March 16, 2021

Fed Meeting And Retail Sales Ahead

Fed Meeting And Retail Sales Ahead

There is a disconnect between the US stock futures and European futures. The US futures are moving higher, and stocks are set to extend their yesterday’s gain. But the Dax index futures are trading lower as traders are worried about the on-going situation with AstraZeneca’s vaccine. 

AstraZeneca and the University of Oxford’s coronavirus nightmare continue to worsen as more and more companies are suspending the use of their vaccine. For Europe and AstraZeneca, this spells a complete disaster. European countries have been struggling with their politics in using vaccines from day one because they wanted to use a vaccine produced in their region. Now, they will have to stop this behavior and do what is necessary—get their people the safest form of the vaccine so that economic growth can be back on track. 

AstraZeneca’s stock price is likely to remain under pressure, and unless the company can control the situation fast, the damage is likely to be big. The World Health Organization is still backing AstraZeneca’s vaccine. It downplayed the on-going safety concerns by saying that there is no link between the vaccine shot and the increased risk of developing blood clots. But people are entirely going to ignore what the WHO is saying as they know that a large number of countries have suspended the vaccine for no other reason but the vaccine causing the blood clots. 

Fed Meeting 

The Federal Reserve meeting taking place this week is the most event for the markets. This particular meeting is gathering a lot of attention among stock and forex traders. This is because when the Fed met back in December, the situation was completely different. There were concerns about the fresh wave of coronavirus, which triggered more restrictive government measures to prevent the condition from becoming worse. 

Now, we are not only looking at a situation where more than 20% of the population has already received at least one shot of coronavirus vaccine, but also a large part of the country has also started to roll back those restrictions which were put in place back in December. This means a lot of confidence has returned, and we also have a fresh stimulus package that will provide an extra tailwind for the economy. 

Jerome Powell, the Fed Chairman, has so far resisted the idea that there is no need for a hawkish stance in their monetary policy. Regardless of what he says, investors will pay attention to the dot plot, and that will very much drive the narrative of the market. It is pretty much given that there will be a wide difference among the policy members about the US economy’s health, and many are already in a camp that says that we do not need to keep the monetary policy this dovish. 

The upcoming meeting will bring enormous volatility for the market as this could be the first time that the market may get to see a hawkish side of the Fed since the coronavirus made them adopt the ultra-dovish policy. 

Retail Data 

One particular economic number that traders will pay attention to today is the US Retail Sales data which is due later today. The forecast is for -0.5%, while the previous reading was at 5.3%. A strong reading will confirm that Americans are feeling confident about their spending. This will be another signal that the Fed may not want to ignore. 

Bitcoin 

In terms of Bitcoin trading, the crypto king is taking a further beating today after posting another record high over the weekend. Any retracement in the Bitcoin price could be great news for Americans who are going to get their stimulus checks this week. Nearly 100 million checks will be arriving over the next ten days. If the Bitcoin price continues to go lower, it could be an excellent opportunity for Americans to bag some bargain as there is no doubt that they will spend a large portion of their stimulus checks in buying bitcoin and stocks. 

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