How to start the week: analytics and forecasts — 05.10.2020

Fundamental analysis and forecasts for the future

The oil sector continues to weaken


Economic calendar

14:00 UTC

ISM’s US Non-Manufacturing Purchasing Managers Index will be published. The forecast is 56 points. If the real data turns out to be lower, the USD may decline.

Assets for trading: EUR/USD, USD/CAD


Must know

The rate of increase of COVID-19 continues to rise. The coronavirus has already reached American President Donald Trump and his wife, and governments around the world are beginning to recommend working remotely if possible. The number of deaths has exceeded 1 million.

A new wave of tensions in relations between the UK and the EU. Brussels has kept its word and sued the kingdom for breaching the Brexit deal. Let us remind you that the British Parliament passed a law on the internal market, which violates the provisions of the previously reached agreements.

Oil closed its worst week since early September. Despite the reduction in US stocks, Brent blend crude fell more than 6%. The situation causes concern among the oil exporting countries, since they will have to significantly cut budget spending.

Markets also failed to find positive drivers in the US House of Representatives’ approval of the $2.2 trillion economic stimulus package. Obviously, Congress will not approve these measures, as it is controlled by representatives of the Republican Party.

The EU threatens Turkey with sanctions for drilling in the Eastern Mediterranean. Brussels also understands the role of Ankara in the military conflict between Azerbaijan and Armenia. Against this background, the economic situation in Turkey may be shaken.


A fundamental view


The oil industry crisis continues to hit the companies in the sector. The situation is so critical that investors are laying down more negative financial indicators in the upcoming quarterly report, which will be published on October 30.

However, the high dividend yield may still support buyers. In addition, Scotiabank kept its target price for the shares at $45.


Tesla produced over 139,000 electric cars in the third quarter, which was slightly higher than the consensus forecast. Also a positive moment was the noticeable reduction in the cost of electric cars in China and the statement of the head of the federal state of Brandenburg (Germany) that the company’s new plant will be built.


The company’s shares may again appear on the showcase of attractive investment decisions, since the test flight of the Boeing 737 MAX model, which was personally led by the head of the Federal Aviation Agency, was successful.

In addition, last week it became known about the plans of Delta airline to buy out 40 units of this model.


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