powell-warning-softbank-pound-and-gold-200441817
Stocks Rise, Powell Warning, SoftBank, Pound And Gold
By London Capital Group (Jasper Lawler)   |  May 18, 2020 08:50
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
GBP/USD
-0.65%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
US500
-0.20%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
DJI
-0.14%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
DTEGn
-1.29%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
GBP/EUR
-0.65%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
CL
-0.26%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

Fed Chair Jay Powell has warned the US economic recovery might last through the end of 2021. The Fed is normally too optimistic in its forecasts so the outlook feels bleak. Still, warm weather is encouraging countries to continue exiting lockdown. If the flu season is anything to go by, sunny skies reduce the odds of an imminent second wave.

Indices

Stock markets look optimistic as we start the new week. As lockdown easing progresses, investors continue to value companies as if the global economy has already hit its low point.

Shares in Asia started the week on the front foot. European shares are opening higher. Commodity market gains are helping Big Oil and the miners.

Futures points to a firmer open on Wall Street. The S&P 500 is set to open over 1% higher. Poor results and even worse guidance from big US retailers this week are clearly not affecting investor confidence. With the likes of JC Penney filing for bankruptcy this weekend, investors are well prepped for bad news from retailers.

SoftBank

Shares of SoftBank are higher after the tech investment group reported a record $13 billion annual loss. Plans to buyback $4.3 billion shares and sell down some of its highest profile stakes to cover the losses are softening the blow. It was reported Softbank might sell some of its T-mobile stake to Deutsche Telekom (DE:DTEGn). We'd expect the group will pare some of its position in Alibaba (NYSE:BABA) too after Jack Ma stepped down from the board.

Thinking further out, investing in start-ups is high risk and you need the big winners to cover the rest that go sour. WeWork was supposed to be the latest big winner after Uber (NYSE:UBER) and Alibaba, but it wasn't. That means the only choice is to sell stakes until the next big winner, but that means lower returns and investors will start to walk, especially in a bad economy.

Forex

The British pound is turning lower against several major currencies. There was a thinking for a while that Brexit risk pales in comparison to the downturn brought about by the coronavirus. But now as medium-term economic forecasts darken, the prognosis is relatively worse for the UK than elsewhere because of Brexit.

Commodities

Gold has a hit a fresh 7-year high on Monday ($1763 per oz at time of writing). The Fed Chairman's warning is suggests taking an investment strategy that's defensive against weak growth and more monetary stimulus and gold covers both.

Front month for WTI crude oil has risen above $30 per barrel. It's a far cry from the negative prices of a month ago that everyone understood wasn't anything close to a proper valuation. The surprise drop in US crude stockpiles last week means storage is no longer the central issue. Opening calls Dow Jones to open 206 points higher at 23,891 S&P 500 to open 24 points higher at 2887

Chart: GBP/USD & GBP/EUR (2-months)

GBP/USD And GBP/EUR Chart
GBP/USD And GBP/EUR Chart

The British pound has broken down from its horizontal trading range versus several major currencies, including the US dollar and euro.

Original Post

Stocks Rise, Powell Warning, SoftBank, Pound And Gold
 

Related Articles

ING Economic and Financial Analysis
Rates Spark: Pivot Alert By ING Economic and Financial Analysis - Oct 04, 2022

Markets are smelling blood in the water, but do they have enough evidence to price a policy turnaround? Not yet in our view. The BoE’s reluctance to buy gilts is a sign that...

FocusEconomics
What's next for the UK economy? By FocusEconomics - Oct 04, 2022

The UK has been buffered in recent days by a tumbling pound and spiking bond yields. In our latest insight piece, we look at what is in store for the British economy. On 23...

Stocks Rise, Powell Warning, SoftBank, Pound And Gold

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email