Market update: Oversold stocks bounce, May proposes second Brexit referendum

22 May

by Mihály Tatár


Good Morning!


  • Stocks bounced on Tuesday (SPX +0.85%, Nasdaq +1.08%, DAX +0.85%, Nikkei +0.10%, Shanghai +0.05%), lazily attributed to Washington’s decision to give Huawei a 90-day reprieve from the ban (giving a gesture to Beijing and also allowing time for US companies to prepare for the cut-off day). But just to be sure that China ’finally gets it’, the US also announced it is proposing to blacklist five Chinese surveillance companies – these are not small ones, Hikvision, for example, is industry leader in AI facial recognition cameras – mass tested on Uygurs -, a 32 billion USD market. In the meantime, in a fresh low for Brexit politics, Theresa May ditched another red line of hers and conditionally proposed a second referendum on Brexit – the market reaction, namely none, tells you volumes about what traders think (GBPUSD 1.2715 – what kind of politicians humiliates Brexit voters and then asks their opinion again? It’s no wonder Nigel Farage’s Brexit Party jumped to the second place in supposedly solid remainer Scotland.) Otherwise, the Dollar waited for Fed signals (EURUSD 1.1145), oil traders took some profit (WTI 62.60, Brent 71.70 USD) with US Secretary of Defense myseriously talking about ’the Iranian threat put on hold’), and the Forint weakening met its first concrete wall (EURHUF sliding to 326 from 327.40, as discussed before, these ’accidents’ are prone to happen with the no-go 330 level approaching).


  • In world politics, Tuesday was definitely surreal (or rather, it was another day of the new normal): A Canadian parliamentary delegation was sent to China to beg for the release of its citizens (good luck’); EU Vice President of the European Commission Frans Timmermans  created a social media uproar when, asked at a tv debate on whether Islam belongs to Europe, he answered that ’(yes), since 2000 years’. (To begin with, Islam is dating itself back for 1400 years, but I understand why socialist Mr. Timmermans is confused, there is another ’religion-thing’ that is in fact 2000 years old, belongs to Europe, and starts with ’C’); while leading Democrats somehow found the time to slam the tv show Game of Thrones as its ending was ’not feminist enough’. (The two female lead characters didn’t end up running the world.) Personally I didn’t like the ending either, but these Democrats better come up with a theme more electable very soon, because Joe Biden is dominating the Democrat field with a brutal margin (Biden 38%, even Bernie Sanders 18.8%, Sen.Elizabeth Warren 8.5%, Sen.Kamala Harris 7%, Mayor Pete Buttigieg 7%). (As a sidenote, it’s worth mentioning that while the majority of Democrats is even more hawkish on China than Trump, Biden has lately become a markedly pro-China candidate. This is partly of his family business – his son had big business there including with surveillance firms – but also to pull in Chinese-American votes.)



Have a nice day,



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