“Let's stop criticizing our banks!”

More than ten years after the subprime mortgage crisis, all the light has not been shed, and yet the idea of ​​the guilt of the banks has taken hold firmly in people's minds. They are even blamed for the double fault, since after playing with fire and triggering the crisis, they allegedly asked for help from the States. This unanimous condemnation, the result of incomplete analyzes, is a heavy component of the bank bashing that has raged since then and unfortunately works against our interests. We are indeed at a critical moment when Europe, faced with the domination of American finance and the dollar, must develop its own financial capacities. The development of a strong pan-European financial sector is therefore essential if we particularly want to foster the emergence of future European gafas. 
If it is vain to hope for the complete disappearance of this bank bashing and, one might say, of the bashing market whose roots plunge both in history and in ignor…

Will Stocks on Wall Street Benefit from a New New Deal? : Stock market advice

If the surge in equities on Wall Street is surprising, despite the shock to the economy and uncertain prospects, the extent of support given in recent months and the hopes on what could still be implemented constitute a waist support. 

Will Stocks on Wall Street Benefit from a New New Deal? : Stock market advice

Wall Street seems to defy the laws of gravity. While the flagship equity index has just posted a new record (at the margin though), the Nasdaq has enjoyed wild growth since the major low in March, well above the high in February. And yet, the current state of the US economy is really cause for concern… “The devastating effects of the coronavirus and the collapse in oil prices have plunged parts of the economy into conditions of slowdown not seen since the Great Depression . With more than 40 million Americans unemployed and one in five households in a situation of food insecurity, the American economy is facing serious difficulties ”, notes Jim Lydotes, portfolio manager at Mellon, a subsidiary of the American giant. BNY Mellon Investment Management asset management. 

The United States' response to the crisis has been significant. In March, “the Senate passed a $ 2 trillion emergency aid plan and the US Federal Reserve acted by cutting interest rates to zero, relaunching large-scale asset purchases and by launching new initiatives - sometimes up to one per week. All of this has led some to speculate that the United States may be on the verge of the full scale introduction of a New Deal to boost the national economy and get America back to work ”, underlines the manager. The New Deal of the 1930s was nothing more than an infrastructure pact. The Works Progress Administration (WPA) created by the Roosevelt administration has notably built “650,000 miles of roads, 78,000 bridges, 125,000 civilian and military buildings, and built or improved 800 airports,” the expert reports.

Can the US administration really reiterate the scale of this success by investing itself in major infrastructure? “Some new major infrastructure projects could be linked to the economic consequences of the pandemic”, judges the manager. His optimism stems in part from the fact that, despite deep political divisions in the United States, infrastructure renewal is an area that enjoys broad support from all parties. "As we start to look beyond the Covid-19 pandemic, and unemployment is expected to rise higher and higher, there is no doubt that more and more people are talking again about infrastructure and the potential of a New Deal program for public works and investments, ”he said.

What does technical analysis say?

Despite an already exceptional run since the major low last March, "in daily data, the trend is up on the SP500," notes Daniel Cohen de Lara, president of the French Association of Technical Analysts (AFATE). “The upper Bollinger Band is resolutely bullish, as is the 20-day moving average (20-session moving average). The 13-period exponential moving average (MMe 13) has been providing price support permanently since the start of the rally that began on July 1, ”explains the expert. A new historic high was registered in session on August 19.

A new support “has just been created at 3.353 points, the current headquarters of MMe 13: buyers have shown themselves to be present at this level”, notes Daniel Cohen de Lara. The momentum has slowed for a few days and profit taking as we approach the old all-time high of 3.393 “have legitimately occurred but the RSI remains favorable”, he said. The rise could now continue - at a more moderate pace than between July 1 and August 10, however - and a new all-time high remains possible. Support levels are at 3.353 then the 3.306-3.321 gap area.