Review of September 14-18, when the Fed decision was thing of the past. Forecast for the week 21 – 25 September

By | September 20, 2015

In the week ended equity indices showed a mixed trend. Until the publication of the decision on the monetary policy of the US Federal Reserve, they were growing up, but then turned around and the closure of the loss suffered. The reason lies in the fact that his failure to act, the Fed made it clear that he still fears for the state of the national economy. As a result, Dow Jones lost 0.92%. NASDAQ closed with a symbolic reduction of 0.18%. Hong Kong HSI ended the week with a total of + 1.45%. And at the same decision, the Fed. Low rates in the United States will prevent the accelerated capital outflows from China. The German DAX 30 (FDAX) fell by 2.32%.

Gold grew. First, under the influence is not enough strong data on consumer price index in the US, and later on the decision of the Federal Reserve. As a result, this week the asset has appreciated by 2.84%, pointing to a maximum of 1141.73. Silver added 3.8%. Brent crude oil finished the week with a loss of 2.69%. But it is worth noting that the black gold has not yet emerged from the previously established range of 47.00 – 52.20.

Chart of the week:

gold chart
Gold chart
Forecast for the week 21 – 25 September
Stock market
Clarity about the prospects for monetary policy after the meeting of September 16 – 17 has been added. But exactly, it became clear that the regulator fears for the future of their own economy and not sure that it will be able to keep the current pace of growth in a tighter monetary policy. In addition, the Fed fears that what is happening in the world would restrain economic activity and put additional downward pressure on inflation. Therefore, until the end of the year the market will continue to monitor very closely the macroeconomic statistics from the US. In the week ahead relevant reports scheduled for publication is not much.
Attention may involve data on orders for durable goods, as well as a final report on the pace of US economic growth in Q2. If GDP will be revised downwards by 3.7% according to preliminary estimates, the dollar could come under pressure. The fact that at the September meeting, the Fed revised its forecast for the growth rate for 2016 and 2017 years downward to 2.3% and 2.2%, 2.5% and 2.3%, respectively. And any evidence that the economy is indeed lowers turnover can have on stock indexes moderate pressure. In this case, Dow Jones (YM) may continue to decline in short term in the area of ​​level 15535. Nasdaq (NQ) is able to be reduced to the level of 4200.00. But it is possible that growth will resume later benchmarks on expectations that the period of low interest rates may be delayed for a longer period than before December 2015.
Now that the Fed meeting was over, the market may again switch the state of the Chinese economy. In particular, the impact will be published data on the index of business activity in the manufacturing sector (PMI Caixin) in September. It is expected a slight increase in the index (to 47.5 from 47.3 in August), but in general, the index is likely to hold out in the area of ​​the recession that will continue to put pressure on the Hong Kong Hang Seng (HSI). It is also a negative factor may make growing fears that China‘s measures taken by the authorities are not able to support economic growth in general and the stock market in particular. Against this background, the benchmark may be reduced in the area of ​​level 21090 with the further aim at around 20,300.
Commodity and raw market
Quotes of Brent crude oil continued to show mixed trends. And until then, until a sufficient catalyst to break the boundaries of one of the previously established range (47.00 – 52.20), to talk about the direction of travel will prematurely. The situation is in fact continues to be uncertain. On the one hand, OPEC predicts that by 2018, oil prices could rise in the area of ​​$ 80 per barrel. But at the moment the cartel is clearly going to continue to fight for the retention of market share, although at the expense of lower prices for black gold.
Recent data from the EIA reflected the reduction of commercial stocks and the decline in production to 9.117 million barrels per day. At the same time, the production decline is recorded for 6 consecutive weeks. A low oil prices trigger a series of bankruptcies in the oil and gas industry in the US and Canada, which will further reduce the supply of black gold on the world market. Recent data from Baker Hughes reflected further reductions in the number of working drilling in North America (which for the year fell to 59.77%). This gives reason to believe that the next report from the Energy Information Agency again reflect the decline in production in the United States. Against this background, oil quotes will be able to attempt to overcome the 50.00 level and continue to grow to around 52.20.
Warning: Profitability in the past does not mean profitability in the future. Any projections are for information only and does not guarantee a result.
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