Speculative trading vs. value-based investment
Investors in America’s highest-capitalization stock index closed a profitable month in October, as the S&P500 rose 3.69%, while Budapest’s BUX declined by -0.4%. The Hungarian trading floor witnessed some very mixed movements indeed: while OTP strengthened by 9.02%, MOL weakened by -2.56%.
No significant swing in Hungarian bond prices was seen in the previous month as debt securities produced a result of -0.14%, while the forint lost 1.33% of its value against the euro.
Regarding developments at the macroeconomic level, it is important that the Federal Reserve announced a 20% more substantial economic stimulus programme than expected, revealing its intention to buy bonds on the market in a value of USD 600 billion, a move that – according to analysts – is equivalent to a 70 basispoint cut in interest rates. In response to the Fed’s announcement, the dollar weakened considerably against the euro, then began to strengthen robustly, with the exchange rate falling from over 1.42 to below 1.37. The number of those employed in the US rose significantly, by 151,000, according to the labour marketreport for October, which was more than double the expected increase.
Economic growth has slowed (by 0.4%) in the euro zone of the European Union in the past quarter. Germany suffered the most serious slowdown compared to the previous quarter (0.7%), while Spain’s GNPfailed to expand at all.
Download the whole outlook here:
Monthly outlook - November
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