Weekly Market Outlook: The Jackson Hole Symposium begins
No doubt this week will be marked by the celebration of the expected Jackson Hole symposium, since it is expected that this meeting will shed some light over the possible beginning of the withdrawal of stimulus by the Federal Reserve, due to the strong increase in inflation in the United States and the economic recovery generated by the expansion policies carried out to overcome the serious crisis generated by the Covid-19. Jerome Powell is expected to take the floor next Friday, August 27, so we will have to be very attentive to his speech in relation to the clues he can give about the beginning of tapering.
For the moment, the week has begun with the publication of preliminary data on the manufacturing and services sector PMI in France, Germany, for the euro zone as a whole and the United Kingdom, with the general negative trend with the exception of the PMI for the German services sector, which has been the only one that has exceeded market expectations.
Specifically, the preliminary German manufacturing PMI has settled at 62.7 points and that of the services sector at 61.5 points while the market consensus expected these to reach 65.0 points and 61.0 points respectively.
For its part, france's preliminary manufacturing PMI has settled at 57.3 points in line with market expectations while the data for the services sector has remained 0.6 points below expectations to reach 56.4 points.
If we look at the euro zone as a whole, both data have been negative as they have not only been lower than the figure for the previous month, but have also fallen below market expectations, reaching the preliminary PMI for the services and manufacturing sectors at 59.7 points and 61.5 points respectively.
Preliminary data for the United States are also expected to be released this afternoon. Among other data for the week, we can highlight the GDP data for the second quarter in Germany and the Ifo confidence data for business and consumer confidence that will be published on Tuesday, Wednesday and Thursday respectively. Below, we can see some other interesting facts from this week:
Source: MetaTrader 5 macroeconomic calendar.
Trader's radar: Will Brent be able to break the upside channel to the downside?
During the last weeks, we have been observing that after marking annual highs on July 6 around 78.44 dollars per barrel, the price of a barrel of Brent is experiencing a notable decline due to the growing fear caused by the Delta variant of the coronavirus and its rapid expansion, which may slow economic growth and therefore oil consumption.
In addition, as we discussed in previous analyses, OPEC and its allies reached an agreement at the beginning of last July that would progressively increase production at a rate of 400,000 barrels per day to reach 2 million barrels next December, so that the increase in supply and the possible reduction in demand could put even more downward pressure on the price of a barrel of crude oil.
If we look at the daily chart, we can see that the barrel of Brent is currently in an area close to its main support levels represented by its 200-session moving average in the red and the lower band of the upside channel that began in April 2020. The loss of this important level of support could open the door to a further correction whose price objective would be the breadth of that channel.
Source: Admiral Markets MetaTrader 5. Daily Brent chart. Data range: December 27, 2018 to August 23, 2021. Prepared on August 23, 2021 at 11:05 am CEST. Please note that past returns do not guarantee future returns.
Evolution in the last 5 years:
- 2020: -21.52%
- 2019: 22.68%
- 2018: -19.55%
- 2017: 17.69%
- 2016: 52.41%
Corporate news and stock indexes
In last Wednesday's analysis, we commented that Tesla's stock had been affected after the National Highway Traffic Safety Administration in the United States announced that it would open a formal investigation into the company's Autopilot system, causing a decline in the share price.
To this news, was added the revelation that the famous investor Michael Burry has increased his short position through PUT options on this company, thus increasing doubts about this company.
But after this negative news, Tesla celebrated its long-awaited day of artificial intelligence, where Elon Musk himself announced that this company is not only investing to improve its current products, but is also developing a humanoid robot known as "Tesla Bot" that could take care of both routine tasks and perform more dangerous actions. this could be a major revolution for the future. This robot could have a height of 1.72 meters and a weight close to 54 kilograms, being able to lift a weight of up to 68 kilograms.
This announcement could again attract the attention of investors since so far this year, the company chaired by Elon Musk loses 3.60% although this figure increases to 19.65% if we compare it with the annual highs reached on January 25.
If we look at the daily chart, we can see that the price is currently fighting for its important support level represented by the lower band of the short-term uptrend channel after bouncing down the medium-term downtrend line. The bearish breakout of this channel could open the door to further correction until the next support in the coincident zone of its 200-session moving average and the red stripe of the previous lows.
Conversely, as long as we don’t have a consistent breakout of the $700 level and the downtrend line discussed above, we can’t expect a new upside momentum.
Source: Daily tesla chart from Admiral Markets’ MetaTrader 5 platform from April 1, 2020 to August 23, 2021. Held: August 23 at 11:25 am CEST. Note: Past performance is not a reliable indicator of future results or future performance.
Evolution of the last 5 years:
- 2020: 743.40%
- 2019: 25.71%
- 2018: 6.89%
- 2017: 45.69%
- 2016: -10.96%
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