Quiet start of the week, IMF, earnings season and Fed pessimism

The start of the week because of the weekend in Europe turned out to be rather quite. There were no explosions of volatility and big movements in the oil market. There was silence in the foreign exchange market too. In general, it was unusually calm in the informational background as well.

Today is interesting for publishing forecasts from the IMF concerning the prospects for the global economy. Judging by the latest statements from the head of the IMF and her comparisons of the current situation with the Great Depression, there is no need to wait for positive.

In this light, an interview with the head of the Federal Reserve Bank of Minneapolis Neil Kashkarshi looks like a logical continuation of the IMF estimates. The Fed official noted that one can’t count on a V-form scenario (there will be no any instant economic recovery). He believes that the road out of the current situation will be long and hard, and in general it will be possible to talk about something positive only when a vaccine or effective treatment will be invented. Without this, you should not even think about the fact that the economy can return to pre-crisis levels.

So stock market sales and gold purchases remain relevant trading ideas against this background, despite the fact that bulls on the stock market completely justify their name, showing just the same bullish stubbornness in ignoring the economy and continuing to pumping up stock indices.

In the United States, the earnings season is starting today. This week, mainly banks report, but then other companies will catch up. By and large, the crisis will only indirectly hook the current reporting season. The main problems will come in the next quarter. Nevertheless, expect something good and positive is not worth it. This time, analysts can do little to help, because the spread in their estimates is at the level of record highs. In any case, it will almost certainly be a reason to be nervous, rather than sigh of relief. This means the reason rather for sales in the stock market, then for purchases. Given how attractive current prices are for this (+ 25% of the lows of the end of March), we will once again recall the excellent trading opportunity - sell in the US stock market.

The epidemiological situation in Europe, meanwhile, is improving, with some exceptions for example, in the UK the number of deaths exceeded 11K. Although Boris Johnson was discharged from the intensive care unit, we still recommend to buy EURGBP this week and in the nearest future.

In the USA, meanwhile, there is a debate about what to do with the lockdown: to soften and save the economy, hoping that there will be no worse epidemiological plan. Or continue tough measures and thus keep the epidemic under conditional control. By and large, there are no good ways out of the situation on the table now. But in general, May should be the month when the current status quo will be violated to one degree or another. So much more interesting ahead.