With the 2020 US presidential elections 9 weeks away, the US has several important issues on the table and the tension is mounting more and more.
Trump is still on the campaign trail and went today to Kenosha, Wisconsin, a leading city in protests of racial inequality after a black man was shot by a police officer, where he went to emphasize his campaign of “law and order” and congratulated the National Guard for helping to quell the violence and seeking to keep his supporters on side, as in the last elections this state won, but by very little. Joe Biden, Trump’s opponent in this election, has accused him of inciting more violence in American cities affected by police brutality, as well as for lacking of moral leadership.
Meanwhile, the US continues to lead in cases of COVID-19. It currently has 6,062,162 confirmed cases with a rate of 34,156 daily cases, which is a considerable reduction from its peak in July of 77,255 daily cases. There are currently 574 daily deaths, a number that has been constantly declining since its April peak at 2,609 daily deaths and August’s 1,510 deaths per day. There is a total balance of 184,270 deaths to date, with the majority in New York with 32,965 deaths and a total of 2,184,825 recovered, according to the map provided by the Johns Hopkins University Center for Systems in Science and Engineering. How much will the handling of the pandemic and the economic repercussions affect the elections? We will see.
Mark Zuckerberg, president of Facebook Inc, announced that he will donate 300 million dollars to help the electoral process of the United States. 250 million will go to the Center for Technology and Civic Life to provide funds for local states to have the necessary staff, training and equipment, while the remaining 50 million will be given to the Center for Electoral Innovation and Research, which will go to the offices of the Secretary of State throughout the country.
I’m concerned that our country’s election infrastructure faces many new challenges this year because of the Covid pandemic, Zuckerberg wrote in a Facebook post. “There will be historic levels of voting by mail, and increased need for poll workers and equipment to support contact-free voting.Election officials across the country are working hard to ensure that everyone can vote and every vote can be counted — and we want to help make sure they have the resources they need to do this
This Tuesday the PMI indicator for the ISM manufacturing sector was positive for the 6th consecutive time, surpassing the previous report from 54.5 to 56. All eyes are on the data to be published this week; new unemployment benefits claims are expected to fall below 1006K to 950K, ISM non-manufacturing PMI (Aug) is expected to fall from 58.1 to 57.0, Non-Farm Payroll is expected to fall from 1763K to 1400K and the August unemployment rate from 10.2% to 9.8%.
US stocks closed on Monday on a mixed basis as USA30 remains above 28,600 is aiming to breach its high, showing its best performance since 1984 when it reached a historic 29,583. Meanwhile, the USA100 broke and remains above 12,000 , close to its historic high of 12,330, closing August as its strongest month since 2000. The USA500 posted its best performance in August since 1986 with a record high at 3,532.
Likewise, thanks to the weakness of the Dollar, a fall in inventories during August and the production cuts of OPEC+, there was an increase in the price of oil and other raw materials. The WTI reached $43.10 per barrel and Brent rose for the 5th consecutive month at +1.29%, reaching $ 45.87 per barrel.
The Dollar Index (USDIndex), which compares the US currency against a basket of six benchmark currencies, closed down for the 5th consecutive month and has lost nearly more than 10% against other strong currencies since its March high at 103.93. At its current daily low, it touched 91.71, a price that we have not seen since May 2018.
The Dollar Index makes a technical stop at its psychological support of 92.00, leaving the option of a retracement to the resistance that goes from the 61.8% Fibo level at 94.38-95.00 higher than the 200Week SMA, very close to the bullish guideline and the SMA 21W for the price of 96.75. On the contrary, if it continues down without retracement, we have supports at 92.00 below the 61.8% fibo level at 90.24 that forms a stronger support even with the psychological level of 90.00 and that extends to 38.2% at 88.49. If broken, we could see 85.00, a level that we have not seen since Oct 2014.
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Aldo Weidner Zapien
Market Analyst – HF Educational Office – Mexico
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