Companies in the traditional economy sector seem to be doing much better today than companies in the technology sector, which we may observe in the divergence of the quotations of individual indices. Cryptocurrencies are dynamically returning to favor, and the market is discounting the US aid package.
Futures on major U.S. stock indices rose sharply on Tuesday. DJIA futures are up 0.5 percent, the S&P 500 contract is up 0.8 percent and the Nasdaq 100 is up more than 1.5 percent, as investors may have been enthusiastic about the fact that the U.S. House of Representatives will finally pass a bill to help the U.S. economy to the tune of $1.9 trillion later this week, it will likely happen on Wednesday. The Joe Biden administration has said it will sign the bill before unemployment benefits run out on March 14. Risk appetite may have also increased after statements from U.S. Treasury Secretary Janet Yellen, who said there are no signs of rising inflation in the country and that policymakers will monitor the situation closely and be ready to act. The Biden administration has conveyed that people who have been fully vaccinated against coronavirus can meet without masks indoors in small groups with other people who have been vaccinated, but should avoid non-essential travel. At the close of trading Monday, the Dow Jones was up nearly 1 percent, while the S&P 500 was down 0.5 percent and the Nasdaq was down 2.4 percent.
As a consequence, the Dow Jones set a new record high on Monday, which may also be the result of capital turnover. Rapidly rising bond yields in the U.S. are hitting harder on the valuations of technology companies, which appear to be selling, and capital may be migrating to undervalued value companies. Comments from David Tepper, founder of Appaloosa Management, also helped improve investor sentiment. Tepper said it's very difficult to be bearish on stocks right now, and he believes the sell-off in Treasury securities that has pushed up market interest rates is likely over.
Meanwhile, in Europe, Germany's DAX 30 boasted a record high, jumping more than 3 percent to an all-time high. Investors seem to be expecting an acceleration in global growth thanks to the ongoing introduction of the COVID vaccine, with governments and central banks around the world stepping up efforts to support economies affected by the pandemic.
It also seems that the introduction of a fiscal package in the United States and good general optimism in the markets may also be felt on cryptocurrencies. Bitcoin is already trading above $53,000, and this is despite a rapidly gaining US dollar in the forex market. ETH/USD, on the other hand, has already risen to $1850 and is close to its all-time high, which was set in the $2040 area. Not so long ago, after the correction, ETH cost less than $1,300, so the rebound seems very clear. The market may also be counting on some of the money Americans will receive to flow into cryptocurrencies. Previously, when Americans received direct transfers of $1200, the heads of cryptocurrency exchanges in the U.S. mentioned that moments later, new exchange accounts funded with just such an amount began to appear.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
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