Circularity in buying interest, a defensive tool in the current situation

The market showed yesterday that it has investors who are interested in its image, but also in the restructuring of their portfolios. On the day when there was pressure on the share of EEE immediately after the recording of new highs of the last 12 months in the first week of August, it was the Banks that assumed with their profits the role of compensator of the downturns from the losses of 10 index blue chips.

In this development the motivation was not the balance as many have argued without ruling out that this has also played a role. However, we believe that the global investment industry has established the view that the Fed, together with the Bank of England, will move in time to reduce (tapering) the programs to support economies with bond markets. A policy that has kept interest rates very low for a long time. There is a recent trend to increase US bond yields as data show that the easing of restrictions due to the pandemic has accelerated growth and has already exacerbated inflationary pressures. “There is not much disagreement about a tapering announcement that will come between September and December and will be followed by a real reduction between November and January,” said Rodrigo Catril, senior FX strategist at NAB. However, the rate of decline is still in the air and it will decide when a real rate hike will take place, he said. The Fed is currently buying assets of $ 120 billion a month, so a $ 20 billion reduction will end the program in six months, while an approach of $ 10 billion will take a year.

Energy stocks outperformed the 11 major S&P sectors, falling along with crude prices as rising coronavirus cases and the possibility of a resurgence of restrictions, particularly in China, raised concerns about the prospects for fuel demand. Shares of the financial sector strengthened by the rise in the yield on 10-year US bonds above the level of 1.30%. So there is a change at the international level in the treatment of Bank shares.

The dynamics in the trading in Athens yesterday underlined that the banking sector is treated differently by professional investors. Because apart from the global preference in the industry, the balance sheets of ALPHA, NBG, EUROB and PIR are turning the page. Thus, in the first half hour, these shares may have pushed down as well, as they showed losses that gave the Banking Index a change of -0.52% at the peak of pressures, but finally showed gains of + 1.27%, having a larger intra-conference change of +1.76%. Thanks to this, DG managed a few minutes after 15:00 to rise higher at 895.42 points, with an increase then + 0.22%. So yesterday we had an exchange of roles, as EEE that was pressed precautionarily before the publication of results, was the stock with the greatest weight that pushed downwards. It was accompanied in this by ELPE MOH, which was pressured by foreign institutions in coordination with the movements of all institutions in the global capital market, against the shares in the energy sector. The reason for this was the fall in the price of oil, which was triggered by the data for a decline in its demand.

Regarding the fires, some remarks on the treatment of natural disasters by the stock exchanges. Well there is no market that deals with situations that arise from natural phenomena emotionally. In similar cases, especially in emerging economies, a natural disaster does not affect the course of prices and if it does, it usually pushes them up. Based on the expectation that their treatment will give additional work to companies related to wound healing.

Today there is also an improvement in the price of oil and the shares of energy companies will breathe a sigh of relief. While in the Asian stock markets, gains appeared in key indices small but real. While the futures for the Wall Street indices have marginal losses after yesterday’s small fall after the lifetime records.