European stock futures are trading more or less flat while the US tech futures, the Nasdaq 100, are soaring today. We see a higher move for the Nasdaq index futures because of hopes that we will see some recovery in the Chinese stocks listed on the US stock exchanges.
Chinese Internet Stocks
Chinese internet giants such as Baidu, Alibaba, and Tencent faced a heavy sell-off last week. Investors initially thought that these stocks are under immense selling pressure because of the fear of being delisted from the US stock exchanges.
There is no doubt that the damage caused by the Trump administration to the US-China relationship is going to take a lot of time to get back on track, that is if it ever goes back on track.
However, it has become clear now that the excessive sell-off in the Chinese stock that occurred on Friday was mainly because Archegos Capital Management was forced to liquidate its position.
The cargo ship which was blocking the Suez Canal has finally been floated, and this has eased off concerns among investors about the global supply chain. However, it is important to keep in mind the traffic congestion that occurred due to the ship being stuck there for nearly a week will take some time to clear off. So the supply chain isn’t going to get back to normal straight away; ports are likely to remain congested.
Gold Continues Its Slide
Gold trading prices are dropping further on Monday as traders are failing to see a flow of positive news that can shift the demand curve for gold price. This is despite the fact that we do not see much of an interest in the equities as well.
The reason that we see the gold prices moving lower today is mainly because of the dollar’s strength. And the dollar’s strength is coming from that the fact that the US economic strength and vaccine rollout are taking place much quicker than previously anticipated. (more on currency strength)
However, there is a glimmer of hope when it comes to the gold price because, according to the US Commodity Futures Commission CFTC, hedge funds and money managers are increasing their bullish bets in the gold price.
Oil Prices On The Move
Oil is trading lower today as the efforts to dig out the largest cargo ship from Suez Canal have become a success. In addition to this, US oil producers are still digging oil from the ground much faster, and this means that the oil supply and demand equation is likely to remain under pressure.
More positive news came over the weekend in terms of how money managers, pension funds, and family offices are investing their wealth in Bitcoin. Of course, some of the news was nothing but a reminder that Bitcoin price is likely to see more upside than downside. One of the most important things to note about Bitcoin trading is that even the Fed Chairman, Jerome Powell, also compared Bitcoin to a commodity like gold.
In terms of the price level, what really matters is the Bitcoin price breaking above the 60K price as that will gives us more confidence that Bitcoin will move towards its realistic target of 100K. Traders do believe that 100K is not a big number for Bitcoin, and it is only a matter of time before we will see the Bitcoin price floating near this price level.