Stock market commentary today July 30, 2020
July 30, 2020
“European stocks opened lower on Thursday, despite the Federal Reserve repeating a pledge to use the “full range of tools” to help the US economy recover from the coronavirus crisis.
Fed chair Jerome Powell’s vow to keep interest rates near zero for as long as it takes had lifted US stocks on Wednesday.
But Asian stocks closed lower overnight and it failed to lift leading European indices. Russ Mould, investment director at AJ Bell, said there was “disappointment” among investors at the Fed’s warning recovery depended on the course of the virus.
A flurry of earnings data and concerns over infection rates in many countries also weighed on stocks.”
Today the big economic event is the US GDP Growth Rate QoQ Adv for Q2 expected to be -34.1% comapred to the previous reading of -5%. Any such large number is expected to move the stock market, and odds are that it should add selling pressure.
The Fed is doing whatever it takes to support and boost the US economic recovery. But valuation for stocks should always be taken into consideration. Another factor to monitor is the recent US dollar depreciation towards Euro, British Pound, Japanese Yen. To my financial analysis, this trend is not sustainable, as the economic conditions in Europe, the UK, or Japan do not fully justify this rapid depreciation of the US dollar. And FOMO trading such as in KODK stock recently is too dangerous and unjustified. Caution for investing in stocks is suggested.