In recent years, imminent agreements have become commonplace, but they never come to fruition, or at least take forever to see the light of day. So it was with the theme of the trade war between the United States and China that is not resolved, only postponed, it has been like this with Brexit and it is being like this with the question of the stimulus package to the American economy by the Congress .
Amid rhetorical curves and counter-curves, and despite all threats from the UK side, the pound sterling is now rising 0,8% to $ 1,3048, due to statements by the European Union's chief negotiator, Michel Barnier, about the possibility of an agreement being "achievable", which is nothing new considering the several times when this has already been said by both parties.
On the other side of the Atlantic, the same plot in another novel. Democrats, through the voice of their leader, Nancy Pelosi, and the White House, through Treasury Secretary Steven Mnuchin, are almost always optimistic but in concrete nothing new. This Tuesday Pelosi once again said that he was hopeful of an understanding and that this is everyone's will. However, this is not so likely, although Trump has indicated that he accepted the Democrats 'proposal, as there are indications of the Republicans' leader's unwillingness to approve a package until the November 3 elections, let alone a much-needed oxygen balloon. higher than your proposal.
This political uncertainty of the United States Congress is conditioning sentiment on Wall Street at a time when investors were already divided as to the direction to take to a clearly overvalued market, in relation to short, medium and long term averages, namely in forward price earnings ratio, as well as the lack of visibility regarding the sustainable recovery of the largest economy in the world.
In other words, at this stage, and as I mentioned in previous comments, the North American indices do not have a clear direction, because if the valuations the fundamentals are scarce, for a correction the reasons are not enough to overcome the enormous existing liquidity, the excess capital that needs to be invested in a scenario of extremely low interest rates and unparalleled financing facilities, in several of the largest economies in the world, creating a scenario of capital rotation between the most valued sectors and those that have space for value, but not across the board.
By this I mean that investors are now much more selective when it comes to investing, even within sectors that are more desirable in times of pandemic, which means that, for example, Apple and Amazon have a gain of 60% and 74% in terms of 2020, while Google does not reach 16% and the duo Microsoft / Facebook is on the order of 30% rise this year.
For this Wednesday, the panorama presents itself with mixed colors and without great catalysts for either side it could be a day of volatility of senses, but with little percentage fluctuation. Highlight, however, for 0,6% gains in the yen and gold for 104,84 and $ 1,918, respectively, which is not fully justified by the decrease of the US dollar by -0,4%, that is, there is some looking for traditional refuge assets.
Today's chart is from the S & P500, the time-frame is 1 hour.
The main stock index is at an important stage, because if it cannot handle the bottom line of the channel, it can bearish in the short term.