Big Day, Fed Decision and Antitrust Hearings

Jul 30, 2020

Today may well become the defining day for the US stock market for weeks ahead. The fact is that on Thursday, the US tech giants, which control almost half of Nasdaq's capitalization, are reporting on the results of the second quarter.

In addition, US GDP data for the second quarter will be released today. The fall is expected to exceed 30%. A figure a few months ago, absolutely unthinkable, may well become a reality. Failure in the consumer sector (recall dozens of bankruptcies in the retail sector, drop in airline revenues by 80-90%, failure in the automotive market, etc., which ultimately led to estimates of a 30-35% reduction in US consumption in the second quarter) ) for an economy where 70% of GDP is generated by consumer demand, means that the figure of -35% in terms of GDP growth rates relative to the same period last year is generally achievable. It is likely that this could bring stock markets back to reality. Naturally, we are talking about a radical reduction in prices there. So today we are actively selling in the US stock market.

Yesterday, the Federal Open Market Committee expectedly left the parameters of monetary policy in the US unchanged. Powell was quite categorical, saying that an increase in rates in the foreseeable future should not be expected.

Meanwhile, the epic with a new stimulus package for the United States continues, and the parties are still moving away from consensus rather than approaching it. This puts pressure on the dollar, which is not going through its best times without it.

The heads of the largest US corporations have been testified in Congress. So far, it has given nothing but news noise.