WHY V-Shaped Recovery Is A MYTH – NO GROWTH IS The Reality [sp 500 Stock Market Technical Analysis]

by birtanpublished on August 4, 2020

In this video i do an update on the s p 500 and why the stock market indices we have a look at the fomc meeting yesterday and the main takeaways we also look at company results from boeing shopify paypal and we have a look at the earnings

Calendar today and some massive economic data coming out today and tomorrow hello everyone it's sasha i hope you're having a good day so let's get straight to it a lot happening yesterday and i'm gonna go through that

In just a minute but watch out today and tomorrow i think this data could really give us a trend for second half of the year so we're gonna get gdp we're gonna have a look at the trend

For jobless claims that's all coming out later today from the us and then tomorrow we've got personal income consumer spending core inflation chicago pmi consumer sentiment so

Massive massive data and again i'm not personally not interested in the the forecast i'm interested in the actual number and the trend and comparing this to previous data for example

What we saw during the great financial crisis so what did we hear from the fed yesterday well it was no surprise really there was no change to anything at all but

Again it's the language is what jerome pals actually saying that was more important and there were a few things i picked up on first of all again he was just talking about tools and toolbox and the normal stuff he has

To say but it was more clear than ever that his main goal here with even with these meetings is just to talk up the market and put confidence back into the market

More so than any actual actions he's taking that was very clear to me yesterday as i as i watched the speech because he said we've got loads of other tools

They can use but he doesn't really have any other tools at all they are doing everything they can he doesn't want to go to negative interest rates so basically he can't do anything with interest rates

Anymore so that's done the only other thing he can do is engage in kind of bond buying and i don't really know how that's actually helped the economic recovery when you look at

The retail recovery for example the only thing that's really helped things like stimulus checks and unemployment benefits that seems to have helped a lot more so that's coming from the government

Rather than the fed so keep that in mind and also he did say disinflation which was interesting i mean remember he would never say deflation but i still think we are in a

Deflationary environment and if you look back through history the big period where we had something similar was the great depression and you get the feeling that that's where we're going to

Be possibly for the next few years so when he makes comments like we are not even thinking about thinking about thinking about increasing interest rates note the reason he's using

That language is because he's talking up the market he wants everybody to be confident in borrowing money but as i explained in the last video even if interest rates are low

You can't force people to like for example those of you watching right now in your country at the moment how can the government force you to go out and take out a loan

They can't do it but please comment below if you have any other opinion on this because i can't see how they can do that they've cut the interest rates to the point that actually having cash in a

Bank is not earning anything it's actually almost becoming a big problem leaving the cash there but still people are not borrowing we talked about kind of credit card rates and the slump

Uh yesterday with news from visa that's not happening at the moment so it's important for us to kind of be aware of that and this is the concern if we get a trend back down now so we've had a bit of a bump a bit of a

Dead cat bounce in terms of people coming out spending the stimulus checks but that all stops and if let's say they have one more round of stimulus checks what's going to happen after that are they going to

Continue to give away free helicopter money i mean one of the questions on the speech was with regards to giving businesses actual grants not loans but he made it clear that the

Fed can only make loans but then another interesting thing when you in my opinion just talking up the markets again he was asked whether the fed can actually buy

Stocks and what he said was i think quite clear that's not in their remit and they can't do that and they've not looked at that so that's fine so that's kind of put a line under it but

Again it was the language he was using he actually said we haven't explored that yet and again i think that was just a way to talk up the markets to make you think that

If they needed to they will run amok by buying you know american airlines and boeing shares and stuff like that and i i actually don't think that's ever going to happen but again he just wants to instill

Confidence so it's understandable where he's coming from but i think they're really struggling at the moment and they're running out of options so what did we see on the calendar before we get to company

Earnings well we've had a few numbers out today so let's have a look at the trend so german gdp was very interesting so we've got some data here so minus 101 was the actual figure so

I mean we expected quarter two to be bad so no surprise there but what is the trend here and if you look back at 2008 2009 you saw numbers horrific numbers at the time of minus 38 you can see as a comparison

How much worse we are now i mean we'll have to wait a few months to see what the bounce back is and there will be a bounce back of course but will it be a certain sharp bounce back or will we get something

Like we saw in 2008 2009 where you can see here there was six or seven consecutive quarters of negative growth here in germany so just something to

Watch out for there in terms of european data and let's just have a quick look at the german unemployment uh numbers as well so so at 292 it's still elevated kind of difficult to see the trend is it

Now starting to trend down it's difficult to kind of see there but again it's still not bad historically but remember especially here in europe a lot of furlough schemes now slowly

Coming to an end watch out for these us numbers later jobless claims gdp etc we're expecting gdp to be a crazy figure forecast is minus 341 that's the most recent forecast in terms

Of results yesterday let's first start with paypal so paypal volume surges with consumers flocking to online shopping so no surprise there but what i've got highlighted here is uh they mentioned

Big competition for e-commerce was cash and now that more and more companies and consumers have experienced that people won't want to handle cash anymore there's been an explosion of digital payments which

Is expected but the payment volume paypal only sees uh this type of number usually during uh thanksgiving and cyber monday between then that's when they see this massive spike up in payment volume but

That's how the whole second of uh quarter actually was and i have a feeling that's uh very likely to continue as a lot of people who are shopping online now they've actually realized that they've

Gone through the hard part of setting everything up for the first time but they've realized that it's actually a lot easier and if you're still fearful about public settings then

There's no reason why that trend can't continue they also mentioned that the firm added three times as many merchants whose platform during a typical second quarter so what at first felt like a potentially short-lived

Phenomenon resulting from initial panic and pantry packing and even stimulus checks has become a much more durable and profound behavioral shift that's what the cfo had said by

The way if you've been enjoying these regular updates especially this week as we've had a lot more news then please click the like button and comment below i appreciate all the support i've had for the channel

And let's have a look at shopify so shopify sales double as merchants forced into online futures so it's the same kind of narrative here shopify nearly doubled its revenue for the second quarter

And just scrolling down i've highlighted a couple of things here so still the company chose not to provide forecast for third quarter citing uncertainty it said it's monitoring the impact of rising unemployment

On new store creation consumer spending habits and the rate at which brick and mortar merchants move online the tech company suspended its forecast full year forecast in april the only concern

I have when it comes to something like this for example for shopify is obviously a lot of people were buying essentials online because they had to now if that changes with all of the reopening

Essentials make up obviously a massive percentage of overall retail sales if that swings back then quarter on quarter i wouldn't be surprised if revenue actually dips significantly for quarter three

Quarter four tends to be busy anyway online because of cyber monday black friday and then the run-up to christmas but i wouldn't be surprised if we get a bit of a reversal in quarter

Three personally finally boeing again this shouldn't be any surprise here but boeing chops output sees 19 000 lost jobs on sagging jet demand now boeing said they delayed the debut of its newest plane and slowed

Production across the heart of its jetliner lineup as the company burned more cash amid the pandemic and they talked about total job losses reaching nineteen thousand this year three 000

More than it said before why this this news is crazy to me is i just don't understand why anybody would be buying a brand new plane right now if there are

Older planes which in perfectly good condition just sitting around not doing anything so this is actual chart of the delivery slump and again i don't see any reason why in the second half of this year this should

Suddenly change a reminder again we're in summer right now it's a busy traveling period so i think airlines will still have a very difficult rest of 2020 and i've just highlighted this part here

Because we're going to come to this in just a second but the burning cache you can see there how much cash boeing actually burning through at the moment you can see it says analysts that expected a drain of 657 billion and

It was uh less than actually expected they only burnt through 563 billion in terms of cash but what greg smith actually says the ceo and this is i found very important he said he saw a

Path to positive cash flow next year for that happened boeing will need to start delivering the 737 max while airlines are reluctant to add new planes but appetite for additional aircraft could rebound sharply

Particularly if one of the multiple vaccines under study bring the pandemic under greater control now i do not agree with that at all and obviously i mean he has to say that

To try and share up the confidence with investors but i don't think that's true even if we get vaccines which we've discussed in this channel could take a lot longer than what they expected even

If that happened look at how complicated everything is at the airports at the moment are we gonna have like vaccine cards and how we're gonna decide who's uh able to travel are there still going

To be all of these quarantine rules even with a vaccine for people who didn't take the vaccine and regardless of all of that this is the important thing when you when you hear jerome powell talking he

Keeps talking about the pandemic and yes i agree that's important but there were economic issues outside of that as well and even now with all of this unemployment

Who can afford expensive vacations and holidays and how will that change towards the end of the year if a lot of these people remain unemployed it doesn't matter if there's a vaccine or not if there's not

Enough demand for air travel why would airlines buy new planes so for me the future of boeing is entirely dependent on how much the government want to bail them out that's my feelings again

Let me know what you think in the comment section below it's definitely an interesting one and in terms of the earnings calendar today this is the big day so we've got all the major major tech stocks and

Again we're just i'm more interested in the trends they see for the rest of the year or any other comments they have on revenue forecasts consumer habits so keep an eye out for that so what do

We see in the s p 500 so we saw a bit of a pump up let me get it onto a 15 minute chart as paul was speaking yesterday and as we actually seen previously before what happens usually after is you get a

Bit of a rollover especially if comments were a little bit dovish which they were so we discussed in the last video the possibility of kind of an extended flat correction sideways seem to have got that now so

I'm just waiting to see here whether we get a breakdown this could have been an impulse wave starting will we get a breakdown of this lower trend line so let me just draw that on so will we

Break through the 3 220 level as we get some of that us data and some of those tech earnings i mean we may get a bit of a spike up a sharp spike up but then it could break down

And then will we actually hold the 3200 level if we do move down so that's kind of the bearish setup here nothing's really changed the high there are three two nine three on futures remains what do we

See on dollar just before we come back to the s p 500 well we saw the dollar move sharply lower still above this kind of long term support so it moved to around 9318 the key for me

Zooming out is um this 94 level here so let me just draw a line over that just here this could be a possible fourth wave handle on the way down so if that's the case and price breaks through there

It's good good probability not guaranteed but if you know if we get up to here and we turn back down then obviously we've still got more downside to come but if we break through that

We could have seen a short-term bottom in the dollar after that sharp spike up yesterday we didn't really see any strong follow-through so it still could all be corrective and we're getting a bit of overlap there as well

But in terms of momentum we are starting to see some divergence between these peaks so is there any shorts and bullish sets up here in the s p 500 any any way we could get back over 3300 let's just have a look at

That let me remove these drawings it's possible from this low you can't absolutely rule out that we may have had a one two one two it doesn't look that way but again

If we break through this level here so this is at in futures this is three two one three if we break down from here then that was very unlikely or if we see a move up from here

And it's leading pattern up so it's possible but i still favor short term anyway a move down i think we could break down below 3200 i mean again it all depends on how the markets react today

Especially i think because of the tech earnings if you have a look at apple and amazon and i just zoomed out to an hourly chart here you can see we we're still underneath that high we

Made on the 13th of july so we've already corrected a decent amount so we're certainly not at all-time highs with apple and amazon so that's just something to note going into earnings

But they make up such a huge uh proportion of the index that if we see some massive you know i don't know four or five percent bounce up or down in amazon that's very significant to the

Wider stock market so let me know what you think in the comments section below and i'll do another update again very soon thanks very much for listening

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