Overview of TOP weekly news 24.3.2021

24 / 03 / 2021
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The volume of banknotes in the economy grows

Covid-19 supported the use of payment cards and online payments, which supports the established trend of declining cash volumes. The amount of cash in the European economy has almost doubled in the last 10 years. At the end of 2020, more than 1.4 trillion euros were in circulation. That was 11 per cent more than a year ago. However, only a fifth of this was used for intra-euro area transactions.

The ECB records the volume of cash assets outside the euro area. (around 30 to 50 per cent) Developing countries are the main holders of the euro, due to underdeveloped payment structures and a lack of credible savings opportunities.

Historically, the highest increase in cash was recorded in 2008 due to the collapse of Lehman Brothers Holdings.

The most-watched US macroeconomic events

The most-watched meeting among investors of the week is established on Tuesday and Wednesday. Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen testify before Congress, which in turn sets the direction and clarifies the state of the US economy. We can expect economies and the importance of fiscal and monetary stimulus in recovering from a pandemic.

However, the issue is the communication of interest rate yields, which have climbed to the highest level in more than a year. Jerome Powell, on the topic of the Fed’s stimulus, will answer that support will last “as long as necessary” because until the economy reaches pre-pandemic levels. Another interesting topic will be the labour market, which is currently still at 6.2% and the pre-pandemic level is still a long way off.

An IPO that disappointed

Shares of Chinese internet company Baidu fell on the first day on the Hong Kong Stock Exchange. According to analysts, the reason for the poor performance reflects investors’ concerns about the excessive number of new IPOs on the stock exchange, as well as doubts about the company’s ability to continue to grow strongly. [1]

Commenting on Baidu’s development, LightStream Research analyst Shifara Samsudeen said: “We think it will take several more quarters for the market to properly appreciate Baidu’s efforts to engage in the cloud and elsewhere and rate the stock as a comprehensive online title.”

Baidu made its Hong Kong debut at and ended at Hong Kong Dollars at $252. Subsequently, the company secured $3.1 billion in the secondary market.[2]

Positive outlook for Netflix

Argus has announced its recommendation to buy the company with a price target of $650. Argus’ target for Netflix is ​​20% higher than the current share price. During the pandemic, Netflix had grown tremendously as people worked from home and used their time to watch movies and series. This habit of subscribers is unlikely to disappear soon.*


Performance of Netflix’s shares (Source of the graph: Tradingview) [3]  

AstraZeneca screening by the US Health Agency

The US health agency has asked AstraZeneca for new data on the effectiveness of the vaccine, which calls into question its plan to apply for a US permit for emergency use of the vaccine in the coming weeks. The Agency expressed concern by providing outdated information from the study, which may have provided an incomplete view of the vaccine efficacy data.

Performance of AstraZeneca’s shares (Source of the graph: Tradingview) [4]

Watch this week:

Thursday, March 18, 2021

America will report initial jobless claims. Expectations are 730 thousand new applications. *

Friday, March 19, 2021

Germany will publish the Ifo business climate index. The index is expected to increase to 93.2 from 92.4 points in March. *

England will publish the performance of retail sales. Analysts expect 2.1% month-on-month growth in February. *

Source of the text: Investing, Zerohedge, Financial Times, Reuters, Tradingview

[1,2,3,4] Past performance is no guarantee of future results

*     Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or based on the current economic environment which is subject to change. Such statements are not guaranteeing future performance. They involve risks and other uncertainties which are difficult to predict. Results could differ materially from those expressed or implied in any forward-looking statements.

Disclaimer: The content of the Reports constitutes Marketing Communication and does not constitute Investment Advice or Investment Research or an offer for any transactions in financial instrument. The content of the Reports represents the view of our experts on a generic basis, and does not take into consideration individual readers personal circumstances, investment experience or current financial situation. In addition, the Reports have not been prepared in accordance with legal requirements designed to promote the independence of Investment Research, and are not subject to any prohibition on dealing ahead of the dissemination of Investment Research. Readers using the Reports should consider the possibility of encountering substantial losses. The past performance is not a guarantee of future results. Therefore, Goldenburg Group Limited shall not accept any responsibility for any losses of traders due to the use and the content of its Reports.