December 07, 2020
from Stephan Feuerstein, Editor-in-Chief for Leverage Certificates Trader
| Views: 164
Lack of momentum
The stock markets are treading on the spot. Negative news from the corona pandemic is apparently just as priced in as positive news about the vaccines against the corona virus. In the absence of clear impulses, many investors no longer take any risks shortly before the turn of the year and hold back. But impulses could follow shortly! On the one hand with the subject of “Brexit”, as already mentioned at the beginning. The level could then be pro or con Christmas rally.
To cushion the economic effects of the financial crisis, the central banks opened the money taps over ten years ago. Nothing has changed about that, on the contrary. The European Central Bank is expected to take further expansionary monetary policy steps this week and the US Federal Reserve in the coming week. After all, the corona pandemic and the associated lockdowns are leaving deep marks on the economic cycle, so that supportive measures are still required.
Drive for further rally in the stock markets!
Cheap money has the property that an investment involves fewer risks. Since, on the other hand, the bond market is becoming increasingly unattractive with cheap money and the times for real estate bargains are long gone, liquidity will pour into the stock market. And thus also be responsible for the next rally, which should provide a new boost in the coming year at the latest. Or as André Kostolany aptly put it many years ago: “When interest rates are close to zero, switch off your brain and buy shares!”
We wish you a successful stock market week
Leverage Certificate Traders
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