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ZFX: Bottom signal? Wall Street rallied amid uncertainties - Zeal Capital Market

ZFX: Bottom signal? Wall Street rallied amid uncertainties

28-09-2020 08:56

The European Stock markets were trading higher in early trade, following the momentum last Friday and today Asian session. There is a good news from HSBC which props the market sentiment. The shares of this banking giant surged 10% after Ping An Insurance announced that the group would increase its stake, becoming the biggest shareholder.

Last Friday, the overall market sentiment was just cautious during Asian and European trading session, with limited “bullish boost”. However, the Wall Street three major indexes were all good, that closed up despite mixed signs on economic recovery and the uncertainties. Tech stocks rally again was the focus, that the Nasdaq rose the most by 2.26%.

ZFX analyst Jacob Leung said that it may not be really “reasonable” for the rebound, as we can find so many variables that can trigger a reversal easily. It just depends when the factors will be “priced in” by the markets.

The US data missed the expectations, hurting the sentiment, while the dollar remained strong, coupled with other uncertainties, including the US election, the new relief bill from the US Congress, the pandemic no matter in Europe or the US, the China-US tensions, were all negative to the global economic recovery progress.

In FX, the dollar index hovered around the recent high over 94 level on Monday. It is a bit doubtful for investors while a rebound in the stock markets on Friday had no pressure on the recent strength. Obviously, dollar was deemed as a safe-haven over these days.

In the coming days, political uncertainties will keep investors on guard. Only very few traders will now expect the US Congress will make any deal regarding the stimulus package, especially before the election. On the other hand, investors now also are looking forward to the first “Presidential Debate” on Tuesday, which may contribute to one of the most significant drivers of the whole financial market in October.

ZFX analyst Jacob Leung said that reviewing all the various factors on Friday and the trend of the dollar, we can’t judge the end of the correction over the stock markets. No matter it is due to some short covering or strategy reallocation, the risk-off mode still stands.

Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.