On September 21, financial markets such as the European stock market and the U.S. stock market suffered a bloodbath. For a time, mourning was everywhere, and investor panic index soared sharply. As of the close, the major European stock market indexes closed sharply lower, with Germany’s DAX30 index falling by more than 4% and France’s CAC40 index falling by 3.74%; while the three major U.S. stock indexes all closed down, with the Dow Jones Industrial Index falling by 1.84% and the S&P 500 Index falling by 1.16 %.
As for the “frightening night” experienced by European and American stock markets and financial markets, some institutions and investment banks believe that it is mainly due to two factors:
First, the second outbreak of the new crown epidemic in Europe, Europe and even the world Economic gloom returns. Recently, not only has the number of new cases in a single day in France hit a new high since the outbreak, but the epidemic has rebounded strongly in the United Kingdom, Italy, Spain and other countries. According to media reports, British Prime Minister Johnson is likely to give a public speech on Tuesday, at which time he may announce stricter epidemic prevention and control measures, and may even ask the public to prepare for a second round of epidemic blockade policies;
The second is that the “black swan” suddenly flies out. More than 2,500 confidential documents from the U.S. Financial Crimes Enforcement Network Bureau have been leaked. These documents contain some unexpected content, that is, many major international banks launder money for criminals and transfer stolen money around the world. The banks involved include HSBC, Standard Chartered Bank, JPMorgan Chase, Deutsche Bank, Bank of New York Mellon, etc. Therefore, European and American bank stocks were the first to collapse and plummet, triggering a “bloody storm” in the financial market.
However, unlike value sectors such as industrial stocks, energy stocks and financial stocks that plummeted, although ICE cotton futures once fell below 65 cents/pound during the session, they performed relatively strongly in late trading and closed at the end of the day. At 65-66 cents/pound, compared with crude oil, gold and other commodity futures, cotton has stronger resilience, tenacity and bottom support.
The author believes that the strong fundamentals of cotton are the fundamental key factor for ICE’s “cannot fall or rise”: First, under the relatively intact framework of the first phase of the Sino-US trade agreement, China will still A large number of U.S. cotton contracts have been signed for 2020/21; secondly, major producing areas such as the southeastern cotton region of the United States and Texas have been hit by hurricanes and tropical storms one after another. Cotton growth, development, harvest, etc. have been greatly affected, and losses may significantly exceed expectations; Third, due to concerns about Trump and the U.S. government’s extensive ban on Xinjiang cotton products; coupled with the rapid recovery of the load of spinning equipment in countries such as Pakistan, Vietnam, and India, not only China’s export-oriented textile and clothing companies and processing companies are worried about 2019 /20. In 2020/21, U.S. cotton inquiries and demand rebounded, and cotton-related companies in Southeast Asian countries also actively entered the market to “buy the dip.” </p
