What does the future hold for the markets in future?

Something similar took place only in March. However, as opposed to March, we do not speak about the liquidity crisis – central banks ‘printed’ a huge volume of money. We rather speak about the confidence crisis.

Players were strongly impressed by the news about a sharp deterioration of the situation with coronavirus, due to which a number of European countries already announced a significant tightening of the quarantine. The leader of the presidential race Joe Biden didn’t rule out such a scenario for the United States.

All these events take place in the background of the pre-election political clinch. Democrats and Republicans failed to agree on the economic assistance package of USD 2 trillion and the issue has been suspended for, at least, a couple of weeks.

Although, the unstated consensus on Wall Street shows that politicians have no chances to kill this program and they would manage to avoid the complete economic lockdown according to the spring scenario. It means that the current retracement, probably, is a temporary phenomenon.

Meanwhile, the third quarter reporting season has passed its culmination stage in the US. The big five – Microsoft, Apple, Amazon, Google and Facebook published their reports. The largest, by capitalization, US companies significantly surpassed forecasts of analysts.

However, it doesn’t seem yet that good quarterly reports outweigh other fears. Thus, the Microsoft stock continued to fall even after an excellent report, published on Tuesday. Investors didn’t like that the company made the Xbox sales forecast worse.

The Nasdaq futures (NQZ0) lost more than 2% on Friday morning. It means that the Apple, Amazon, Google and Facebook reports, published on Thursday after the market had been closed, didn’t improve the investors’ mood. This alerts, since all four companies declared historic records of quarterly earnings. Amazon, which annual yield increased by 37%, is especially prominent.

Uncertainty of players is supported not only by political and epidemiologic determinacy, but also by their specific consequences. Due to deterioration of macroeconomic prospects, a number of major US companies reconsidered their financial forecasts for the future towards deterioration. However, the situation might quickly change after the Presidential election and then stock would quickly win back their losses.

Bitcoin feels itself unexpectedly well on the general background of total sell-outs. The BTC futures (BTCXO) consolidated above the USD 13,000 level and managed to hold it even during peak sell-outs of risk assets. We wrote that the growth of cryptocurrencies was supported during the past week by their inclusion into the list of settlement means of the PayPal wallet.