13.08 - today's performance is far from satisfactory
- by Anna K.
One of the NATO countries is under immense economic pressure.
There is a currency in the world that no one really talks about because it is quite local and the country that holds it is not the most popular when it comes to trading. But right now Turkish lira is demonstrating the worst decline since 2008. And there was hopeful time before the p[residential elections when Erdogan (Turkish President who was re-elected this summer) promised to stabilize the economy along with the national currency, but that time is gone now. And it seems that there are even more troubles and less hope for lira right now.
But as we said, this currency can barely be named popular and be deemed as a top-10 trading instruments. So what is the big deal? We understand the impact of the fall for the specific region, but there are tens of economies in the world which are failing right now and no one seems to mind. So what is so important about lira then?
Well, not a lot of people know that but Turkey is at war with United States right now. To be more specific, Turkey has captured American preacher who is being accused of crimes on Turkish territory. The conflict grew so bad because Turkey refuses to let him go. The dialogue with US is at the dead end right now after Trump slapped new tariffs on Turkey. Erdogan is now stating – who is not going together with Turkey are automatically against it. So, for once we have the perfect example of what it is like – crossing Trump. A lot of countries have beef with the USA and Trump but Turkey was always a supporter of America with both of the countries being in NATO. So the pressure on lira is enormous from dollar’s side which is never good for the pressured currency.
International problems are also supported by the internal policies which cause world-wide sell off. It seems that trading community doesn’t at all like the political system, built by Erdogan. Right now the President is also putting oil into the fire by saying that Turkey is at “economic war”. But it seems to us that the opponent, chosen by Turkey is way too strong for it. So, what will be the outcome? Well, we think that the easiest and the most correct way for Turkey to go out of the current situation is to make amends with the US and focus more on the inner policies and economic situation rather than to go in the economic war with the biggest economy in the world. If the situation is escalated by either of the sides lira will not withstand the pressure. There is already economic crisis in Turkey, so the impact on the people as well as the markets is going to be immense. However, we still hope that Erdogan will be able to stabilize the situation.
As we all know, America decided to re-impose its sanctions on Iran last week and that rose a lot of questions regarding Trump’s sanity in the world. We are not really sure what Trump was trying to achieve with the decision but it seems that he expected the prices for American oil brands to skyrocket. Although he forgets that strong oil tends to push the greenback down. Right now oil process are not moving as if waiting for the further actions of either of the sides. But this can’t go on any longer as uncertainty always ends in falls for oil. And that is the last thing the markets need right now.
The real concern for traders right now is that Iranian side negates the possibility for all of talks with Trump regarding oil question. That means that 50-percent import cut will be re-imposed in Iran after all. And what that can do to the oil prices? Well, for once it can really boost the price for the American crude as it will prove itself to be the most stable one among all of the counterparts. Brent output is being amended by Russia and Saudi Arabia amidst all of the controversy and WTI is quite stable and the output is steadily growing. What’s not to like? But the thing is that banning all of the other products besides American may not be such a good idea after all.
We all understand the concept for the competition right? That is the main thing that forms the markets and the laws on the markets. But right now Trump gets right inside these laws and is trying to change them so that they fit all of his needs. But that is simply not how the situation is going to go. Eliminating the competition will lead to collapse sooner rather than later. Oil hasn’t been all that stable lately especially taking into consideration that there are a lot of other economic problems in the world.
Oil starts to lose attention. It is simply tiresome to watch it tango with dollar over and over again. We for once want to turn out eyes on something fresh. And we assume the same happened to other traders around the world. But losing attention is exactly what is going to ruin oil industry in the long run. We hope that the situation is going to stabilize soon but for now it is hard to see the light. We suppose we could revel in the fact that for now prices are not going lower and that is a good sign of the industry becoming stronger and rather independent.
There is no doubt that when Steve Jobs held the first iPhone up on the presentation he certainly hoped for this moment to come but he couldn’t really imagine that is would come so soon. Of course, sadly, Jobs didn’t live to see the day when his company grew to the height of his dreams but we now have to ask ourselves a question – what is it like to live in a world with a giant like that?
Can you imagine investing in Apple just a year ago? Of course we had doubts after iPhone X went out and the profits of the company went way down but now we see that apple bounced right back even with all the losses met along the way. Trillion-dollar market cap is no joke especially in the current situation when a lot of countries are experiencing economic crisis but still seem ready to spend money on the Apple services. It means that the Apple management have built the company so addictive for the consumers that even in times like these, money will be flowing.
You know what it also means? That the profits will not stop any time soon. We tend to forget that Apple is more than just phones. Apple also provides other billable services like music and video streaming services as well as produce laptops and tablets with unique features. All of that adds up to the whole blown empire that will always bring revenue from at least one of the multiple sides. And that is the only thing that matters. As long as there are profits, investors are going to come and traders will keep on buying stocks.
And what does that mean for us? That we will always have something to trade. Apple has a lot of unrealized potential even now. There is prognosis for growth… even now. And we tend to believe every prognosis. After all the first trillion is always the hardest.