Mixed-up stocks, dollar bid

It seemed the big “rotation” in stocks was rotating again this morning as investors were struggling to shake off concerns over coronavirus.

Those sectors pegged to the reopening of the global economy and rapid vaccine rollout were getting sold – see financials, energy and consumer stocks. On the flip side, tech shares were gaining once more as they are seen benefitting from lockdowns and working from home. That said, US stocks are modestly higher with the tech-heavy Nasdaq now getting sold into.

How much more good news is there to be priced into the dollar?

The dollar is continuing to benefit in this cautious environment with its strong performance over the past few weeks underpinned by rising growth prospects, increasing bond yields and the successful vaccination program stateside.

These major drivers for the greenback contrast with the Eurozone issues and are still weighing on the single currency, even as stronger than expected manufacturing data was released this morning. The PMI, a well-watched gauge of sentiment in the bloc, soared to a record high and even the downtrodden services sector, hammered by social restrictions, rose to a seven-month high. Crucially, the 48.8 print is still below the 50 benchmark that separates expansion form contraction.

The DXY has touched the 200-day moving average today and hit levels last seen in November.

Bullish momentum is on the rise again so today’s close above this important indicator will be significant if the bulls want to see more upside. Interestingly, the long-term seasonal performance of the dollar points to a likely peak towards the end of this month.

Bitcoin in the news, thanks Elon

Bticoin is up more than 4% today after Tesla chief Elon Musk said the company’s electric vehicles can now be bought using the cryptocurrency, with the option available outside the US later this year.

The digital currency has roughly doubled this year but is still managing to divide the opinion’s of professional investors.  Is it now reaching the threshold of becoming an investable asset, due to improving liquidity conditions, increasing acceptance by institutions and an evolving regulatory framework? Or will there be a brutal selloff once major regulators get to work and set some rules for the cryptocurrency space?

Bitcoin has bounced off a trendline from the late January low and last month’s high around $58,367 is the next upside target ahead of the psychological $60,000 mark.