Just to get us up to speed, there were several eye-catching events in the US markets on Wednesday:
- Coinbase’s highly-anticipated direct listing on the Nasdaq on Wednesday.
Shares of the US crypto exchange jumped from $381 at the start of trading to as high as $429, pushing the company’s market valuation briefly past $100 billion, which is more than Nasdaq’s own market cap. From that peak, the stock then fell by nearly 17% to close at $328.28.
Coinbase’s price action also whipsawed Bitcoin, which dropped as much as 5.45% from a new record high, although the cryptocurrency is still trading well above the $60,000 psychologically-important mark at the time of writing
- Johnson & Johnson’s Covid-19 vaccine faces longer pause.
Advisers to the US Centers for Disease Control and Prevention wrapped up an emergency meeting without further clarity on if or when J&J’s vaccine can resume being disseminated in the US. The decision comes after 6 women developed rare blood clots after receiving the J&J shot.
It remains unknown when the health officials will reconvene to vote on the resumption of J&J’s vaccine use. This open-ended pause could cast doubt over the world’s ability to move into the post-pandemic era. Johnson & Johnson’s shares still climbed 0.28% and remains supported by its 100-day simple moving average for now.
- Wall Street Banks such as JPMorgan and Goldman Sachs reported blockbuster earnings.
Although the financial sector climbed 0.66% and was the second biggest gainer on the S&P 500 on Wednesday, it wasn’t enough to prevent the blue-chip index from falling 0.4% from its record high set the day prior.
Investors and traders will still have their hands full with plenty to look forward to on Thursday.
- US retail sales, industrial production, weekly jobless claims
Today’s US economic data are likely to be filtered through the US inflation outlook. Better-than-expected print could point to bigger inflationary pressures, which could then lead markets to think that the Fed has to wind down its asset purchases and hike US interest rates much sooner.
Fed Chair Jerome Powell stuck to his script yet again yesterday, when he reiterated the central bank’s pledge to support the US economic recovery. Still, markets are skeptical whether the economic data would eventually force the Fed’s hand to act sooner, or if they’ll stay true to their word and sit on the sidelines.
Today’s data could offer more clues about the Fed’s eventual policy path, and such shifts in market expectations could be manifested in the Dollar index (DXY), which has only managed three days of advances so far this month amid cooling US Treasury yields.
The DXY has now broken below the psychologically-important 92 mark to test its 50-day SMA as a support level. A lower low beyond the 91.29 mark should then disrupt the year-to-date uptrend and give bears a shot in the arm.
- Earnings: Citigroup, Bank of America, Delta Air Lines
The earnings gravy train continues with several big names across various industries hoping to add to their year-to-date stock gains:
- Delta Air Lines: 19.80%
- Citigroup: 18.25%
- Bank of America: 31.57%
These 3 stocks are members of the S&P 500, and an earnings beat could push this benchmark index to yet another new record high, although futures are just marginally higher at the time of writing.
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