On Thursday on Wall Street we could observe first nervous declines of the main indices, and then we saw a quick rebound and upward movement. The final Dow Jones gained 201 points or 0.6 percent on Thursday and rose to 32,621 points. The S&P 500 rose 21 points, or 0.5 percent, to 3,910 points. The Nasdaq rose 16 points, or 0.1 percent, to 12,978 points.
Thursday's events could have a significant impact on the future fate of the U.S. indices, as on the charting, or technical analysis side, the market stalled and turned at key support points. Today, Friday, U.S. stock futures rose sharply, with investors seemingly pleased due to the progress of vaccination in the country. President Joe Biden has set a new goal of administering 200 million doses of COVID-19 vaccine within his first 100 days in office. The previous goal was met ahead of schedule. Investors did not hide their optimism when the number of unemployment claims in the U.S. hit its lowest level in a year and Q4 GDP growth was slightly revised upward to 4.3 percent from 4.1 percent. The favorable news for Wall Street could also be the one coming from the Fed. The US Federal Reserve will remove restrictions on dividend policy and share buybacks policy from banks. Both may be beneficial for the demand for bank shares.
Meanwhile, the Suez Canal remains blocked in Egypt, supposebly causing the price of oil to rise by almost 2 percent on Friday to around $60 per barrel WTI. It is still unclear how long the unblocking action will take, with a 400-meter container ship still stuck aground across the canal. At this point, there is talk of several days or even weeks as progress is slow.
The World Bank reported that China, the world's biggest oil importer, is expected to lead the recovery of East Asian and Pacific economies this year, growing 8.1 percent, up from 2.3 percent in 2020. Investors are now awaiting the April 1 OPEC+ meeting. It is expected to give guidance on the cartel's production plan from May. OPEC will have to contend with a possible economic slowdown and reduced demand for oil by imposing further tightening in Europe, but these may have subsided by May.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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