Wall-Street: 2 new records but the barrel falls below $50 a barrel

  •   12/02/2020 - 11h00
  •   DEHOUI Lionel

The figures at the beginning of this week are surprising and suggest that the crisis will end in the coming days. To understand this fact, one only has to look at the values of some of the architects of the Nasdaq's evolution: +1.9% for Cisco, Vertex at +2%, Skyworks at +2.5%, +3.5% for Tesla, +4.5% for Nvidia and +5.1% for AMD. With these satisfactory figures, the Nasdaq logically finds itself at the 9,600 mark. Even if this is not the best news in the history of the stock markets, it is still very good news in this first quarter of the year 2020. These figures have come at a decisive and not insignificant time.

Wall-Street: 2 new records but the barrel falls below $50 a barrel
Image copyright: krispdk - Flickr

On the rise despite the ever-present risk of Coronavirus

We should not lose sight of the various measures taken in China a few hours before the previous weekend, as they had a direct impact on the stock market. Indeed, quarantine measures form the basis for the containment of approximately 88 million additional people living on Chinese land. The movement of people and their goods is therefore impacted and the consequences are direct. Since then, China has been resolutely calculating. She even changed her calculation methods.

In the calculations, the Chinese authorities only take into account the inhabitants in case of "declared illness" and hospitalization cases. Cases of people with simple symptoms are no longer considered in the accounts. The Chinese situation thus painted could do absolutely nothing to impinge on Wall-Street's meteoric rise.

Against all odds, this one reversed the upward trend. The information towards the Chinese system is contradictory. Wall-Street has almost already forgotten the slight losses incurred earlier.

In the next few days (February and March), the eyes of market players on international stock exchanges will turn to the economic influence of the coronavirus. Impact assessment will be at the heart of the news. Some strategists working in the coastal banks claim that the reduction in rates and the increase in monetary support from the FED will provide significant support for growth. They are confident that the EDF will do what is necessary.

 

Two records without oil?

At the same time, it is the drastic drop in oil prices that is most worrying today. Indeed, it continues its regression and sinks a new floor. Oil today is -1.4% at $49.65. This brings Devon to -1.9%, Marathon to -2.6%, Occidental Petroleum to -3.3%, Nal Oilwell to -5.4% and Range Resources to -6.4%. It is a fall whose impact is still considerable. That's the least we can say. But the beginning of the week has other more tempting news to deliver to the world of economists: the Dow Jones rallied +0.6% to 29,277 and the Russel-2000 gained +0.54% to 1,665. The Nasdaq stands at 9,628 with +1.13% in line with the S&P500 which gains +0.73% to 3,352. So the last two are at the top of the stock market. These are two records that will remain in the annals for a long time.