Powell did not disappoint the markets. All-time highs in the USA

23.06.2021 11:52|Forex conotoxia.com

Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.59% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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.

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.

77.46% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

See also:

Jun 22, 2021 11:55 am

Market waits for Powell’s speech

Jun 21, 2021 11:56 am

Risk-off at the beginning of the week

Jun 18, 2021 4:38 pm

The stock indices fell. Yield curve flattens

Jun 18, 2021 11:53 am

Stronger dollar undercuts rise in commodity prices

Jun 17, 2021 11:38 am

Dollar rally after Federal Reserve decision

Jun 16, 2021 9:04 am

Dollar stronger ahead of Fed decision

Start chat