Oil is falling again. On Monday, April 27th, Brent is approaching $20.30 (-5.2%) amid investors’ concerns that global stocks may yet be overlooked.
Global demand for oil remains weak and that’s quite normal. However, global supply isn’t going down and that’s a major risk. Last week, US Department of Energy reported a solid growth in oil stocks, up to 518.6 million barrels, which is pretty close to the highest reading of 2017, whine the indicator was equal to 535 million.
As one can see, the existence of the OPEC+ agreement and commitment of Texan oil producers to reduce the oil extraction are not enough to calm investors down. As long as the fundamental background, demand in other words, is far from reaching stability, the commodity market will remain very volatile.
Most likely, this week will bring another wave of volatility in oil – the economic calendar is full of important reports.
In the H4 chart, after finishing the first rising impulse at 25.00, Brent is consolidating around this level. Considering the fact that the instrument has broken the descending channel, the main scenario implies that the price may continue the ascending wave towards 35.50. However, this scenario may no longer be valid if the pair breaks 23.60 to the downside. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving to break 0 to the upside, thus indicating further growth inside the uptrend on the price chart.
As we can see in the H1 chart, after finishing the ascending impulse at 25.00 and forming the consolidation range between 23.60 and then 26.55, Brent has completed another descending structure to return to 23.60. Today, the pair may grow to return to 25.00. If the price falls and breaks 23.60, the instrument may correct towards 21.00. However, if the price grows and breaks 26.55, the instrument may continue trading upwards inside the third ascending wave to reach 31.05 and then start a new correction to return to 26.55. From the technical point of view, this scenario is confirmed by Stochastic Oscillator: its signal line is rebounding from 20. Later, the line is expected to grow towards 50 and break it, thus boosting the uptrend.
Disclaimer
Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.
The DAX30 CFD has surprised over the last few days of trading with a relatively stable performance.
This is surprising because of developments in oil markets. The May contract settled at -37.63 USD/BBL last Monday, but the failure to reach a Coronavirus stimulus agreement during the EU summit last Thursday leads to the outlook that the Eurozone GDP faces a potential 5-10% contraction.
In regards to oil, further declines in the upcoming WTI contracts seems likely, resulting in turbulences around the globe. It may come with the US fracking industry facing troubles, insolvencies and bankruptcies, or with the Middle East as Saudi Arabia faces potential political instabilities, etc.
In regards to the lack of unity in the EU, the effectiveness of the ECB’s monetary policy without creating a unified structure to channel this liquidity to where it is needed, and support the badly hurt economy, will go nowhere.
That said, we’d be careful in terms of DAX30 CFD long engagements, even though short-term and technically we stay positive (even though with a neutral touch) as long as the German index holds above 10,100/150 points.
A drop below that level again leaves room for an accelerating drop which targets the region around 9,300 respectively 9,150/200 points in the days to come.
On the upside a push above 10,800 points activates 11,000 points as a next target, opening even further room up to 11,450/500 points:
Source: Admiral Markets MT5 with MT5-SE Add-on DAX30 CFD Hourly chart (between April 3, 2020, to April 24, 2020). Accessed: April 24, 2020, at 10:00pm GMT
Source: Admiral Markets MT5 with MT5-SE Add-on DAX30 CFD Daily chart (between January 10, 2019, to April 24, 2020). Accessed: April 24, 2020, at 10:00pm GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2015, the value of the DAX30 CFD increased by 9.56%, in 2016, it increased by 6.87%, in 2017, it increased by 12.51%, in 2018, it fell by 18.26%, in 2019, it increased by 26.44% meaning that after five years, it was up by 34.2%.
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We have just witnessed an oil price crash like never before taking prices of West Texas Intermediate into deeply negative territory.
The spot price of West Texas, the US benchmark, reached minus US$40.32 a barrel and the May futures price (which is deliverable in a physical form) went to minus US$37.63 a barrel, the lowest price in the history of oil futures contracts.
There has been no better indicator of the extent of the economic impacts of coronavirus. With borders closed and much of the world’s population being urged to stay at home, transport has come to a near halt.
How can a price turn negative?
The industry has not been able to slow production fast enough to counter the drop in demand. The other mechanism that normally stabilises prices, US oil storage, appears to be nearing capacity.
West Texas Intermediate is typically stored at the Cushing facility in Oklahoma which is on the way to being full.
Cushing is said to be able to hold 62 million barrels of oil – enough to fill all the tanks of half the cars in United States.
That’s why prices have gone negative. Traders with contracts to take delivery of oil in May fear they won’t be able to store it. They are willing to pay not to have to take it and have nowhere to put it.
Not all oil contracts went negative. West Texas Intermediate contracts for June and subsequent months are still positive, reflecting a feeling that the supply and demand imbalance will soon be corrected.
Brent, the international price benchmark, remained positive, dropping to US$25.57 – a fall of about 9%. Unlike West Texas Intermediate, Brent deliveries can be put on ships and transported to storage facilities anywhere in the world.
Not confined to the US
There is no guarantee the problems of storage evident in the US won’t spread to other markets.
This is despite the decision of OPEC-Plus (the mainly Middle Eastern member of the Organisation of the Petroleum Exporting Countries plus Russia and other former Soviet states) to respond to the free fall by cutting output by 9.7 million barrels per day, ending the recent duel over production levels between OPEC and Russia.
Adding another element to the COVID-19 story, on March 9, the day of the Black Monday stock market crash, the Chicago Mercantile Exchange reported a new daily record for West Texas Intermediate trading, reaching 4.8 million contracts, surpassing the 4.3 million recorded on September 2019 following the drone attacks on Saudi oil facilities.
The future does not look good. With rising unemployment, stuttering economies, and collapsing financial markets the prospects for substantial recovery in the oil markets seems far away.
The US, these days an exporter itself through shale oil, will suffer in the same way as traditional exporters in the Middle East.
Historically, oil markets have been considered good at predicting recessions, although in this case the causation might go the other way.
At this point the industry might be starting to consider that the best place to store oil is a natural one – leaving it in the ground.
– Precious metals have become the focus of many researchers and traders recently. Bank of America recently raised its target to $3000 for gold (source: https://www.bloomberg.com). In December 2019, we published a research article suggesting precious metals were setting up a long-term pattern that should result in a big breakout to the upside for gold. Every trader must understand the consequences and market dynamics that may take place if Gold rallies above $2500 over the next few months.
An upside price breakout in precious metals that has been predicted by our researcher and dozens of other analysts suggests broad market concern related to future economic growth and global debt. There is no other way to interpret the recent upside price move in Gold. Back in 2015, Gold was trading near $1060 per ounce. Currently, the price of gold has risen by nearly 64% and is trading near $1740. If gold breaks higher on a big upside move (possibly to levels above $2100 initially), this would complete a 100% upside price move from 2015 lows and would set up an incredible opportunity for further upside price legs/advancements.
Before we continue, be sure to opt-in to our free market trend signals before closing this page, so you don’t miss our next special report!
Daily Gold Chart Fib Arcs & Tesla Price Amplitude Arcs
This Daily Gold chart highlights our proprietary Fibonacci/Tesla Price Amplitude Arcs and our Adaptive Fibonacci Price Modeling system. Although the chart may be a bit complicated to understand, pay attention to the GREEN ARC with the MAGENTA HIGHLIGHT near current price levels. This is a key price resistance arc that is about to be broken/breached. Once this level is breached with a new upside price advance, the $2100 price level becomes the immediate upside price target.
These Fibonacci Price Amplitude Arcs have become a very valuable tool for our researchers. They act as price resistance/support bubbles/arcs. When they align with price activity as price advances or declines, they provide very clear future price targets and levels where the price will run into resistance/support. Currently, the Price Amplitude Arc is suggesting that once Gold rallies above $1775, the next leg higher should target the $2000 price level, then briefly stall before rallying to levels above $2100.
Weekly Gold Chart
This Weekly Gold chart highlighting the longer-term price picture paints a very clear picture for Gold traders. Once $1775 has been reached and the Magenta level has been broken, Gold should rally very quickly to levels above $2000, then target levels above $2100 within a few more weeks.
It doesn’t matter what type of trader or investor you are – the move in Gold and the major global markets over the next 12+ months is going to be incredible. Gold rallying to $2100, $3000 or higher means the US and global markets will continue to stay under some degree of pricing pressure throughout the next 12 to 24 months. This means there are inherent risks in the markets that many traders are simply ignoring.
I keep pounding my fists on the table hoping people can see what I am trying to warn them about, which is the next major market crash, much worse than what we saw in March. See this article and video for a super easy to understand the scenario that is playing out as we speak.
If you want to learn more about the Super-Cycles and Generational Cycles that are taking place in the markets right now, please take a minute to review our Change Your Thinking – Change Your Future book detailing our research into these super-cycles. It is almost impossible to believe that our researchers called this move back in March 2019 in our book and reports.
As a technical analyst and trader since 1997, I have been through a few bull/bear market cycles in stocks and commodities. I believe I have a good pulse on the market and timing key turning points for investing and short-term swing traders. 2020 is going to be an incredible year for skilled traders. Don’t miss all the incredible moves and trade setups.
Subscribers of my ETF trading newsletter had our trading accounts close at a new high watermark. We not only exited the equities market as it started to roll over in February, but we profited from the sell-off in a very controlled way with TLT bonds for a 20% gain. This week we closed out SPY ETF trade taking advantage of this bounce and entered a new trade with our account is at another all-time high value.
I hope you found this informative, and if you would like to get a pre-market video every day before the opening bell, along with my trade alerts. These simple to follow ETF swing trades have our trading accounts sitting at new high water marks yet again this week, not many traders can say that this year. Visit my Active ETF Trading Newsletter.
We all have trading accounts, and while our trading accounts are important, what is even more important are our long-term investment and retirement accounts. Why? Because they are, in most cases, our largest store of wealth other than our homes, and if they are not protected during a time like this, you could lose 25-50% or more of your entire net worth. The good news is we can preserve and even grow our long term capital when things get ugly like they are now and ill show you how and one of the best trades is one your financial advisor will never let you do because they do not make money from the trade/position.
If you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Long-Term Investing Signals which we issued a new signal for subscribers.
Ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.
US oil is suffering unprecedented distress, as demonstrated by the benchmark West Texas Intermediate (WTI) crude price crashing into negative territory. This is a “triple black swan” of an oversupply of oil driven by Opec and Russia, COVID-19 demand destruction, and having nowhere to store it.
Oil traders reacted on April 20, the day that May forward contracts for WTI crude were due to settle. Many offloaded their contracts at any price to avoid taking delivery of oil they couldn’t store, and the May WTI price plunged to US$-37.53 (£-30.36). Now attention has turned to the June price, which is just under US$15, still the lowest in decades.
Though prices will rebound, the bigger question concerns long-term viability. US oil companies have feasted on a decade-long diet of rampant liquidity thanks to very low short-term interest rates and quantitative easing. With many able to finance and refinance drilling with a breakeven price of US$40 and above per barrel?, this brought into play lots of shale oil, whose fracking requirements are far costlier than basic onshore oil.
This tripled US oil production in the past decade to become world number one, overtaking Russia and Saudi Arabia. Around two-thirds is shale, which is now in big trouble. Of the 16% of US companies that are “zombies”, meaning cash flow doesn’t cover their debts, a good proportion will be in oil. Oil companies’ loans will be based on assumptions about prices that definitely won’t include the current levels. Companies also finance themselves by issuing corporate bonds at the lowest investment grade. These are vulnerable to being downgraded to junk, causing borrowing costs to rise sharply.
Even “normal” onshore drilling looks challenging today, with over two-thirds of Texas wells uneconomic at prices below US$25 by some estimates. Rigs are shut down as there is nowhere for oil to go, globally.
The value of US energy companies in the S&P 500 has halved in 2020 to US$633 billion, less than half that of Microsoft. Research firm Rystad Energy predicts up to 533 bankruptcies by the end of 2021 if WTI prices average US$20, a massive increase from 2019. So where do things go from here?
The road to Black April
Opec, led by the Saudis, controls substantial portions of global oil. It tries to set oil prices by raising or cutting production. For the past three years, Opec has been making these decisions in a formal alliance with Russia and other nations that is known as Opec Plus.
Two events caused the current crisis. Saudi Arabia flooded the market with oil in March after Russia refused to sanction any further Opec action to raise the price. This caused a price war just when COVID-19 was crushing world oil demand. Prices fell hard.
To some, the Russians and Saudis were playing a “good cop, bad cop” routine to drive US shale out of business, with the Saudis playing protector of global prices and the Russians, wounded by US economic sanctions, refusing to play ball. Either way, both have much to gain by knocking out pricier US shale. Meanwhile, China has been buying up Saudi and Russian oil on the uber cheap, while delaying on promises to buy US oil.
Some say the Saudi-Russia price warriors miscalculated America’s response. President Trump used threats like hefty oil tariffs to secure a new Opec Plus deal to cut production by 10% on April 12. This was bolstered by production cuts from other G20 countries. Yet prices kept falling: arguably the deal was more about allowing Americans to save face rather than seriously committing to production cuts, and therefore higher prices and stability.
With a sniper’s precision, some believe, Saudi oil tankers are timed to reach New Orleans in May to unload a 50 million barrel “oil bomb” into Saudi-owned US refineries. There is precious little space for existing American crude, much less Saudi imports, hence the April 20 historic price drop.
Uncle Sam to the rescue?
Trump has said the US is devising a rescue plan to save its oil industry. As part of its US$2 trillion stimulus package, rescue moves could even include buying stakes in firms, though negotiating with congressional Democrats looks difficult.
An alternative is to “virtually” buy more US oil and await better days, paying production companies to keep it in the ground – possibly by designating this part of the US strategic petroleum reserve. This would help contain jobs devastation and help Trump in vote-rich Texas and other key areas, while pleasing contributors to his campaign war chest. Another option is retaliatory tariffs on Saudi oil refined in America, or even a full ban.
Oil companies are restructuring hastily – assessing the value of reserves, and asking creditors for debt waivers. The US government has helped by extending companies’ ability to offset losses against future tax liabilities, which can make them more attractive to buyers.
Nonetheless, some companies sitting on the priciest oil will get liquidated. In other cases, big creditor banks could take over businesses, or demand mergers and acquisitions, including consolidations.
The biggest uncertainty is how long until the oil price rebounds? With the economy only likely to reopen gradually, demand will stay low for some time while supply remains too high. The futures markets expect WTI to bounce back to the high US$20s by the end of the year, but don’t foresee a return to even US$40 oil until December 2024.
How much US shale oil is worth saving in these straitened circumstances is key. Some estimate as many as 70% of firms will go out of business overall, with some never coming back until oil stabilises above US$50. Others may be taken over by companies prepared to wait for higher prices. As oil historian Daniel Yergin says, “Rocks don’t go bankrupt”. US shale is in a sort of death pageant, and will probably remain that way for the foreseeable future.
After finishing the correction at 1.0844 and then rebounding from this level, EURUSD continues forming the fifth descending wave with the target at 1.0747; it has already completed the descending impulse at 1.0775. Possibly, the pair may form a new consolidation range around this level, which may be considered as a downside continuation pattern. Later, the market may break 1.0760 downwards and continue falling to reach the above-mentioned target or even extend this wave down to 1.0700.
GBPUSD, “Great Britain Pound vs US Dollar”
After completing the correction at 1.2420, GBPUSD is falling towards 1.2300. Possibly, today the pair may reach it and then start a new correction towards 1.2355. After that, the instrument may start another decline to break the short-term target at 1.2255 and then continue moving downwards to reach 1.2190.
USDRUB, “US Dollar vs Russian Ruble”
USDRUB is forming a new descending impulse towards 73.50 and may later grow to reach 75.50, thus forming a new consolidation range. If later the price breaks this range to the downside, the market may resume trading inside the downtrend to break 71.55 and then continue falling with the target at 69.55.
USDJPY, “US Dollar vs Japanese Yen”
After finishing the ascending structure towards 107.97 along with the descending impulse at 107.50, USDJPY is consolidating around 107.60. Possibly, the pair may break the range to the downside to reach 107.17. After that, the instrument may resume growing with the target at 108.55.
USDCHF, “US Dollar vs Swiss Franc”
After rebounding from 0.9710, USDCHF continues growing with the target at 0.9785. Later, the market may correct towards 0.9750 and then form one more ascending structure to reach 0.9800.
AUDUSD, “Australian Dollar vs US Dollar”
After finishing the correction at 0.6400, AUDUSD is falling towards 0.6288. After that, the instrument may correct to reach 0.6340 and then resume trading inside the downtrend with the short-term target at 0.6233.
BRENT
Brent is consolidating around 25.00. Today, the pair may form one more ascending impulse towards 27.05 and then fall to return to 25.00 or even start a new correction with the target at 21.00. However, if the price grows and breaks 27.05, the market may resume trading upwards with the first target at 34.34.
XAUUSD, “Gold vs US Dollar”
Gold is still consolidating around 1729.50. Today, the pair may break the range to the downside and fall with the first target at 1702.70. After that, the instrument may start another growth to reach 1720.40.
BTCUSD, “Bitcoin vs US Dollar”
After reaching the target at 7550.00, BTCUSD is consolidating at this level. According to the main scenario, the price may start a new correction to reach 6700.00 and then form one more ascending structure towards 8500.00.
S&P 500
After finishing the ascending impulse at 2845.0, S&P 500 has completed the correction towards 2772.3. Possibly, today the price may resume growing towards 2927.5 and then start another correction with the target at 2660.5.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
As we can see in the H4 chart, after a short-term pullback and a test of 50.0% fibo, the asset continues the ascending tendency. Another rising impulse has already broken the previous highs and is currently heading towards 61.8% and 76.0% fibo at 7987.75 and 8925.00 respectively. At the same time, the MACD indicator is forming a long-term divergence, which hints at possible reversal. The support is 38.2% fibo at 6440.00. A breakout of this level will be another signal in favor of the trend reversal.
In the H1 chart, the convergence made the pair complete the descending correction and start a new rising wave. At the moment, the price is testing the high it broke earlier. Later, the instrument may continue growing to reach the post-correctional extension area between 138.2% and 161.8% fibo at 7839.00 and 8071.00 respectively.
ETHUSD, “Ethereum vs. US Dollar”
As we can see in the H4 chart, after finishing the pullback and updating the high, ETHUSD is forming a new rising impulse, which is currently re-testing 50.0% fibo. Considering the divergence on MACD, the next and probably the last upside target may be 61.8% fibo at 212.70. The support is 38.2% fibo at 165.90. A breakout of this level will be the key signal in favor of the trend reversal.
In the H1 chart, the price is testing 50.0% fibo. Taking into account the divergence on MACD, one shouldn’t expect the pair to fall towards the support so far, it’s better to wait until the instrument completes its growth.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
The single currency continues to lose ground relative to the greenback. EUR/USD quotes set new local lows. The euro is under pressure due to weak indicators of economic activity in Germany and the Eurozone. The US House of Representatives has approved a $480 billion COVID-19 stimulus bill. At the moment, the trading instrument is testing the support level of 1.0725. The 1.0775 mark is already a “mirror” resistance. We do not exclude a further drop in EUR/USD quotes. We recommend opening positions from key levels.
The Economic News Feed for 24.04.2020
– German IFO business climate index at 11:00 (GMT+3:00);
– Report on durable goods orders in the US at 15:30 (GMT+3:00).
Indicators signal the power of sellers: the price has fixed below 50 MA and 100 MA.
The MACD histogram is in the negative zone and continues to decline, indicating the bearish sentiment.
Stochastic Oscillator is in the neutral zone, the %K line is below the %D line, which also gives a signal to sell EUR/USD.
Trading recommendations
Support levels: 1.0725, 1.0700
Resistance levels: 1.0775, 1.0810, 1.0845
If the price fixes below 1.0725, a further fall in the EUR/USD currency pair is expected. The movement is tending to 1.0700-1.0680.
An alternative could be the growth of EUR/USD quotes to 1.0800-1.0830.
The GBP/USD currency pair
Technical indicators of the currency pair:
Prev Open: 1.23312
Open: 1.23403
% chg. over the last day: +0.08
Day’s range: 1.23045 – 1.23605
52 wk range: 1.1466 – 1.3516
The GBP/USD currency pair is still being traded in a flat. There is no defined trend. GBP/USD quotes are testing the key support and resistance levels: 1.2300 and 1.2375, respectively. The British pound is under pressure amid weak economic releases from the UK. A trading instrument is tending to decline. We recommend opening positions from key support and resistance levels.
In March, retail sales in the UK fell by 5.1%, which is below market expectations at 4.0%.
Indicators do not give accurate signals: the price has crossed 50 MA.
The MACD histogram is near the 0 mark.
Stochastic Oscillator is in the neutral zone, the %K line is below the %D line, which indicates the bearish sentiment.
Trading recommendations
Support levels: 1.2300, 1.2250
Resistance levels: 1.2375, 1.2410, 1.2445
If the price fixes below the round level of 1.2300, GBP/USD quotes are expected to fall. The movement is tending to 1.2260-1.2240.
An alternative could be the growth of the GBP/USD currency pair to 1.2410-1.2450.
The USD/CAD currency pair
Technical indicators of the currency pair:
Prev Open: 1.41612
Open: 1.40741
% chg. over the last day: -0.63
Day’s range: 1.40534 – 1.41094
52 wk range: 1.2949 – 1.4668
USD/CAD quotes have been declining. The trading instrument has updated local lows. The loonie is currently consolidating in the range of 1.4050-1.4120. The Canadian dollar is supported by the recovery of the “black gold” prices. We do not exclude further correction of the USD/CAD currency pair. Today we recommend paying attention to economic reports from the US. Positions should be opened from key levels.
The news feed on Canada’s economy is calm.
Indicators do not give accurate signals: the price has fixed between 50 MA and 200 MA.
The MACD histogram is in the negative zone, but above the signal line, which gives a weak signal to sell USD/CAD.
Stochastic Oscillator is in the neutral zone, the %K line has crossed the %D line. There are no signals at the moment.
Trading recommendations
Support levels: 1.4050, 1.4000, 1.3925
Resistance levels: 1.4120, 1.4200, 1.4250
If the price fixes below the support level of 1.4050, a further drop in USD/CAD quotes is expected. The movement is tending to 1.4000-1.3970.
An alternative could be the growth of the USD/CAD currency pair to 1.4150-1.4180.
The USD/JPY currency pair
Technical indicators of the currency pair:
Prev Open: 107.778
Open: 107.559
% chg. over the last day: -0.14
Day’s range: 107.538 – 107.760
52 wk range: 101.19 – 112.41
The USD/JPY currency pair is still being traded in a prolonged flat. There is no defined trend. Local support and resistance levels are 107.50 and 107.85, respectively. Financial markets participants expect additional drivers. Today, investors will assess statistics from the US. We also recommend paying attention to the dynamics of US government bonds yield. Positions should be opened from key levels.
The news feed on Japan’s economy is calm enough.
Indicators do not give accurate signals: the price has crossed 50 MA and 100 MA.
The MACD histogram is near the 0 mark.
Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which indicates the bullish sentiment.
Trading recommendations
Support levels: 107.50, 107.25, 106.95
Resistance levels: 107.85, 108.10
If the price fixes below the support level of 107.50, USD/JPY quotes are expected to fall. The movement is tending to 107.20-107.00.
An alternative could be the growth of the USD/JPY currency pair to 108.10-108.30.
– Economic and social upheaval plus the collapse of oil prices have pushed responsible and impactful investing further into mainstream finance, affirms the CEO of one of the world’s largest independent financial advisory organizations.
The comments from Nigel Green, the chief executive and founder of deVere Group, come as the global coronavirus emergency continues and as oil prices went negative this week for the first time in history.
Mr Green says: “At the start of 2020 I said that Environmental, Social and Governance (ESG) investing would reshape the investment landscape in this new decade – but this phenomenon has been dramatically and irreversibly accelerated by the current situation.
“Even before the start of the Covid-19 pandemic, ESG investments often outperformed the market and had lower volatility over the long-run.
“What is perhaps more impressive is that those investments with robust ESG credentials are still typically continuing to outperform throughout the coronavirus-triggered stock market crashes where major indices were extremely volatile, with some plummeting 20 per cent.
“Clearly, this is going to increasingly attract both retail and institutional investors seeking decent returns in turbulent times.”
He continues: “The collapse of oil prices, which are likely not to rebound to pre-crisis levels in the short-term, has also helped drive ESG investments to the top of the performance charts and keep them there.
“This is because ESG funds circumnavigate oil stocks, so their performance will not be adversely impacted by the fall in share prices.
“There is a wider and growing force behind the rise of Environmental, Social and Governance investing,” says Nigel Green.
“The current situation has acted as a wake-up call in many respects.
“It underscores that human health is reliant upon healthy ecosystems; that we need to ensure the sustainability of supply chains; and that those companies with robust corporate governance and good business practice fare better in difficult times and are ultimately best-positioned for the future.
“This growing collective awareness of mutual responsibility fits perfectly into the narrative of ESG investing.”
The deVere CEO concludes: “The collective wake-up call delivered by Covid-19 plus the search for profits in these highly unusual times are catapulting responsible, sustainable and impactful investing into the mainstream.”
About:
deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.
Despite recent volatility in global oil markets, volatility in forex markets remained relatively low, particularly in the USD/JPY. In fact, it seems unlikely that this will change given the pretty thin economic calendar leading up to the weekly close.
Given the drop in the University of Michigan’s consumer sentiment for the US which dropped to 71 in April of 2020 from 89.1, there may be room for surprise. But with expectations for the final print to come in even lower at 68, much of worst-case scenario is likely already priced into the markets, including the USD/JPY.
Still, while the currency pair stays technically choppy, an overall bearish tendency remains.
The main reason for this bearishness is the continuing pressure on 10-year-US Treasury yields, which leaves room in the USD/JPY to test the short-term relevant region of support around 107.00.
A sustainable break wasn’t seen yet, but if we get to see one in the days to come, probably with voices of a bailout of the badly hit US oil industry by the recent turbulence in the oil market growing louder.
A break below 107.00 would technically activate the region around 105.00 as a first target:
Source: Admiral Markets MT5 with MT5-SE Add-on USD/JPY Daily chart (between March 1, 2019, to April 23, 2020). Accessed: April 23, 2020, at 10:00pm GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2015, the value of USDJPY increased by 0.5%, in 2016, it fell by 2.8%, in 2017, it fell by 3.6%, in 2018, it fell by 2.7%, in 2019, it fell by 0.85%, meaning that after five years, it was down by 9.2%.
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