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Good Morning. The S&P 500 closed just 12 points from a new all-time high on Monday, led by resurgent tech stocks. US futures began to rebound this morning after European and Asian stocks took the lead. There is a growing sense of inevitability that the benchmark S&P will hit record levels in a matter of days on its way to a series of new highs.
Here's what moves the markets.
- The mayor Asia indices are mixed in the afternoon trade, but those Shanghai composite continues its impressive run. The time has come 0.3%.
- The Trump Administration War on Huawei continues with the trading department on Monday, adding 38 Huawei partners in 21 countries an economic blacklist, a huge achievement for the company's 5G endeavors.
- There could be one competing bidder for TikTok's US business. According to Bloomberg, Oracle is considering whether to fight Microsoft for the video streaming app.
- The European stock exchanges are firmly in the green with the Europe Stoxx 600 above 0.1% after a negative start.
- GermanySpike in Coronavirus cases concerns, but manageable, Chancellor Angela Merkel says. This is the case after the country has had the most cases since April and neighboring European countries are starting Tightening restrictions amid a surge in cases in recent weeks.
- Alexander LukashenkoThe longtime leader of Belarus, often referred to as the last dictator in Europe, seems to be losing part of his power. Workers across the country went on strike as Mass protests win steam against Lukashenko's controversial election victory on August 9.
- The US futures are flat on Tuesday, albeit far from their lows. It did so after the Nasdaq and S&P 500 made gains yesterday, with technology stocks – Amazon, Spotify and Microsoft – ahead of the game.
- Tesla shares closed 11% to a new all-time high on Monday after Wedbush analyst Daniel Ives raised his price target to $ 1,900. Tesla's market cap has now surpassed consumer goods giant Procter & Gamble.
- The beleaguered aircraft manufacturer Boeing intends to expand takeover bids for employees in order to reduce the number of employees more than 10%.
- Legislators are still miles apart in their negotiations on a new coronavirus stimulus package. Republicans of the Senate Are you planning to introduce a long shot now stripped-down proposalHowever, don't expect an agreement before September.
- gold continues its impressive run above $ 2,000 / ounce, helped by Warren Buffett join the gold rush.
- The dollar is down. Once again.
- Raw has recovered with Brent on 0.3%.
Risk on … and on
We were looking for a new one S&P 500 record for the last week. And of course that Nasdaq was Mr. Reliable, seemingly making new all-time highs in every trading session. It enclosed 11,144.53 another record yesterday.
This run for the ages where the S&P has risen more than 50% in the past 102 trading daysshares the market professionals. There is a camp that believes stocks are overpriced by almost any historical measure. And then there is the group that thinks central bankers and policymakers have prepared us for further gains.
Brian Levitt, Global Market Strategist, and Talley Léger, Senior Investment Strategist at Invesco, are among those who believe the "risk environment could be here long term".
They set out a number of reasons why this bull run still has legs. For starters, they believe that stimulus measures and loose monetary policy will pump more liquidity into the markets. And they're not too concerned about COVID spikes and the threat of coronavirus lockdowns like we saw them last spring. Most controversially, they see stocks as the best game in town, despite their high ratings.
"While global equity valuations aren't necessarily cheap, they are attractive to many alternatives," they write, adding, "that investors are likely to be willing to pay multiples of earnings over time."
Looking to the future, we see ourselves in a phase of ever higher equity earnings – depending on where you put your money, of course.
"Ultimately," they write, "we expect this new emerging market and business cycle to be among the" longest on record, maybe even better than after 2008. A longer period of slow growth, low inflation, low interest rates and massive policy adjustments are likely to be a time conducive to solid credit and equity performance. "
And since they mention the period after 2008, here is a table (courtesy of LPL Research) of how impressive that period was. Between 2012 and 2019, the S&P hit hundreds of all-time highs:
No doubt most investors would not mind going back to market conditions as we have seen them over the past decade.
I wish everyone a pleasant day. I'll see you here tomorrow.
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