How to start the week: analytics and forecasts — 12.10.2020

Fundamental analysis and forecasts for the future

Last week traders focused on oil, which unexpectedly found growth drivers.


Must know

The discussion of new economic incentives in the United States will continue, despite the Trump ending negotiations with representatives of the Democratic Party. This was announced by the country’s finance minister Stephen Mnuchin. Trump’s position was probably influenced by the report on the increase in the number of applications for unemployment benefits.

Norwegian oil workers striking, as well as the anticipation of Hurricane Delta, have become factors supporting oil prices. After Trump pulled out of talks on economic stimulus, traders were betting on a continuation of the bearish trend. However, oil closed the week with an increase of almost 10%.

London outlined its next steps to negotiate a trade deal with the EU. Boris Johnson said that if the parties do not make progress this week, it will be possible to completely stop the negotiation process.

Following the results of a two-day meeting, the US Federal Reserve head Jerome Powell said that GDP growth rate recovery in the third quarter is progressing rapidly. However, the COVID-19 pandemic continues to impact the economy.

The Reserve Bank of Australia signaled it would ease monetary policy. This happened immediately after the country’s financial plan was published, which showed a record increase in the budget deficit.


A fundamental view


Last week, a senior IT industry executive announced plans to spin off the managed infrastructure services division into an independent public company. The corporation is taking such a step so that the new company can focus on the tasks of the direction. The news caused a stir in the stock market. At the time, the securities rose 8%. It is possible that the trend will continue.


The company’s management announced sales growth in the third quarter and promised to increase the size of dividend payments. Meanwhile, BofA Securities raised its target value for the fast-food chain to $250.


The company Square, which develops payment infrastructure, invested about $50 million in the purchase of bitcoin. The organization’s CFO, Amrita Ahuja, said that the demand for cryptocurrency could grow significantly in the future. Note that Square is owned by Twitter founder Jack Dorsey.

There has been talk for a long time that Bitcoin is facing a strong bullish trend. Bloomberg analyst Mike McGlone predicts growth to $100 thousand by 2025.


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