Global turbulence continues to increase, the war in the Middle East appears to be escalating, after Israel has deliberately eliminated Hamas and Hezbollah leaders, the biggest supporter of these groups, Iran, is now getting involved again. The possible effects cannot yet be estimated, will Israel continue to surgically attack precisely identified targets, or will there be a full-scale military conflict? In any case, the whole world is watching closely and everyone is hoping that the whole situation does not escalate into a wildfire. The Middle East conflict has almost pushed the situation in Ukraine into the background, but it is no less critical. The troops of Ukraine and Russia are still facing each other in a grueling war of material resources, and although Ukraine has certainly had successes, even on Russian soil, it still lacks the necessary clout to drive Putin out of the country completely.
In the USA, the election campaign is coming to an end and it is becoming increasingly clear that Trump is losing ground. Harris is currently able to win over more of the important swing states. It remains to be seen whether Trump will pull something out of his pocket at the last minute, as he did with Hillary Clinton.
What does all this mean for the stock markets? The market is closely monitoring the political situation in the world and is reacting to it. The FED’s interest rate cut of as much as 0.5% has given shares a boost, but any escalation of the two major conflicts at the moment dampens the mood again. Another slowing factor is the weakening Europe, whose economy is not really getting going.
The EUR/USD also fluctuates considerably, depending on which current news is damaging or boosting the euro or the dollar more. Crude oil has been steadily declining throughout the year, slowing inflation, but we should not forget that the winter season is now beginning.
The strongest quarter of the year begins on October 1st, let’s see if the Christmas business drives the European economy up a little, in the USA we see great hope.
