Another great day for bulls

06.02.2020 11:32|Conotoxia Ltd Analyst Team

Buyers of shares on the trading floors from Asia to the United States do not take a break. The scale of an increase in recent days, which together account for a rise throughout the week has not been seen for a long time. The risk appetite has returned, and its scale may once again bring some reflection on the ongoing euphoria on the stock market.

Futures contracts from Asia to the US are continuing the increases started earlier this week. As a result, on Wall Street, all three major stock indices like S&P 500 (US500 on Conotoxia trading platform), Nasdaq 100 (US100) and Dow Jones Industrial Average (US30) set new records. In turn, the German DAX (DE30) is very close to the highest level in history. What draws attention is the fact that earlier increases took place with much less volatility. This means that the difference between closing and opening prices, e.g. during the week were much closer to each other than this week. So we are dealing with above average euphoria of stock buying, which sometimes may be a warning sign.

Investors got some positive information this week. First of all, there are chances for effective treatment of patients infected with coronavirus, January brought a strong rebound in the services sector in Europe and in the USA, the situation in the US labor market, according to the ADP report, is also very good. Furthermore, China announced that from February 14, US USD 75 billion in tariffs will be reduced. Tariffs will be reduced from 10% to 5% and from 5% to 2.5% depending on the goods. The reductions apply to tariffs imposed on September 1st, 2019, which included pork, beef, soy, car parts, cotton and crude oil. On the one hand, the Chinese government is trying to save the economy threatened by a strong slowdown, and on the other, it is implementing the assumptions of the Phase One of the trade agreement signed on January 15th.

So at the beginning of February a lot of positive information accumulated, which seems to lead to the best week on Wall Street (based on the S&P 500 index) from June 2019.


Daniel Kostecki, Chief Analyst Conotoxia Ltd.

Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.

60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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71.98% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71.98% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.