SAP failure, new lockdowns and the end of the stimulus

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The biggest week of the Q3 earnings season started with a very minor chord. SAP lost about $ 30 billion (!) of capitalization after the publication of quarterly reports and the fall of shares by 17%. The German software maker (also one of the largest technology companies in Europe) said it is going to reverse its business to the cloud technilogies. This will inevitably hit the financial results of the company for the foreseeable future, but it is a sacrifice that must be made in order to ensure survival in the future (according to the head of the company Christian Klein). Well, the markets didn't like the idea of making sacrifices here and now. In general, the news is very symptomatic and indicative, because this week in the USA almost all FAANG companies will report.

After the second wave of the pandemic, a second wave of lockdowns starts in Europe. Following Ireland and the Czech Republic, the ranks of countries with maximum restrictive measures were replenished with Spain (a state of emergency with a curfew was introduced almost throughout the country). Next in line are Italy (they have already introduced the closure of bars and restaurants at 18:00 across the country) and France (the night curfew has been extended, but more stringent measures are not far off).

The question of stimulus in the US is formally closed until the elections. Simply because the Senate ended its session yesterday and the senators left Washington. Yes, hypothetically there is the possibility of an urgent recall within 24 hours. But in fact, we have what we have. More precisely, what we don’t have. We don’t have an accepted stimulus package. Given the current pandemic situation in the United States (new all-time highs in the number of new cases were recorded over the weekend) and the obvious consequences of this for the economy, the failure of stimulus is a direct signal for selling in the US stock market.

In general, the pandemic ring is shrinking at the neck of the world economy, which means that you can more actively sell in the commodity markets. One can start with oil and palladium, and continue with soybeans and corn.