Stock Market Today
European and US futures are trading mildly lower as the delta variant remains a concern for investors that could hamper the economic recovery across the globe. Having said that, investors have not lost their appetite for riskier assets as they continue to use every single opportunity to bag bargains, and this continues to result in the US equity markets reaching more record highs. For instance, the S&P 500 closed at another record high yesterday.
Investor Enthusiasm and Facebook
We are seeing a lot of enthusiasm among tech investors as well, because yesterday we had positive news for a tech company which has actually won a case against regulators in a court over the data concern.
The Federal Trade Commission (FTC) had accused Facebook of systematically working towards eliminating potential competition to maintain its monopoly. However, the federal court dismissed the antitrust claim against the company. Similar cases charged by 48 state lawyers could have cornered Facebook into divesting WhatsApp and Instagram. Subsequent to the news, the market capitalisation of Facebook broke the $1 trillion mark and the stock price jumped by nearly 4%.
Facebook’s stock soared yesterday after concerns relating to high policy rates abated as such a scenario would drag the valuations of high growth companies such as Facebook and Apple down.
Facebook’s Victory Is Good For Other Tech Companies
Basically, the fact that Facebook had its court victory yesterday is a big deal, because this shows that the recent security against companies about their data usage may no longer be that much of a concern as they do have grounds. For traders, this is really important because for the past few days we have been hearing a lot of similar news for Google as well. Given the fact that Facebook has won a case, now traders are anticipating a more positive outcome for Google as well.
Stock Market Today
As for the overall US stock markets, traders know that there isn’t really any real reason to worry and there two important explanations for this.
The previous concerns of investors are addressed by repeated declarations by the Federal Reserve that rising inflation is temporary and will subside once the supply chain is in full swing. For instance, if we focus on last week’s inflation data, it becomes clear that there isn’t much to worry about because inflation is likely to be insignificant and is well under control.
In addition to this, we also have President Biden’s $1 trillion infrastructure package. Currently, it is believed that it will be used to improve broadband access, roads, and bridges over the next eight years. This means more demand and more work for consumers and that should continue to boast GDP growth in the US. This particular aspect is lifting the inevstor sentiment, as they know that fiscal help, something that market has become addicted to, is not leaving town anytime soon.
Banking Sector In Focus
The banking sector is highly likely to be in focus today as a number of US banks decided to hike their dividends after their stress test success. The move was somewhat anticipated especially the fact that the Fed has been pumping so much money into the system and US banks had immensly healthy quarters. All of this resulted in banks having much stronger balance sheets.
Strong balance sheets and higher dividends are somethings that investors crave and yesterday they saw that in the US banking sector, and it is likely that we will see bank shares soaring further.
Morgan Stanley has announced that it will spend about $12 billion on stock buybacks and has raised its quarterly dividend. The Fed has given banks permission to continue with share growth and dividend payouts. Wells Fargo, Goldman Sachs, and JPMorgan Chase have also announced share repurchases and dividend hikes.
Stock News: Tesla
Despite growing consumer safety concerns in China, Tesla’s stock price rose nearly 2% in yesterday’s trading session. A series of quality complaints, trending crashes, price volatility, and infamous recalls have harmed the company’s goodwill among Chinese consumers. The underlying problem is a software bug in the vehicle’s battery. Tesla has had to recall both the Model X and the Model S due to these issues.
Even in the midst of the company’s current disaster, there is a silver lining. According to company representatives, the software flaw can be resolved without the need for consumers to visit dealerships. This simple solution can demonstrate to prospective customers the competitive advantage of owning a Tesla.
The benchmark of cryptocurrencies has been trading higher, despite the ban on Binance, a popular crypto exchange, in the United Kingdom. Investors see the crackdown as a sign that the crypto markets are maturing, and that the company will have to accelerate its process of becoming a regulated exchange, which will likely lead to increased trust among crypto traders. Bitcoin is currently trading at near $34,469 at 11.42 PM EDT.
Crypto Assets Versus Gold
Crypto enthusiasts are constantly debating whether digital currencies are a viable alternative to digital gold. The mantra has been taken to heart by the citizens of the world’s largest democracy. India is the world’s largest gold holder, with 25,000 tonnes of the precious metal in its possession. The younger generation prefers digital assets to traditional gold because they believe the process is simple, requiring investors to buy it online rather than physically going to a retailer and purchasing gold. Despite tighter controls imposed by global financial regulators, crypto investments in India grew from $200 million to nearly $40 billion in a year. Currently, 15 million people in India trade digital currencies, and the rise in investments demonstrates Bitcoin’s potential to reach new heights.
The US dollar has risen since the Fed meeting, when it stated that interest rate hikes would be carried out sooner. According to policymakers, interest rates will rise by two-quarter percentage points in 2023.Traders are anticipating the Labor Department’s report on Friday, which will provide some insight into the direction of monetary policy in the coming months.
The price of oil fell as investors awaited the OPEC+ meeting, which is scheduled for July 1st. Oil prices have risen for the fifth week in a row, owing to a rebound in fuel demand as the economy recovers from the pandemic and a rise in travel during the summer holidays.
The delay in negotiations between Iran and the US over the revival of Iran’s nuclear deal has alleviated concerns about an increase in oil supply caused by Iranian exports. OPEC+ members, on the other hand, may decide to ease supply cuts in order to meet increased demand and capitalise on higher prices.
Brent crude is currently trading at $74.3 per barrel, down 0.54%, while WTI crude is trading at $72.55 per barrel, down 0.48%.