Yesterday, investors in the US were waiting for Jerome Powell's speech. The head of the Federal Reserve could improve the mood on Wall Street with his message. The Nasdaq 100 index broke an all-time record, and Microsoft's market capitalization reached $2 trillion for the first time in history.
Powell, in his speech to Congress, reaffirmed that the US central bank intends to support a broad recovery in the labor market, noting that it would not raise interest rates simply because of fears of looming inflation. He added that the Fed only wanted to signal its willingness to fight inflation without taking any steps to roll back crisis-era stimulus. Inflation, on the other hand, is expected to be only temporary, while the economic recovery is expected to be sustained and strong.
The S&P 500 rose 0.5 percent yesterday and was just 0.2 percent away from a new all-time record at the close. The Nasdaq, meanwhile, hit a new record high of 14,253 points, rising 0.8 percent. U.S. stock futures also seem to be rising in the morning on Wednesday.
Oil holds price, OPEC+ announces production increase
Oil prices are also holding high at September 2018 levels. This may be influenced by reports that OPEC+ has begun talks on gradually increasing production since August. The cartel has already brought 2.1 million barrels per day back to the market from May to July, signaling a continued strengthening of market fundamentals and a recovery in oil demand.
API data showed U.S. crude inventories fell by 7.2 million barrels in the week ended June 18, following a decline of 8.5 million the previous week and against market expectations of a 3.6 million decline.
EIA data suggests that oil market rebalancing may not occur until late 2021 and early 2022, and that current OPEC supply increases will still not fully meet increasing summer demand.
Bitcoin below $30k, but only for a while
In the cryptocurrency market, bitcoin quotes fell below $30k yesterday. Thus, BTC lifted all the potential gains made in 2021. However, the price of the largest cryptocurrency dipped below this level only for a while, to then record a more than 15% rally to $34,000 in a few hours.
Both declines and increases were accompanied by very high turnover, indicating the possibility of first activating limit sell orders in the area of the May minimum, to then lead to short squeezes of those who decided to go short after price fell below $30,000. The level of the May low may therefore again become a key support on BTC/USD.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
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