Week Ahead: July 27

Short Description

DAX 30: Time to Shine? The DAX 30 index – an average for the top 30 stocks in Germany – has erased all its 2020 losses. This week I ask the question -Is it time for a rotation into European equities like those in the DAX? I also rundown the economic calendar and cover Q2 earnings from Apple, Amazon and Facebook. Thanks! Rich

Video Script

1
00:00:00,414 --> 00:00:01,648
Hi everyone,

2
00:00:01,673 --> 00:00:06,094
I’m previewing the IMPORTANT
things for TRADERS to watch this week.



3
00:00:06,119 --> 00:00:09,820
I’m putting an extra emphasis
on the DAX 30 INDEX

4
00:00:09,845 --> 00:00:14,216
while I also touch on upcoming
earnings from Apple, Google and

5
00:00:14,240 --> 00:00:18,611
Facebook AND rundown highlights
from the economic calendar.

6
00:00:27,414 --> 00:00:30,383
Since we’re talking about
the stock market in GERMANY

7
00:00:30,408 --> 00:00:33,469
it reminds me of a great German proverb

8
00:00:33,494 --> 00:00:37,117
“Everything has an end
only a sausage has two!”

9
00:00:38,099 --> 00:00:41,130
This rally in the DAX index
will have an end too but

10
00:00:41,155 --> 00:00:44,663
I’ll share why it might not
happen yet, in just a minute.

11
00:00:45,011 --> 00:00:49,058
By the way if you liked my German
proverb please click the like button

12
00:00:49,083 --> 00:00:52,355
it really helps us spread
the word about these videos!

13
00:00:52,380 --> 00:00:55,315
I thought it extra relevant
to talk about the DAX

14
00:00:55,339 --> 00:00:58,275
since we have a lot of
German data out this week.

15
00:00:58,300 --> 00:01:03,480
We start with the IFO where expectations
are set to slip slightly in July

16
00:01:03,505 --> 00:01:07,456
as well as US durable
goods orders on Monday.

17
00:01:07,481 --> 00:01:12,800
There is Australia CPI but the Fed rate
decision will be the big one on Wednesday.

18
00:01:13,260 --> 00:01:17,619
On Thursday there is a host
of German data to monitor including Q2

19
00:01:17,643 --> 00:01:22,002
GDP followed
by preliminary US Q2 GDP.




20
00:01:22,027 --> 00:01:25,313
Finally we round out
the week with China PMIs,

21
00:01:25,337 --> 00:01:29,385
German retail sales
and Eurozone Q2 GDP.

22
00:01:30,212 --> 00:01:32,876
Why the interest in the
DAX Rich? I here you ask.

23
00:01:32,901 --> 00:01:37,407
well for me there are three
things that are interesting here

24
00:01:37,432 --> 00:01:40,931
1) The DAX just turned positive for 2020

25
00:01:40,956 --> 00:01:45,704
2) The 750 billion euro EU
Recovery Fund was just agreed AND

26
00:01:45,729 --> 00:01:52,426
3) Some big investors are calling for a
“rotation” into Europe from the United States.

27
00:01:52,451 --> 00:01:54,709
Let’s take those in order.

28
00:01:54,734 --> 00:01:57,891
The DAX was down 38% in March.

29
00:01:57,916 --> 00:02:02,555
Now it is positive for the year
and within 5% of an all-time high.

30
00:02:02,580 --> 00:02:04,711
That’s its fastest
recovery ever.

31
00:02:04,736 --> 00:02:07,960
Some are understandably
saying we’ve come too far too fast.


32
00:02:07,985 --> 00:02:11,309
But what I think it realy shows us
is that there is still very

33
00:02:11,333 --> 00:02:14,658
strong demand for owning
high-quality companies.

34
00:02:15,143 --> 00:02:18,588
To me that demand makes
sense even with the pandemic.

35
00:02:18,613 --> 00:02:21,244
Because negative interest
rates in Europe make it

36
00:02:21,268 --> 00:02:24,285
unattractive to keep your
money in a savings account.

37
00:02:24,310 --> 00:02:26,375
From an investing standpoint,

38
00:02:26,400 --> 00:02:31,242
the joint issuance of debt in Europe
spreads the risk between member countries.

39
00:02:31,267 --> 00:02:36,164
The argument goes that overseas capital
is now more likely to invest in Europe

40
00:02:36,189 --> 00:02:38,917
because strong economies
like Germany are in

41
00:02:38,941 --> 00:02:42,115
effect bailing out weaker
economies like Greece.

42
00:02:42,316 --> 00:02:45,683
So the DAX index should
benefit since it has some of

43
00:02:45,707 --> 00:02:49,074
Europe’s largest most
stable companies to invest in.

44
00:02:49,099 --> 00:02:53,658
Lastly, big asset management firms
like Blackrock have said that Europe’s

45
00:02:53,682 --> 00:02:58,241
better response to the pandemic and
lower resulting rates of unemployment

46
00:02:58,266 --> 00:03:01,822
makes it a better place to
invest than the United States.

47
00:03:01,847 --> 00:03:06,908
So they predict investors will rotate
from the United States into Europe.

48
00:03:07,600 --> 00:03:09,788
Now before I sign off for today,

49
00:03:09,813 --> 00:03:15,225
mark in your calendar that Facebook reports
Q2 earnings after the bell on Wednesday

50
00:03:15,250 --> 00:03:20,268
and Apple and Amazon post their
Q2 results after the close on Thursday.

51
00:03:20,792 --> 00:03:22,550
Right thanks everyone,

52
00:03:22,575 --> 00:03:24,925
best of luck and make
sure to subscribe to

53
00:03:24,949 --> 00:03:27,645
our channel so you
don’t miss the next video.

54
00:03:28,039 --> 00:03:32,391
Thanks for watching!