21 Jun

Mid-Week Technical Outlook: Indices & Commodities

By ForexTime 

A sense of unease gripped financial markets on Wednesday as concerns over China’s growth outlook and sticky UK inflation data left investors on edge ahead of Jerome Powell’s testimony to Congress.

Market players are likely to adopt a guarded approach towards riskier assets amid the cautious mood, resulting in markets trading in tight ranges until a fresh catalyst is brought into the picture. As discussed throughout the week, Jerome Powell is widely expected to reiterate comments from his post-Fed meeting press conference, opening the doors to further rate hikes. If expectations match reality with fresh clues offered on rate hike timings, this could spark volatility across financial markets.

Here are some technical setups to keep an eye on this week:

SPX500_m under pressure

It has been a rough week for the SPX500_m thanks to the risk-off mood and overall caution. Bears seem to be on the prowl with prices slowly approaching the 4351 level. Although the trend still remains bullish on the daily charts, this outlook could be threatened if a solid breakdown and daily close below 4351 is achieved. Such a development could signal a further decline towards 4300. If prices are able to push beyond last week’s high of 4451.5, the next key level can be found at 4500.

NQ100_m breakout pending?

The NQ100_m remains in an uptrend on the daily charts. There have been consistently higher highs and higher lows while prices are trading above the 200-, 100- and 50-day SMA. The price action over the past few days suggests that the index could be waiting for a fresh fundamental spark before embarking on its next move. A solid breakout above 15300 could trigger an incline towards levels not seen since January 2022 around 15700. Should prices remain trapped below 15300, this may see the index sink towards 14670.

STOX50 capped below 4430?

It has been a choppy affair for the STOX50 with prices trapped within a wide range. Strong resistance can be found at 4430 while support can be seen at 4280 and 4230. Should bears switch into higher gear, this may drag prices back toward the 100-day SMA at 4280 and lower. Alternatively, a breakout above 4430 could propel prices to levels not seen since mid-2007 around 4500.

UK100 breakout on horizon…

The UK100 could be gearing up for a major breakout as prices bounce with a tightening range on the daily charts. Support can be found just above the 200-day SMA at 7550 and resistance around 7650. Should prices break above 7650, this could encourage an incline towards 7690 and 7740, where the 100-day SMA can be found. A breakdown below 7550 could see prices sink towards 7440.

Crude rangebound…

Oil prices remain trapped within a range on the daily charts with support at $67.00 and resistance at $74.40. A solid daily close below $67.00 may open the doors toward $64.50. Should prices push above $74.00, this could encourage an incline toward $76.80.

Calm before gold storm?

Gold prices remain under pressure ahead of Jerome Powell’s two-day hearings before Congress which kicks off today. Despite trading within a range on the daily timeframe, the scales of power seem to be swinging in favour of gold bears. A breakdown below $1932 could open a path toward $1893. Alternatively, a rebound back above $1959 may see prices retest the $1985 resistance. Should prices break above $1985, the next key level of interest can be found at $2000.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Stock Market News
21 Jun

The unexpected rise in US real estate market activity has heightened expectations for a more hawkish stance by the Fed

By JustMarkets

The US single-family home construction jumped in May to its highest level in more than a year, and the number of permits issued for future construction also rose, indicating that the housing market is not yet feeling the pressure of high-interest rates and increasing the likelihood of another rate hike from the Fed. This sentiment is putting pressure on investors, so the stock market has seen profit-taking.

At the close of the stock market yesterday, the Dow Jones Index (US30) decreased by 0.72%, and the S&P 500 Index (US500) lost 0.47%. The NASDAQ Technology Index (US100) closed negative by 0.16% on Tuesday.

Today, traders will be watching Fed Chairman Jerome Powell’s speech on monetary policy before the US House Finance Committee. Any hawkish statements could intensify the sell-off in stocks.

Equity markets in Europe were mostly down yesterday. German DAX (DE30) decreased by 0.55%, French CAC 40 (FR40) was down by 0.27%, Spanish IBEX 35 (ES35) added 0.13%, British FTSE 100 (UK100) closed negative yesterday by 0.25%.

The Organization for Economic Cooperation and Development forecasts 6.9% annual inflation in Great Britain this year, the highest among all advanced economies. The data indicated continued labor market tightness, strong underlying inflationary pressures, and a mixed but surprisingly steady GDP growth momentum. Economists now expect the Bank of England to extend its tightening cycle and raise interest rates to a higher level than previously expected.

The European Central Bank has completed most of its interest rate hikes, and possible further increases will be less important for fighting inflation than the duration of monetary tightening, Bank of France Governor François Villeroy de Galhau said yesterday. The policymaker’s comments diverged from those of other ECB officials, who warned that a hike may still be needed in the fall.

Asian markets traded yesterday without a single dynamic. Japan’s Nikkei 225 (JP225) increased by 0.06% for the day, China’s FTSE China A50 (CHA50) was down by 0.60%, Hong Kong’s Hang Seng (HK50) lost 1.54% by Tuesday’s end, and Australia’s S&P/ASX 200 (AU200) jumped by 0.86% by the day.

According to current forecasts, the Bank of Japan expects the recent rise in core consumer inflation, driven by rising costs, to decline in the coming months but to recover again due to strong demand and wage growth. Minutes from the Bank of Japan’s April meeting showed that nine of the ten board members were not going to change their ultra-soft policy in the near term.

HSBC on Tuesday lowered its forecast for China’s economic growth this year, citing resistance in the real estate sector and declining business and consumer confidence. The global bank now forecasts that China’s gross domestic product (GDP) will grow by 5.3% in 2023, down from the 6.3% previously expected. Last week, brokerage firms, including JP Morgan and BofA Global Research, lowered their growth forecasts for the country’s economy after the country’s May industrial production and retail sales growth failed to meet forecasts.

S&P 500 (F) (US500) 4,388.71 −20.88 (−0.47%)

Dow Jones (US30)34,053.87 −245.25 (−0.72%)

DAX (DE40) 16,111.32 −89.88 (−0.55%)

FTSE 100 (UK100) 7,569.31 −19.17 (−0.25%)

USD Index 102.54 +0.02 (+0.02%)

Important events for today:
  • – Japan BoJ Monetary Policy Meeting Minutes (m/m) at 02:50 (GMT+3);
  • – UK Consumer Price Index (m/m) at 09:00 (GMT+3);
  • – UK Producer Price Index (m/m) at 09:00 (GMT+3);
  • – Canada Retail Sales (m/m) at 15:30 (GMT+3);
  • – US Fed Chair Powell Testifies at 17:00 (GMT+3);
  • – US FOMC Mester Speaks at 23:00 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
21 Jun
Top 10 Most Traded Currencies in the World

Why US ‘dollar doomsayers’ could be wrong about its imminent demise

By Daniel Gros, Bocconi University 

The position of the US dollar in the global league table of foreign exchange reserves held by other countries is closely watched. Every slight fall in its share is interpreted as confirmation of its imminent demise as the preferred global currency for financial transactions.

The recent drama surrounding negotiations about raising the limit on US federal government debt has only fuelled these predictions by “dollar doomsayers”, who believe repeated crises over the US government’s borrowing limit weakens the country’s perceived stability internationally.

But the real foundation of its dominance is global trade – and it would be very complicated to turn the tide of these many transactions away from the US dollar.

The international role of a global currency in financial markets is ultimately based on its use in non-financial transactions, especially as what’s called an “invoicing currency” in trade. This is the currency in which a company charges its customers.

Global network of supply and trade

Modern trade can involve many financial transactions. Today’s supply chains often see goods shipped across several borders, and that’s after they are produced using a combination of intermediate inputs, usually from different countries.

Suppliers may also only get paid after delivery, meaning they have to finance production beforehand. Obtaining this financing in the currency in which they invoice makes trade easier and more cost effective.

In fact, it would be very inconvenient for all participants in a value chain if the invoicing and financing of each element of the chain happened in a different currency. Similarly, if most trade is invoiced and financed in one currency (the US dollar at present), even banks and firms outside the US have an incentive to denominate and settle financial transactions in that currency.

This status quo becomes difficult to change because no individual organisation along the chain has an incentive to switch currencies if others aren’t doing the same.

This is why the US dollar is the most widely used currency in third-country transactions – those that don’t even involve the US. In such situations it’s called a vehicle currency. The euro is used mainly in the vicinity of Europe, whereas the US dollar is widely used in international trade among Asian countries. Researchers call this the dominant currency paradigm.

The convenience of using the US dollar, even outside its home country, is further buttressed by the openness and size of US financial markets. They make up 36% of the world’s total or five times more than the euro area’s markets. Most trade-related financial transactions involve the use of short-term credit, like using a credit card to buy something. As a result, the banking systems of many countries must then be at least partially based on the dollar so they can provide this short-term credit.

And so, these banks need to invest in the US financial markets to refinance themselves in dollars. They can then provide this to their clients as dollar-based short-term loans.

It’s fair to say, then, that the US dollar has not become the premier global currency only because of US efforts to foster its use internationally. It will also continue to dominate as long as private organisations engaged in international trade and finance find it the most convenient currency to use.

What could knock the US dollar off its perch?

Some governments such as that of China might try to offer alternatives to the US dollar, but they are unlikely to succeed.

Government-to-government transactions, for example for crude oil between China and Saudi Arabia, could be denominated in yuan. But then the Saudi government would have to find something to do with the Chinese currency it receives. Some could be used to pay for imports from China, but Saudi Arabia imports a lot less from China (about US$30 billion) than it exports (about US$49 billion) to the country.

The US$600 billion Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, could of course use the yuan to invest in China. But this is difficult on a large scale because Chinese currency remains only partially “convertible”. This means that the Chinese authorities still control many transactions in and out of China, so that the PIF might not be able to use its yuan funds as and when it needs them. Even without convertibility restrictions, few private investors, and even fewer western investment funds, would be keen to put a lot of money into China if they are at the mercy of the Communist party.

China is of course the country with the strongest political motives to challenge the hegemony of the US dollar. A natural first step would be for China to diversify its foreign exchange reserves away from the US by investing in other countries. But this is easier said than done.

There are few opportunities to invest hundreds or thousands of billions of dollars outside of the US. Figures from the Bank of International Settlements show that the euro area bond market – a place for investors to finance loans to Euro area companies and governments – is worth less than one third of that of the US.

Also, in any big crisis, other major OECD economies like Europe and Japan are more likely to side with the US than China – making such a decision is even easier when they are using US dollars for trade. It was said that states accounting for one half of the global population refused to condemn Russia’s invasion of Ukraine, but this half does not account for a large share of global financial markets.

Similarly, it shouldn’t come as a surprise that democracies dominate the world financially. Companies and financial markets require trust and a well-established rule of law. Non-democratic regimes have no basis for establishing the rule of law and every investor is ultimately subject to the whims of the ruler.

When it comes to global trade, currency use is underpinned by a self-reinforcing network of transactions. Because of this, and the size of the US financial market, the dollar’s dominant position remains something for the US to lose rather for others to gain.The Conversation

About the Author:

Daniel Gros, Professor of Practice and Director of the Institute for European Policymaking, Bocconi University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 

Financial News Opinions
21 Jun

How Germany’s Economy is Turning Ugly

This economic gauge “dipped back below zero in less than a year”

By Elliott Wave International

In November 2020, when fears were rampant over a second wave of the coronavirus pandemic, the president of the European Central Bank called for economic stimulus (Reuters):

Facing gloomy outlook, Lagarde calls for unlocking EU aid

In December of 2020, what is known as the Next Generation EU package became operational. This economic aid was massive, amounting to more than €2 trillion at current prices.

But you wouldn’t know it by looking at what’s going on in Germany. It took just 24 months for the European Union’s largest economy to resume its decline.

Here’s an overview from the June 2023 Global Market Perspective, a monthly Elliott Wave International publication which covers an array of financial markets:

German manufacturing orders (top left) dipped back below zero in less than a year. Industrial orders (bottom left), which had already rebounded before stimulus was enacted, returned to their old growth rate within 18 months.

Meanwhile, producer prices (middle column) fell to 4% yearly growth in April — down from 46% in August 2022 — while wholesale prices, which tend to lead the consumer-prices indexes, have dipped below zero for the first time since December 2021. … The two ZEW surveys shown in the right column reflect sentiment among institutional investors. Their views about the economy’s current situation (top) and its future growth prospects (bottom) are declining from multi-year highs.

As Bloomberg reported on May 25:

Europe’s Economic Engine Is Breaking Down
Germany is at risk of a long, slow decline — with consequences for the whole of the EU

But what about other major economies in the European Union, as well as Britain?

Indeed, what does the economic picture look like in the world’s two biggest economies, the U.S. and China?

Our Global Market Perspective covers 50-plus financial markets as well as the world’s major economies.

Elliott Wave International’s main way to analyze these 50 financial markets is to employ the Elliott wave model.

If you’d like to get insights into Elliott wave analysis, read Frost & Prechter’s Wall Street classic, Elliott Wave Principle: Key to Market Behavior. Here’s a quote from the book:

The Wave Principle is governed by man’s social nature, and since he has such a nature, its expression generates forms. As the forms are repetitive, they have predictive value.

Sometimes the market appears to reflect outside conditions and events, but at other times it is entirely detached from what most people assume are causal conditions. The reason is that the market has a law of its own. It is not propelled by the external causality to which one becomes accustomed in the everyday experiences of life. The path of prices is not a product of news. Nor is the market the cyclically rhythmic machine that some declare it to be. Its movement reflects a repetition of forms that is independent both of presumed causal events and of periodicity.

The market’s progression unfolds in waves. Waves are patterns of directional movement.

If you’d like to read the entire online version of the book for free, you may do so once you become a member of Club EWI, the world’s largest Elliott wave educational community.

A Club EWI membership is also free and allows for complimentary access to a wealth of Elliott wave resources on investing and trading.

Join Club EWI now by following this link: Elliott Wave Principle: Key to Market Behavior.

This article was syndicated by Elliott Wave International and was originally published under the headline How Germany’s Economy is Turning Ugly. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Economics & Fundamentals Financial News
20 Jun

China’s central bank has lowered its interest rate. Bank of England prepares to raise borrowing costs

By JustMarkets

The US stock indices did not trade yesterday due to the bank holiday.

According to the CME FedWatch tool, there is currently a 74% chance of a 25 basis point rate hike at the Fed’s next meeting in late July. But then the markets see a 78% chance that rates will remain unchanged.

The US Secretary of State Anthony Blinken concluded his visit to Beijing on Monday with a surprise meeting with Chinese President Xi Jinping. The latter stressed the importance of sustained relations between the two countries after a period of simmering tensions. During the meeting at the State Guest House, Xi said that the world needs a “generally stable” Sino-American relationship. Xi Jinping also added that the future and fate of humanity depend on whether the two countries can find the right path. The Chinese foreign minister also urged Washington to abandon the so-called “China threat theory” and lift sanctions against Beijing and no longer stifle China’s technological development.

Stock markets in Europe were mostly down on Monday. German DAX (DE30) decreased by 0.96%, French CAC 40 (FR 40) lost 1.01%, Spanish IBEX 35 (ES35) decreased by 0.66%, and British FTSE 100 (UK100) fell by 0.71% yesterday.

The Eurozone will get its first view of how June is shaping up in terms of economic activity when the PMI data is released on Friday. Last month’s reports were dismal, as surveys showed slower growth in services and sharper declines in manufacturing. On the positive side was a decline in inflation expectations. And so far, there are few signs that activity has increased.

After some unwelcome inflation and wage data, markets now expect the Bank of England to raise rates above 5% in the coming months, even though inflation forecasts point to a marked reduction in price pressures over the summer.

Crude oil prices fell Monday on concerns that a fragile economic recovery in China will hit demand from the world’s biggest crude importer in the second half of the year. But from a broader perspective, the analyst community still expects significant shortages in the coming months.

Uncertainty over interest rate hikes combined with mixed signals of a potential recession this year kept gold in a tight trading range last month. Gold came under pressure after the US Federal Reserve raised its peak rate. Gold has an inverse correlation with the US dollar and government bond yields. Tightening monetary policy tends to push the dollar higher and push government bond yields higher, which is negative for precious metals. But analysts believe that since the US Federal Reserve is at the end of its tightening cycle, gold has a good chance of rising before the end of the year.

Asian markets traded mostly in negative territory yesterday. Japan’s Nikkei 225 (JP225) was down by 1.00% for the day, China’s FTSE China A50 (CHA50) fell by 1.58%, Hong Kong’s Hang Seng (HK50) decreased by 0.64% by Monday’s close, and Australia’s S&P/ASX 200 (AU200) was positive 0.60% by the day.

China cut its benchmark interest rate (LPR) by 10 basis points as Beijing struggled to support the country’s slowing economic recovery. But the move sent a somewhat negative signal to metals markets, given that it underscores the deepening cracks in the Chinese economy, despite the reversal of anti-COVID measures earlier this year.

Reserve Bank of Australia (RBA) Deputy Governor Michelle Bullock said the unemployment rate needs to rise to about 4.5% from its current level of 3.6% to bring the economy back into balance. According to the politician, this will help contain inflation and avoid further rate hikes and a deep recession.

S&P 500 (F) (US500) 4,409.59 0 (0%)

Dow Jones (US30)34,299.12 0 (0%)

DAX (DE40) 16,201.20 −156.43 (−0.96%)

FTSE 100 (UK100) 7,588.48 −54.24 (−0.71%)

USD Index 102.52 +0.28 (+0.27%)

Important events for today:
  • – China PBoC Loan Prime Rate (m/m) at 04:15 (GMT+3);
  • – Australia RBA Meeting Minutes (m/m) at 04:30 (GMT+3);
  • – Japan Industrial Production (m/m) at 07:30 (GMT+3);
  • – German Producer Price Index (m/m) at 09:00 (GMT+3);
  • – Hong Kong Inflation Rate (m/m) at 11:30 (GMT+3);
  • – US FOMC Bullard Speaks at 13:30 (GMT+3);
  • – US Building Permits (m/m) at 15:30 (GMT+3);
  • – US FOMC Williams Speaks at 18:45 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
20 Jun

Brent Crude Oil Price Sees Slight Decline as Energy Demand Concerns Persist

By RoboForex Analytical Department

The price of Brent crude oil commenced the new week in June with a marginal decline, reaching $75.70 per barrel.

Investor uncertainty regarding the expansion of energy demand remains a significant factor restricting the potential for price increases in the “black gold” market. There are currently no clear indications from global economies, particularly the United States and China, suggesting a rapid acceleration in GDP growth. Moreover, various pressures on economies, such as disruptions in the supply chain and subdued consumer demand, further contribute to this situation.

It is worth highlighting the weakened position of the US dollar, which provides some local support for oil prices. During periods of US currency depreciation, commodities tend to become more appealing for investment.

Technical Analysis:

On the H4 timeframe, Brent crude oil appears to be forming the structure of a third upward wave. Currently, it has risen to 76.06, and the market continues to consolidate around this level. There is a possibility of a breakout above this range, leading to the continuation of the third wave towards 79.19. Following the attainment of this level, a corrective pullback to 76.66 cannot be ruled out. Subsequently, there is a potential for further growth towards 80.60. The technical analysis supports this scenario, as the MACD indicator’s signal line has recently broken above the zero level, displaying confident growth towards new highs.

On the H1 timeframe, Brent has already formed an upward wave structure, reaching 76.06. The market is presently consolidating around this level, indicating a pattern of a continued upward trend. The projected target for this wave of growth is 79.30. Technical confirmation is provided by the Stochastic oscillator, with its signal line surpassing the level of 50 and exhibiting steady growth towards 80.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Energy Financial News
20 Jun

Trade Of The Week: Will BoE Decision Push GBPUSD Higher?

By ForexTime 

This will be a big week for Sterling as focus falls on the latest UK CPI figures and rate decision from the Bank of England.

Sterling is the best-performing G10 currency year-to-date, gaining roughly 6% against the dollar thanks to fundamental and technical factors.

Indeed, investor appetite towards the British Pound continues to be supported by the resilience of the UK economy while hot inflation figures have fuelled expectations around the BoE keeping rates higher for longer. Regarding the technical picture, the GBPUSD is firmly bullish on the daily timeframe was prices trading at levels not seen in 14 months as of writing.

The GBPUSD has the potential to push higher this week and here are 3 reasons why:

  • BoE rate decision

The Bank of England (BoE) monetary policy decision will be on Thursday 22nd June. 

24 hours before the BoE decision, the latest UK inflation figures will be published with markets forecasting CPI to cool 8.4%, down from the April print of 8.7%. Given how this is still more than 4 times the BOE’s target inflation rate of 2%, this is likely to keep BoE hawks in the driving seat.

Markets widely expect the BoE to raise interest rates by 25 basis points. This would be the thirteenth straight rate hike, taking the key rate to 4.75%. Given how UK inflation remains sticky along with strong wage growth, the central bank is expected to take rates close to 6% over the coming months.

  • If the BoE strikes a hawkish note and signals further rate hikes, this is likely to push the GBPUSD higher.
  • Should the BoE sound more dovish and expresses concern over the economy, this may send the GBPUSD lower as investors re-evaluate rate hike bets.

 

  • Jerome Powell’s testimony 

Fed Chair Jerome Powell will provide his semi-annual monetary policy report to Congress on Wednesday and Thursday.

Although Powell is widely expected to reiterate comments from his post-Fed meeting press conference, this event still has the potential to trigger dollar volatility due to market sensitivity around rate hike expectations.

  • Dollar bulls could receive a boost if Powell sounds hawkish and offers fresh clues on Fed hike timings. A stronger dollar is seen dragging the GBPUSD lower
  • Should Powell strike a more cautious tone during Testimony, this could deflate the dollar – resulting in the GBPUSD pushing higher.

 

  • Technical forces favour bulls

The GBPUSD remains firmly bullish on the daily timeframe. There have been consistently higher highs and higher lows while prices are trading firmly above the 200, 100, and 50-day Simple Moving Averages. Bulls are currently approaching key weekly resistance at 1.2870 where the weekly 200 SMA resides.

A solid weekly close above this level could encourage an incline towards levels not seen since early April 2022 at 1.3100. Should prices slip back below the 1.2730 level, this may trigger a decline back to 1.2640 and 1.2550, respectively.

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Forex and Currency News Opinions
19 Jun

Stocks: Possible Replay of an Ominous Price Pattern

“I became panicky and covered at a considerable loss…”

By Elliott Wave International

The reason price patterns tend to repeat in the stock market is that investor psychology never changes.

The Elliott wave model directly reflects these largely predictable swings in investor psychology. That’s what the Elliott wave principle is all about.

One of those price moves which has historically fooled investors is the first big rally in a bear market.

These rallies are characterized by an “aggressive euphoria,” as Frost & Prechter’s Wall Street classic book, Elliott Wave Principle: Key to Market Behavior, states.

Why? Because many investors are convinced that the bull market is back.

In Robert Rhea’s 1934 book, The Story of the Averages, he described what was going on regarding the rally in the early months of 1930:

I became panicky and covered [my short position] at a considerable loss. … Nearly everyone was proclaiming a new bull market. Services were extremely bullish.

As you know, the 1929-1932 bear market turned out to be brutal.

A more recent example is what took place during the 2007-2009 bear market. This chart is from a past Elliott Wave Theorist, a monthly publication which covers major financial and cultural trends:

The black arrow indicates the October 2007 top. After the initial leg down, notice that sizeable rally around March 2008. A lot of investors plowed a lot of money into the market at precisely the wrong time. As you can see, the worst of the 2007-2009 bear market was ahead.

These two historic examples of bear market rallies do not mean that we’re on the verge of an exact replica.

But we do see striking similarities between those periods of price history and how the market is behaving here in 2023.

Those similarities include the stock market’s Elliott wave pattern. Frost & Prechter’s Elliott Wave Principle: Key to Market Behavior was referenced earlier. Here’s another quote from this definitive text on the Wave Principle:

Without Elliott, there appear to be an infinite number of possibilities for market action. What the Wave Principle provides is a means of first limiting the possibilities and then ordering the relative probabilities of possible future market paths. Elliott’s highly specific rules reduce the number of valid alternatives to a minimum. Among those, the best interpretation, sometimes called the “preferred count,” is the one that satisfies the largest number of guidelines. Other interpretations are ordered accordingly.

If you’d like to read the entire online version of the book, you may do so for free once you become a member of Club EWI, the world’s largest Elliott wave educational community.

A Club EWI membership is also free and allows for free access to a wealth of Elliott wave resources on investing and trading.

Join Club EWI now by following this link: Elliott Wave Principle: Key to Market Behavior.

This article was syndicated by Elliott Wave International and was originally published under the headline Stocks: Possible Replay of an Ominous Price Pattern. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Financial News Stock Market News
19 Jun

Xi-Blinken meeting: Emerging markets hold growing appeal amid US-China rivalry

By George Prior 

The heightening US-China rivalry is fuelling international investors’ interest in emerging markets, according to the CEO and founder of one of the world’s largest independent financial advisory, asset management and fintech organizations.

The analysis from Nigel Green of deVere comes as U.S. Secretary of State Antony Blinken met with Chinese President Xi Jinping on Monday, amid simmering U.S.-China tensions.

He comments: “The intensifying rivalry between the US and China has significant implications for global markets.

“While this rivalry creates uncertainties and challenges, it also presents opportunities, particularly in emerging markets.

“Our consultants around the world have experienced a significant surge in interest from international investors about these dynamic economies as they seek diversification, growth potential, and reduced exposure to geopolitical tensions.”

The soaring demand from global investors about increasing their exposure to emerging market opportunities comes as tensions rooted in a combination of economic, geopolitical, and ideological factors between the world’s two largest economies and major superpowers continue to make international headlines.

“The economic dimension is a fundamental aspect of the rivalry. China’s rapid rise as a global economic powerhouse and its pursuit of industrial policies that include state subsidies, intellectual property concerns, and market access restrictions have generated tensions with the United States,” explains Nigel Green.

“The US accuses China of unfair trade practices, intellectual property theft, and a lack of reciprocity in market access.”

The rising rivalry also stems from competing geopolitical ambitions. China’s increasing assertiveness in the South China Sea, its Belt and Road Initiative (BRI) aimed at expanding its global influence through infrastructure projects, and its military modernisation have raised concerns among US policymakers.

“The US sees China’s rising influence as a challenge to its own status as a global superpower.”

Technological competition is a critical aspect of the rivalry. The deVere chief executive notes: “Both countries are vying for dominance in emerging technologies like 5G, artificial intelligence, quantum computing, and advanced manufacturing.

“The US has expressed concerns over China’s strategic acquisition of technology, intellectual property theft, and forced technology transfer, leading to initiatives like export controls, investment restrictions, and heightened scrutiny of Chinese tech companies.”

National security considerations also play a significant role in the rivalry with the US viewing China’s military upgrades, cyber espionage activities, and perceived threats to its allies and partners in the Asia-Pacific region as potential challenges to its strategic interests.

One of the key reasons international investors find emerging markets attractive during the US-China rivalry is diversification.

“The rivalry between these two economic giants often generates volatility in global markets, making it sensible for investors to seek alternative investment destinations. Emerging markets provide precisely that,’ affirms Nigel Green.

“By increasing exposure to these economies, investors can reduce their dependency on the performance and fluctuations of US and Chinese markets and, therefore, spread risk across a broader range of regions and industries.”

In addition, emerging markets offer vast growth potential, driven by factors such as expanding populations, rising middle-class populations, and increasing urbanisation.

“These countries present investment opportunities in sectors such as tech, infrastructure, healthcare, and renewable energy – where significant growth opportunities are happening.”

The CEO also emphasises that “non-aligned” economies are also piquing interest among global investors.

“As the rivalry between the US and China escalates, non-aligned states emerge as safe havens, relatively insulated from the direct impact of the tensions,” observes Nigel Green.

“With stable political environments and lower exposure to global power struggles, frontier markets offer investors a degree of stability and reduced risk associated with the US-China rivalry.”

The Association of Southeast Asian Nations (ASEAN) member states, such as Indonesia, Malaysia, Thailand, and Vietnam, are often viewed as non-aligned or neutral in the US-China rivalry.

Several countries in the Middle East, such as Saudi Arabia, the United Arab Emirates, and Qatar, can also be considered non-aligned markets.

Similarly, African nations, including Nigeria, Kenya, and Ethiopia, and Central and Eastern European ones, such as Poland, Hungary, and the Czech Republic.

He concludes: “It’s our experience that investors are increasingly involved in geopolitical hedging.

“These dynamic economies provide avenues to navigate the changing global landscape and capitalise on the potential rewards that emerge amid the ongoing and heightening rivalry.”

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.

Economics & Fundamentals Opinions
16 Jun

George Soros hands control over his family’s philanthropy to son Alex, after giving away billions and enduring years of antisemitic attacks and conspiracy theories

By Armin Langer, University of Florida 

Billionaire investor and philanthropist George Soros is handing control of his US$25 billion holdings, including his Open Society Foundations, to one of his sons, Alexander Soros.

As a sociologist who researches immigrants and minorities in Europe and conspiracy theories about them, I study how Soros became a scapegoat and bogeyman for nationalists and populists and a target of people who harbor and spread antisemitic beliefs.

Baseless conspiracy theories have at times clouded his legacy as one of the world’s biggest donors to causes like higher education, human rights and the democratization of Europe’s formerly communist countries.

Success followed early hardship

Born in 1930 to a Hungarian Jewish family, Soros survived the Nazi occupation and the Holocaust. After World War II, he moved from Budapest to the United Kingdom, where he studied at the London School of Economics while working part time in low-wage jobs. He immigrated to the United States in 1956 and became a U.S. citizen five years later.

In the 1970s, Soros became a successful investor and hedge fund manager. By the 1990s he had amassed a fortune and established himself as one of the world’s most important financiers.

But his dedication to philanthropy and his support for political freedom are what brought him the most attention.

Deep-pocketed philanthropy

In the 1980s, Soros began to contribute to several Eastern European political and social movements that sought to replace communist states with democratic societies. Recognizing the importance of grassroots movements and the power of individuals to bring about change, his support enabled many activists to challenge oppression and advocate for human rights.

He also donated heavily to support education.

Soros’ first philanthropic foray was in 1979, when he funded scholarships for Black students in apartheid South Africa. In the 1980s, he helped promote the exchange of ideas in Communist Hungary by funding visits of Hungarian liberal intellectuals to Western universities.

When he gave $250 million in 2001 to the Central European University in Budapest, it represented, at that time, the continent’s largest higher education endowment.

Soros founded what’s now called the Open Society Foundations in 1993. The name of this international grant-making network was inspired by Karl Popper’s 1945 book “The Open Society and Its Enemies.” Popper argued that individuals thrive in open societies, because they can freely express themselves and test their ideas, while closed societies lead to stagnation.

The broad goal of much of Soros’ philanthropy is to support tolerant societies with governments that are accountable and allow everyone to campaign, protest, donate to candidates they like or even run for office themselves.

Soros’ foundations today support human rights organizations in more than 100 countries. Its initiatives take aim at a wide range of global problems, such as public health emergencies to low economic growth rates in low-income countries.

Soros remains on Bloomberg’s list of the 500 wealthiest people, with a personal net worth in excess of $7 billion as of 2023. But his fortune would have been far larger had he not given some $32 billion to the Open Society Foundations since 1984.

Antisemitic conspiracy myths

The Open Society Foundations’ support for progressive initiatives such as America Votes and Demand Justice have angered many conservatives who don’t agree with the goals of those causes.

Soros’ wealth and influence have also made him a target of numerous conspiracy theories. He’s been demonized as a shadowy puppet master manipulating world events for his own gain. Such baseless accusations often target his Jewish heritage, invoking hatemongering and centuries-old antisemitic tropes.

During the 2015 influx of Syrian refugees in Europe, for example, Hungarian Prime Minister Viktor Orbán accused Soros of a vicious plan of facilitating a supposedly “Islamic takeover of Europe” with the Syrian immigrants.

Former Slovak Prime Minister Robert Fico blamed Soros for being behind press freedom protests in his country after the murder of the investigative journalist Ján Kuciak and his fiancée in 2018.

In 2015, the far-right party All-Polish Youth burned an effigy of Soros dressed as a Hasidic Jew holding an EU flag, even though the philanthropist was raised by a family that was not religious, has never dressed in the style of the ultra-Orthodox Hasidic sect and has not been a major supporter of Jewish causes.

As I explained in a book chapter about nationalism and populism, U.S. conspiracy theories have hounded Soros for years as well. Rep. Kevin McCarthy, a California politician who is now speaker of the House, accused Soros of trying to buy the 2018 midterm elections. National Rifle Association leader Wayne LaPierre accused Soros of planning a socialist takeover of the U.S. in 2018, evoking antisemitic myths from the early 20th century about a Jewish-Bolshevik plot.

That same year, then-President Donald Trump falsely tweeted that Soros was financing the demonstrations against Brett Kavanaugh’s appointment as a Supreme Court justice.

These baseless theories have also inspired extremists to act on them: In 2010, a far-right extremist plotted to attack the progressive San Francisco-based Tides Foundation. His plot failed and ended in a shootout with police officers, and the man was sentenced to 401 years in prison. The extremist falsely believed that Soros used Tides “for all kinds of nefarious activities.”

In 2018, another extremist sent a pipe bomb to Soros’ home in a New York City suburb. Nobody was hurt, but the person responsible was sentenced to 20 years in prison.

Many other far-right extremists have tried to justify their attacks on Jews and other minorities with anti-Soros conspiracy theories – including the man who murdered 10 Black Americans at a supermarket in 2022.

A complex legacy

Not all criticism of Soros is antisemitic.

While I do believe that Soros’ support for freedom and his commitment to empowering marginalized communities are praiseworthy, I also think it’s reasonable to question the sources of his wealth and the methods he employed to accumulate it.

As is true for all billionaires, the Soros family fortune helps perpetuate a system of income inequality and concentrated political influence in the hands of the world’s wealthiest people. I believe that this outsize clout interferes with true democracy.

George Soros has certainly funded work through charitable donations that has fostered democratic values. But his financial support in the political realm, which includes gifts for major Democratic political causes and candidates, such as former U.S. President Barack Obama, former U.S. Secretary of State Hillary Clinton and President Joe Biden, have to a degree made him a polarizing figure.

When megadonors of any political preference make big donations to a candidate or party, their gifts can shape the agenda and distort democratic processes.

In his first interview as the new chair of Open Society Foundations, 37-year-old Alex Soros told The Wall Street Journal that he is “more political” than his father and that he’s likely to make political donations that advance voting rights and abortion rights.

It’s still not clear how Soros’ son aims to put a stop to the demonization of the family’s philanthropic work.The Conversation

About the Author:

Armin Langer, Assistant Professor of European Studies, University of Florida

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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