News

29.01.2020

CHINESE BLACK SWAN CORRECTS MARKET EXPECTATIONS

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The unexpected arrival of the “black swan” caused a slight correction in the market that had been growing for more than 10 years.

The unexpected arrival of the “black swan” caused a slight correction in the market that had been growing for more than 10 years. “Black swans” are rare and unpredictable, and it is for such cases we provide our clients with 100% insurance. All in all, our portfolio was closed by stop losses.

The main reason for the market correction was the emergence of a new disease in China, which is spreading quickly. Investors are worried that due to measures taken by the authorities of various countries, consumer demand will decrease. Multiple China factories may remain closed until February 10.

Is it all scary? In fact, this is not the first appearance of viruses. In 2003, the SARS virus came from China and took more lives. Now the authorities of all countries, together with the World Health Organization, are developing a vaccine against a new virus. There is already news that a cure can be found by the end of the week. Thus we tend to view current reaction of investors as too emotional with no underlying fundamentals.

On the other hand, the reporting season is starting in the United States. Of the companies that have already reported, 80% showed better then expected financial results. This means that the business is working, profits are growing, and this should be enough for those who are going to buy shares.

In addition, the Fed continues to inject $60-80 billion per month into the market. Interest rates around the world remain at record low, almost zero levels.

As a result, an emotional wave is already fading away. Under the current economic conditions, amid growing company profits, any slightest positive news about the new coronavirus will send company shares to a new rally. Now is the time to buy undervalued stocks at competitive prices.

Moreover, ACB Service is still ready to compensate any potential losses.

Company

Type of transaction

Opening price

Take profit

Stop Loss

Investment period

Forecast income

Boeing

Sell

Market price

$307.00

$322.00

1 month

2.4 %

AMD

Buy

Market price

$52.50

$47.50

1 month

2.6 %

Micron Technology

Buy

Market price

$58.00

$54.00

1 month

1.82 %

Walt Disney

Buy

Market price

$141.00

$133.00

1 month

2.04 %

Visa

Buy

Market price

$207.00

$198.00

1 month

2.16 %


Investment amount ($)

Boeing, lots

AMD, lots

Micron Technology, lots

Walt Disney, lots

Visa, lots

Potential profit ($)

Income (%)

100 000

2,5

8

7

4

4

11 020

11.02

50 000

1,25

4

3,5

2

2

5 510

11.02

30 000

0,75

2,4

2,1

1,2

1.2

3 306

11.02


Investment period

1 month

Forecast income

11,02 %