Mubasher: It is expected that the global financial markets will enter the “anticipation” phase, awaiting data that may push them to complete the journey of ascent or return to the red box, perhaps the most prominent of which are the talks about the US debt ceiling, which reports indicated that it was temporarily stopped last Friday, in addition to statements not to raise interest and fix it, and special signals. With the emergence of a new bankruptcy crisis in the banking sector in the United States of America.
According to experts to “Mubasher Information”, there are two main factors that support the temporary rise in gold prices in exchange for the continued fluctuation and variation of stock prices and the dollar index during the next week, explaining that at the forefront of these factors are conflicting reports regarding reaching an agreement to raise the US debt ceiling, in addition to the return of increased fears of the emergence of a bankruptcy crisis. New to US banks.
According to news reports issued yesterday, Friday, that negotiations between the Republicans in the US House of Representatives and the administration of President Joe Biden regarding raising the federal government’s debt ceiling of $ 31.4 trillion have been temporarily halted, and the same reports stated that the heads of banks in the United States were informed in an official meeting of the need for more. Mergers in the sector to avoid the specter of bankruptcy caused by high interest rates.
The impact of those reports was greater on stocks on Wall Street, especially from their potential positive impact on the statements of Federal Reserve Chairman Jerome Powell, who said that given the extent of the tightening of the credit situation, the US central bank may not need to raise interest rates as much, after increasing them ten times. consecutively since March 2022.
The biggest beneficiary
After these reports, stocks on Wall Street turned downward at the end of trading on Friday, the Dow Jones index fell 0.3%, the Standard & Poor’s 500 index fell by 0.1%, and the Nasdaq index fell 0.2% on the impact of the suspension of talks to raise the US debt ceiling and the demand of banks in the United States for more merger to avoid The emergence of a bankruptcy crisis again, while most of the European and Japanese stocks, and before them the Arab stocks, recorded some increases.
Gold was the biggest beneficiary of the US Central Bank president’s statements and the emergence of fears of bank collapses in the stock markets again, as it ended Friday’s trading with increases of 1.1%, equivalent to 21.8 dollars, to reach 1981.6 dollars per ounce. In contrast, the dollar index fell 0.4% to 103.08 points, after hitting its highest level in the past 7 weeks.
What are the markets waiting for?
In turn, the head of the new market research department in the Middle East and North Africa region at XS, Ahmed Najm, explained that the statements of the Federal Reserve Chairman did not include any indications of the period of time during which he will keep interest rates high, and this means that even if the US Central Bank stops raising interest significantly. Temporary or permanent, there will be no price reduction, at least until the end of 2023, and perhaps the beginning of next year.
He pointed out that this in the medium term supports the presence of strong price fluctuations in the financial markets, especially in currencies, assets, and minerals denominated in dollars, stressing that the increase or decrease of these fluctuations will depend on global events, data, and political and economic decisions, even if the situation in the United States stabilizes.
kiss of life--
For his part, the economist and head of market research at Pilon Egypt, Taher Morsi, says that the statements of the Federal Reserve Chairman that there is no need to continue raising interest rates may represent the kiss of life for the return of temporary gains to the financial markets, which are still fraught with risks in light of the emergence of signs of a new banking crisis, which showed it. US banking stocks at the end of Friday’s session fell sharply.
And it is likely that the biggest beneficiary of the instability of the situation regarding the debt ceiling so far is gold, which may aim to rise again at $ 2000 an ounce in the event of fueling banking fears of announcing new bankruptcies or any new occurrence regarding geopolitical developments.
In the Arab world, Morsi affirmed that the declining oil prices will remain the most important factor in controlling the course of the financial markets for listed shares in the region, especially after the end of the companies’ business results season at the end of the first quarter of this year.
From a technical point of view, stock market analyst Mohamed Hassan explained that the Gulf markets, in particular, may witness some declines during the next week, in light of the fluctuation of oil prices and before the return of its rise.
At the end of the week’s trading, after reports that the debt ceiling talks in the United States had stopped temporarily, which raised concerns about a possible default that could reduce demand for oil, which also contributed to the decline in the price of Brent crude futures by 0.1%, to $ 75.77 a barrel, and the decline of crude oil. West Texas Intermediate, the US month of July, increased 0.3%, to $71.74.
Regionally, the performance of the Arab stock exchanges was mixed, as the Egyptian Stock Exchange index fell by more than 3%. The indices of Saudi Arabia, Qatar and Kuwait fell by 0.4% to 2.2%.
As for the expectations of the Egyptian Stock Exchange, Doaa Zeidan, a financial market expert at Tycoon Securities Brokerage Company, explained that the decrease in inflation rates for the first time in a year, in addition to fixing interest rates, will be two major factors in helping the stock market recover and attract new capital, especially in light of the presence of stocks at price levels. Low compared to stock prices and currency value in financial markets in the region and the world.
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