FOMC minutes, Attack on Internet Giants, Hopes Again

Oct 8, 2020

Financial markets yesterday decided to ignore Trump's decision to close the question of stimulus before the announcement of the US presidential elections results. The explanation for this ignorance is very simple - investors and traders believe that there will be stimulus anyway, maybe partial, maybe not now, but there will be. Commenting on and analyzing the logically emotional plane is generally quite useless. Therefore, once again, we remind that we prefer to stick to the facts. And the facts are that in yesterday's minutes the Fed made it quite clear that the absence of additional financial stimulus would jeopardize the economic recovery. So, we are not going to change our recommendation “sell” in the US stock market.

Moreover, it is worth selling the most overbought companies, which undoubtedly include high-tech giants. An additional argument in favor of this was a report from House pf Representatives that concluded that the big tech companies (Apple, Amazon, Google and Facebook) are abusing their market power. Accordingly, it is recommended to force them to radically restructure their business.

And more about the facts. The wave of bankruptcies in the United States does not even think about fading away. A number of companies held out from the latter, counting on a quick economic recovery, a return to normal life and, accordingly, a sharp increase in demand. Obviously, this is not happening. As a result, this week restaurant chain Ruby Tuesday is filing for bankruptcy and closing 185 restaurants. The company employed about 7,300 employees.

Hurricane Delta, which was so frightened at the start of the week, has weakened to the first category (the week began with category 4), so in light of the latest data on oil stocks in the United States (increased by 0.5 million over the week), oil sales seem to be the only reasonable alternative for trade today.