Today is the decisive day for the markets this month, the inflation data will be a very important catalyst. The general picture is negative.
The latest forecasts from the IMF have worsened the mood of investors. Storm clouds gather over the global economy, which bears downside risks. The IMF confirms the GDP growth at + 3.2% in 2022 but revises it down to 2.7% in 2023 (-0.2 percentage points on the July estimates).
"More than a third of the global economy will contract in 2023, while the three largest economies - the US, China, and the European Union - will continue to stall. In short, the worst is yet to come. For many, 2023 will be perceived as a recession"
Said IMF chief economist Pierre-Olivier Gourinchas, underlining how the invasion of Russia continues to destabilize the global economy forcefully. The OECD also certified the slowdown in the global economy 'due to high inflation, a rise in interest rates and a decline in the stock market'.
Among the major OECD economies, the indicators continue to point to a slowdown in growth in Canada, the United Kingdom, and the United States, as well as in the euro area, particularly in France, Germany, and Italy, reads a statement by the OECD. On the other hand, the superindex predicts a 'stable growth momentum' for Japan.
Future Nasdaq 100, Future S&P 500, DAX, FTSE MIB, IBEX 35
Despite the negative news, I expect a rebound in the indices, including the NASDAQ, with the recession already priced into current prices. Markets always price worst-case scenarios four months earlier.
For a rebound, I like the FTSE 100, where there is a clear boost from the Bank of England, which has announced further measures to ensure financial stability in the UK, strengthening its intervention in the long-term bond market.
The rebound will be able to start today with negative inflation data, which will slow down the restrictive policy of the central banks. Otherwise, it will be postponed to next week.
Oil prices are held back by the expectation of a weakening demand due to the monetary tightening in place in the United States.
But there is also news from the health front; in the mining center of Shanxi, in northern China, restrictions on travel have been introduced after discovering some COVID-19 outbreaks.
With last week's big production cut, we will see a price tag of $100 by the end of the year.
Tiscali (BIT:TIS). Excellent rebound for the stock, which has almost made +100% from the lows of the period. We are facing a simple technical rebound due to closing the speculative short positions.
The movement is destined to end. Tiscali has no interesting growth prospects and has problems on the profitability side. The company is unable to make profits.
The title, according to my model, is worth 0.60. We will soon see these values.
Santander (BME:SAN): As written in previous articles, I do not recommend investing in the banking sector at this stage.
Banks are exposed to downside risks from overheating residential real estate markets, with over €4 trillion in loans and advances secured by residential real estate.
There is a risk of running into a large tide of non-performing loans.
According to my model for Santander, the valuation is 1.65; even here, as in the case of Italian banks, there is a lot of room to go down from current prices.
Bitcoin: The European Central Bank is studying ways to settle transactions between banks on a blockchain to maintain control of the money even as lenders switch to distributed digital ledgers.
In reality, this is not good news for Bitcoin, as we are working on setting up a digital ledger based on using cryptographic tokens linked to a conventional currency. Bitcoin has not been named.
Moreover, the response project, the so-called digital Euro, positions itself precisely against Bitcoin. With these conditions, it makes sense to invest in Bitcoin only from a speculative point of view.
The direct correlation with the Nasdaq is strong, so I expect some increases in the months ahead, given that Bitcoin will follow the index.
NVIDIA (NASDAQ:NVDA): The valuation of the stock is very high. Moreover, the whole sector is penalized by the new restrictions on selling semiconductors to Chinese companies.
I do not recommend investing in the sector. The stock, according to my model, is worth $ 110.