After the brief consolidation phase registered by the world stock indices in September, stocks have regained buyer interest, as evidenced by the S&P 500 index hitting yet another all-time high close to 4700 points, a level that this summer seemed achievable only at the beginning of 2022. <\/p>\n\n\n\n
The acceleration of the upward trend should be attributed to the resurgence of pandemics which, patchily, continue to affect geographic areas of significant economic importance, such as Europe. It might seem a paradox but the reasoning that guides investors interested in stocks is based on the strategic importance that global liquidity has assumed since 2008 in the various financial systems. In fact, it should be noted that total world debt is around 300 trillion dollars, therefore it is essential that the systems have a high degree of liquidity to refinance the debt that is due to expire, while its cost in terms of interest rate is far less relevant. The liquidity of an economic system is divided into three components, that of the central bank, that of the private sector, also including shadow banks, and the working capital of companies and financial flows with foreign countries. <\/p>\n\n\n\n
Given the delicacy of the economic moment, characterized by the gradual process of normalization of the economic situation in the various countries, the emergence of a problem in one of these three elements could trigger a significant correction of the stock markets. Always taking the United States as a reference, since the start of last summer there have been modest signs of tightening of the Fed’s monetary policy through the use of reverse repo\u2019s while in the recent meeting of his Directorate, the Governor announced the start of the gradual reduction of purchases of government bonds and mortgages \u200b\u200bwhich will be finalized at the end of 2022, to be followed by a possible increase in the cost of money. The liquidity of the US private sector is also beginning to show signs of a downsizing while flows with foreign countries appear stable. As the Fed continues to take the lion’s share of the creation of surreptitious liquidity by global issuers, international investors are interpreting the partial pandemic resurgence as a strong deterrent to monetary authorities’ adoption of further monetary tightening measures, extending the maintenance horizon of the current excess liquidity at the root of the stock market rally that started in April 2020. From a technical point of view, the S&P 500 index has forged ahead, already positioning itself at a level close to 4800 points where there is an important level of resistance. <\/p>\n\n\n\n
Considering the continuation of the sectoral rotations within the index itself, which at the moment sees the healthcare \/ pharmaceutical sector and technology as overbought, while the cyclical and, in general, the non-growth sectors, have lagged behind, it can be hypothesized that the index will consolidate in the short term in the 4600\/4800 range with important support at 4550. As for the Euro Stoxx 50, the technical situation is equally constructive with the index pointing to a double top for the period at 4375, with supports at 4150 and 4000 respectively. Outside of this geographic area, the Japanese Nikkei index is worthy of note, which is consolidating in the 29,000 \/ 30,000 range, presenting a medium-term potential that projects it beyond 33,000. <\/p>\n\n\n\n
On the currency front, the relative strength of the Swiss franc is confirmed, while the US dollar has found strong resistance in the parity range with respect to the Euro at the 1.15 \/ 1.16 level which could represent a high for the period, in relation to the next ECB decisions. In fact, it should be recalled that the ECB differs from the FED which, has a mandate aimed at supporting the economic situation, while the European central bank has an anti-inflation mandate, so despite the recent assurances of its Governor, Mrs. Lagarde, a jump forward provoked by the hawks of the Directorate cannot be excluded, which considering the structural and not transitory current phase of inflationary resurgence, might induce a credit tightening and an increase in the key rate which, at least initially, could favor the euro against the greenback, unless it affects the gradual economic recovery underway in the Old Continent.<\/p>\n\n\n\n
Nicola Bravetti Data Source: Bloomberg<\/em><\/p>\n\n\n\n \u201cThis report cannot – nor can – be considered a solicitation to invest in financial instruments\u201d<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" After the brief consolidation phase registered by the world stock indices in September, stocks have regained buyer interest, as evidenced by the S&P 500 index hitting yet another all-time high close to 4700 points, a level that this summer seemed achievable only at the beginning of 2022. <\/p>\n","protected":false},"author":1,"featured_media":5405,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,31],"tags":[17,26,21,16,18],"class_list":["post-5693","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markobs","category-observer-2021","tag-bravoadvisory","tag-lugano","tag-market-observer-bravoadvisory-switzerland-ticino-svizzera","tag-observer","tag-switzerland"],"_links":{"self":[{"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=\/wp\/v2\/posts\/5693","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5693"}],"version-history":[{"count":1,"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=\/wp\/v2\/posts\/5693\/revisions"}],"predecessor-version":[{"id":5694,"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=\/wp\/v2\/posts\/5693\/revisions\/5694"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=\/wp\/v2\/media\/5405"}],"wp:attachment":[{"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5693"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5693"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bravettinicola.ch\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5693"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}