– Nervousness is maintained in the markets – believes Hubert Stojanowski, director of investment of clients from the Xelion investment home. In his opinion, “the situation is far from normal.”
According to Stojanowski, a good example of the prevailing uncertainty was Wednesday's stock market session in the USA.
– first there were signals of possible alleviation of customs duties on Chinawhich improved the mood, but the later dementia from the administration in Washington slightly cooled the enthusiasm from the initial phase of the session. Such variability only confirms that peace is rather apparent – the analyst assessed.
An analyst about the market situation
According to the expert, “the situation is far from normal”.
– A few weeks ago we observed strong declines, and now we have sudden reflections. These types of fluctuations – two -digit in both directions – do not indicate stability. The market functioning in such conditions cannot be considered healthy, and instability for business is the worst possible scenario – he emphasized.
If something can actually bring some stabilization on the market, it will be in the opinion of Stojanowski “the lasting season of publication of companies' results”.
It will last until the beginning of June. If the reports turn out to be better than expectations, the moods can improve – the analyst said. However, as he noted, “a shadow of political uncertainty is still floating, because one unfavorable message from Washington is enough and all this optimism can fall apart.”
An expert on Donald Trump's activities
Referring to media leaks talking about the influence of Wall Street on the decisions of the administration of the US President Donald Trump, Stojanowski expressed the view that “it is impossible to clearly state whether Trump limited actions under the influence of financial environments, but it is difficult to exclude the existence of informal communication channels.” – This is a policy full of controversy. Some decisions can reconcile the interests of large business groups, which certainly have ways to try to influence the White House – the expert emphasized.
– The independence of the central bank is the foundation of a healthy economy – and this foundation has recently been violated. Public attacks of the president on the head of Fed Jerome Powell, calling him a 'loser', and then withdrawing from these words, introduced great uncertainty. It is difficult to remember the equally open conflict between the US president and the FED in recent decades – added Stojanowski.
In his opinion, “markets and investors tolerate chaos badly – and this is not lacking lately.”
– In public space there is a lack of consistency, decisions are variable, messages contradictory. “Money likes silence” – this is a well -known saying in the world of finance. Meanwhile, the current information and decision chaos means that even a temporary calming down does not give investors a sense of security – said Stojanowski.
Markets and investors in the USA
Financial markets in the United States ended with a Wednesday session with increases, and investors reacted with optimism to signals about possible deesius in commercial tensions between Washington and Beijing, and to alleviate the tone of President Trump's statement.
The American leader announced that United States They temporarily refrain from applying subsequent duties to those countries that will not take retaliation, and expressed the belief that negotiations with China are positive.
Trump also declared that he did not intend to slow down Powell despite earlier public attacks and lowering demands interest rates. The financial market interpreted these statements as a stabilization signal.
Term contracts on the rate of federal funds indicate that there is a 97 % probability that the FED will leave interest rates unchanged at the May meeting.
Source of the main photo: PAP/EPA/Justin Lane