What is CFD Trading?

CFD trading is a method that allows individuals to trade and invest in assets by engaging in a contract between them and a broker, instead of acquiring assets directly. Traders and brokers agree among themselves to imitate market conditions and settle differences between themselves when positions are closed. CFD (short for “Contract for Difference”) offers traders and investors the opportunity to profit from price movements in financial markets without owning the underlying instrument.

Summary

  • Global equities are on track for the best month on record as Wednesday’s rally accelerates and cash continues to flow into cyclical sectors
  • Most emerging Asian stock markets and currencies rose on Wednesday as progress on the COVID-19 vaccine and expectations for a US fiscal boost under Joe Biden’s administration lifted risk assets
  • US stock futures rose late Tuesday following a banner day for three of the major market benchmarks. The Dow Jones traded higher by 132 points, or 0.4%. S&P 500 up 0.4% and Nasdaq up 0.6%
  • The Dow broke above 30,000 for the first time on Tuesday, amassing more than 400 points. Tuesday’s rally puts the Dow on pace for its biggest monthly gain since 1987, up more than 13%
  • The Chinese yuan strengthened on Wednesday after the central bank set a firmer midpoint for the currency’s daily trading path, and as increased risk appetite and expectations for US fiscal stimulus weighed on the dollar
  • Oil rose about 4% on Tuesday to hit the highest level not seen since March as a promising third coronavirus vaccine raised hopes for a recovery in fuel demand and US President-elect Joe Biden began his transition to the White House
  • The US dollar fell during Tuesday’s trading session as risk appetite increased after US President Donald Trump accepted the transition to Joe Biden’s presidency and with optimism that a COVID-19 vaccine will be launched soon
  • Federal Open Market Committee Minutes latest to be released Wednesday / Thursday morning
  • US jobless claims, GDP and personal spending data will be released Wednesday
  • The UK is expected on Wednesday to submit its government spending plans for next year
  • The US celebrates the Thanksgiving holiday on Thursday

SP500 Analysis

The target of the rally will focus on the levels 3625-3710. A stable weakening below the level of 3537 can trigger further consolidation to levels 3488 and 3420. A steady weakness below the level of 3402 can trigger a test of strong support at 3399 and 3353. Buy levels : 3570-3500, Sell levels : 3650-3780

Dow Jones Analysis

Steady gain above 30000 will be tested at the support level 29777 and 29635 for consolidation. A steady weakening below the 29635 level is the initial signal for further consolidation dow to the support level 29066. Buy levels : 29200-29000, Sell levels : 30180-3300

Nasdaq Analysis

Stable strengthening above the level of 11940 again supports the rally and the bullish trend of the Nasdaq with a test target of resistance at 12080-12220. Nasdaq consolidation will be tested at the support level 12006 to continue the levels 11975 to 11850. Buy levels : 10975-11850, Sell levels : 12180-12320

Hangseng Analysis

Hangseng is expected to return to the test of the 26745 resistance in the next few days. A steady decline below the 26410 level will be the initial signal for a weakening rally to the 26140 level. Buy levels : 26420-26180, Sell levels : 26780-26880

CFD US Sheet

Starbucks Corporation (NQ.SBUX) (Volume  10.349,36 K  52 Wk Range  50,02 – 95,93)

overview

  • Starbucks Corporation currently has a negative book value but is trading at a higher Price / Asset ratio (3.46) than its median counterpart (1.54)
  • The book value of SBUX-US equity is not positive and indicates that ROE versus P / E analysis is not meaningful to determine whether the company has an operating or growth advantage
  • The change in annual earnings (relative to peers) is better than the change in earnings (relative to peers), suggesting the company is more focused on revenue
  • The company’s relatively low gross and pre-tax margins indicate an undifferentiated product portfolio and less control over operating costs compared to peers
  • Compared to selected peers, SBUX-US has had faster revenue growth in previous years and the current P / E ratio indicates faster growth in the future which indicates superior growth expectations
  • SBUX-US has the financial and operating capacity to borrow quickly

Facebook Inc (NQ.FB)(Volume  30.333,67 K52 Wk Range  137,1 – 304,67)

Overview

  • It is trading at a lower Price / Book multiple (6.15) than its median counterpart (22.38)
  • The market expects FB-US to grow more slowly than its peers and its median ROE to decline
  • FB-US has a relatively high profit margin when operating with a median asset turnover
  • The change in annual earnings (relative to peers) is better than the change in earnings (relative to peers), implying that the company is more focused on revenue
  • FB-AS’s current return on assets and over the past five years shows that its relatively high return on operations can be sustained
  • The company’s relatively high gross and pre-tax margins indicate a different product portfolio and tighter controls on operating costs compared to peers
  • While FB-US earnings growth in recent years has been around the median peer, the below-stock median P / E ratio suggests that the market is likely to see the company’s long-term growth prospects fade
  • The level of a firm’s investment in capital indicates that it is likely to underinvest in the business with above average returns
  • FB-US has the financial and operating capacity to borrow quickly

Walmart Inc(NQ.WMT)(Volume  11.327,36 K   52 Wk Range  102 – 151,33)

Overview

  • Current Price / Book 5.37 is about the median across its peer group
  • The market expects WMT-US to grow at the same rate as its peers and to maintain the median return it has produced today
  • WMT-US’s average net profit margin and relatively high capital efficiency provide some operating leverage
  • The change in annual earnings (relative to peers) is better than the change in earnings (relative to peers), implying that the firm is more focused on earnings
  • WMT-US’s current and over the past five years return on capital is around the equivalent median and suggests that it lacks any particular operational advantage over peers
  • The firm’s margins are around the median of peers and do not represent any price benefit or operating cost advantage over peers
  • While WMT-US earnings growth has been below its peers’ average in recent years, the market still gives shares a P / E ratio that hovers around its median equivalent and appears to see the company as a long-term strategic bet
  • The company’s equity capital investment program shows that the company is underinvesting in the business that produces an equivalent average return
  • WMT-US has the financial and operating capacity to borrow quickly

minsky

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