However, traders are showing signs that they are uncomfortable on Wednesday.
What’s happening: The price of gold, the main safe haven asset, has surpassed $ 1,776 an ounce and is the highest level in about eight years.
“The technical picture now shows that gold can start the long-awaited offensive at $ 1,800 per ounce,” said Jeffrey Halley, senior market analyst at Oanda.
DAX in Germany dropped more than 2% even when the closely monitored Ifo job survey exceeded expectations and showed that the country’s recovery is ongoing.
Concerns about another wave of infections are rising after applying a new crash in the area around a meat processing factory hit by a coronavirus outbreak in the state of North Rhine-Westphalia, Germany.
US stock futures are also lower due to investors struggling with rising cases in states such as California, Florida, Arizona and Texas. On Tuesday, the country’s largest infectious disease specialist Dr. “You’re essentially pursuing a wildfire,” said Anthony Fauci, if the country does not control the pandemic in the fall.
As countries reopen, the situation in the United States can focus on the global economy. According to the two EU diplomats, the European Union may recommend that member countries prevent Americans from visiting their countries due to the sudden increase in Covid-19 cases.
Remember: Even when investors are taking careful steps, risky assets such as stocks do not show a real deviation. The S&P 500 finished Tuesday at around 40% from its low point on 23 March.
Economists are still concerned about the strength of the recovery, even if there is no increase in situations leading to fresh deadlocks.
Commerzbank’s chief economist Jörg Krämer thinks that recovery in the second half of the year will be moderate despite the upward movement in Germany’s Ifo business environment survey.
The crisis facing America’s shale industry
The American shale oil industry celebrates its 15th birthday at a dangerous moment.
Massive growth from shale turned the US into the world’s leading raw producer. However, the shale industry could not turn the rising barrels into consistent profits and the epidemic turned the world upside down.
What it means: CNN Business colleague Matt Egan threatens low prices, huge debt stacks away from fossil fuels, and capital flight away from fossil fuels, tide bankruptcies and fire sales to larger players.
According to a study published this week by Deloitte, about 30% of US shale operators are technically bankrupt at oil prices of $ 35 a barrel. This means that the future value of these fraudsters is lower than their total debt.
US oil is currently trading at $ 39 to $ 40 a barrel.
Background: With the help of historically low interest rates, US shale oil companies have been able to easily access the capital of investors who have long been impacted by their growth potential. These investments have made it possible to innovate technology, which allows rapid growth of production and more efficient fraudsters.
However, earnings and free cash flow were difficult. According to Deloitte, the US shale industry has been burning over $ 300 billion since 2010.
Ongoing stagnation and stagnant energy prices force large and small oil companies to reduce the value of their once profitable portfolio. This increase in the writing process will have major implications for the industry.
Is the pound an effectively developing market currency?
The British pound is one of the most traded currencies in the world. However, irregular price movements and constant weakness cause some investors to rethink their position in the financial markets.
See here: In a recent note to customers, Bank of America suggested it might be time to treat the pound as a new market currency.
“We believe [the pound] strategies Kamal Sharma and Myria Kyriacou turn into a currency that looks like the underlying reality of the British economy: small and shrinking.
The currency, which has declined 16% against the dollar since the 2016 Brexit referendum, has fluctuated tremendously since March.
Sharma and Kyriacou described their fluctuations as “neurotic at best, incomprehensible at best”. The only currency that investors see more unstable is the Brazilian Real.
The Pound looks particularly vulnerable towards the second half of the year. As a result of the Coronavirus pandemic, the country’s major funding gap is a major risk for the Bank of America. And there are concerns about whether the UK can reach a trade agreement with the European Union – we are not talking about what such an agreement would mean for the British economy.
“Brexit will probably change investors’ view of pounds permanently,” said Sharma and Kyriacou. Said.
The International Monetary Fund’s economic outlook for June announces ET at 9 am.
Also today: The latest data on US raw inventory comes at ET 10:30.
Coming tomorrow: US first unemployment demands are expected to drop to 1.3 million last week. This marks the 12th week of the decline.