Overview of TOP weekly news 22.7.2020

22 / 07 / 2020
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Musk will be rewarded for meeting the conditions

Tesla CEO Elon Musk has met $2.1 billion. Tesla, according to the market capitalization of the largest carmaker in the world, reached the market capitalization of the company of almost $300 billion.

Under the agreement, Musk will acquire a total of 20.3 million share options with an estimated value of $56 billion in 12 tranches over the next ten years, provided that it achieves many targets and operating objectives, including that Tesla’s market value will rise by 2028 to $650 billion at a steady rate of market capitalization growth of $50 billion every ten months.

Interestingly, Musk as a director does not regularly receive any salary, cash rewards or capital. His only compensation is a reward, which, however, he receives only if the company manages to meet the set goals.

Performance of Tesla’s shares. (Source of the graph: Investing)

Can we expect an agreement between the US and the UK?

According to the latest published reports, the United Kingdom is giving up hope for a US trade agreement by the end of this year. The reason, according to British officials, is the accusation of the Covid-19 pandemic for slow progress. Officials say the debate has been slowing for a long time, first with a delay in Brexit and then with the coronavirus crisis. However, they insist that the UK and US negotiators move forward and have a good personal chemistry – unlike the UK and EU leaders.

“It would be a very, very, very fast time. I think it is unlikely that this will happen,” said Lighthizer, a US negotiator at a recent congressional committee, stressing that any agreement will require the approval of the US Congress.” It is almost impossible unless members of Congress decide that they want to do something special,” he added.

 

The agreement will change investor’s behaviour in the European Union

Following the successful agreement of the €750 billion stimulus package, the EU is set to become one of Europe’s largest bond issuers by turning to financial markets to fund a coronavirus recovery package. According to most investors, the impending explosion in debt issuance in Brussels could help create a new price reference for the whole region, while strengthening the role of the euro as a reserve currency.

Philip Brown, Citi’s head of public sector capital debt, said: “I think this will change Europe’s capital markets. You will have a shared safe asset that is large enough to find its way into government bond indices and government bond portfolios.”

The new offer of EU bonds is likely to attract the attention of foreign reserve managers, which, according to ING analyst Antoine Bouvet, will potentially strengthen the attractiveness of the euro. “This loan may be temporary, but it is quite large and liquid enough. It is reasonable for investors to think about buying,” he added.

Will the S&P index approach 3846 points?

An icon among technical analysts, Tom DeMark, whose D-Wave strategy is popular among business legends such as Steve Cohen, predicted that by the end of the March decline in the March S&P 500 decline, there will be a 34% decline (although its projection the decline in the index below 2,100 was inaccurate, as the index fell to 2,191.86 points).

According to the latest forecast, S&P will rise to 3,486 points, setting a new record in the coming weeks as the recovery captured by the technology sector spills over into the wider market. Since the end of the first quarter, all markets have developed positively thanks to only 10 mega-cap stocks and the remaining 490 stocks in the S&P 500 have gone nowhere.

Performance of the value of the S&P 500 index’s value (Source of the graph: Investing)

 

Exploration of potential findings is slowing down

It is unlikely that oil will remain the source of the broadest energy mix for the foreseeable future, although this is not entirely certain with the exploration of new wells. The reason is mainly climate activists who claim that the discoveries only sustain the era of fossil fuels. Companies should focus more on mitigating the economic disaster, which will reduce declining long-term demand in the future.

And all this was a topic even before the coronavirus sent the global economy into the worst crisis since the economic crisis, with the industry now asking what the long-term impact of the pandemic will be on oil demand – which cost nearly 100 million barrels per day (bpd) last year. After more than an 8 million decrease in barrel demand per day in 2020, the International Energy Agency expects a recovery of nearly 6 bpd next year.

Performance of Brent oil futures. (Source of the graph: Investing)

 

Watch this week:

Wednesday, July 22, 2020

The United States will publish the development of home sales. Analysts expect home sales to rise by 24.5% to 4.78 million in June.

Friday, July 24, 2020

The United Kingdom and Germany will publish the most watched leading indicator on Friday – the PMI index of production, services, and composite. Analysts expect a slight increase in the production index in Germany from 45.2 to 48 points for July.

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

 

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