The Market Week – February Week 2
- The frenzy this week moved from GameStop to Bitcoin, as the news from TESLA that they had invested $1.5 bn in the cryptocurrency and would accept it as payment sent the asset to a new all-time high over $48,000. The volatility continues.
- NFP disappointed this month (49,000), after expectations had been increased to 105,000 following the better ADP and Weekly Claims numbers earlier in the week. This week claims are expected to be better but to remain elevated at 755,000.
- The vaccine rollouts continue to gain traction globally (over 33 million in the US and over 12 million in the UK) and the signs of the pandemic easing continue, after the WHO reported a fall in cases for a fourth consecutive week. However, the positive vaccine news is tempered by increases in the new variants, which have proved to be very contagious.
- This week the USDIndex plunged from 91.50 to 90.25 following the NFP disappointment. EURUSD moved above 1.2100, once more testing 1.2150. USDJPY was a significant mover too, topping at 105.76 before crashing under 104.50. Cable finally breached 1.3745 this week to test 1.3850 highs.
- Global stock markets remain elevated and have once again posted new all-time highs. The USA500 broke over 3900 for the first time, moving to 3925. The USA100 remains the best performer and trades over 13,700.
- Q4 Earnings Season continues to beat to the upside, with over 50% of companies having reported and 83% of those having registered better than expected results. This includes Twitter, Cisco and General Motors so far this week with Coca-Cola, Pepsi Co and Walt Disney still to report.
- The Gold price crashed below $1800 and the important 200-day exponential moving average for over two days this week before rallying to test $1850, as the USD continued to weaken.
- USOil prices continued to rally this week, breaching $55.00 to test new 13-month highs over $58.00. UKOil broke the key $60.00 level and trades over $61.00. Prices are supported by increased positive sentiment and stimulus which is likely to lift economic output, and the fading of pandemic pressures.
- The yield on the US 10-Year Treasury Note holds over the key psychological 1.000 level and tested 1.20 this week before settling around 1.16. The anticipation of a larger US stimulus package, record high stock markets, and the spectre of rising inflation are combining to keep yields elevated.
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Stuart Cowell
Head Market Analyst
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