Stock Futures Continue To Sell-off, Ethereum Resumes Its Rally

Stock Futures Continue To Sell-off, Ethereum Resumes Its Rally

European and US futures are trading lower sharply lower on Wednesday as investors continue to favour risk-off assets. All of this comes on the heels of the fact that the Dow Jones Industrial Average had its worst one-day sell-off yesterday since February this year. The primary reason behind the current sell-off is two-fold. Firstly, traders are concerned about the soaring inflation readings in the US and around the globe. Higher inflation numbers are driven mainly by the loose monetary policies of central banks and governments’ fiscal policies.

Some of the key inflation numbers for the US will be released later today, and investors will be assessing these readings very closely. The forecast is that the inflation reading may increase 0.2% from its previous reading. Overall, we could see the US inflation data soaring by 3.6% as compared to last year. If today’s number matches the forecast, we could see the markets selling off further.  The fact the Federal Reserve continues to think that the current increase in the inflation is nothing but transitory will continue to bother traders.

Secondly, the US stock market went too far and too fast, and it was long due a correction. We have seen a tremendous rally for the three major stock indices so far this year. The Nasdaq index is currently leading the sell-off as investors continue to sell their tech portfolios, while travel-related stocks are not experiencing the same kind of intense sell-off, and this is because traders want to hold on to their positions in the travel sector as the coronavirus-related situation continues to improve.

Oil prices are lingering between gains and losses today, but overall the upward trend remains in place. Investors are feeling optimistic about the recent upgrade in oil demand by OPEC, the largest cartel which controls the oil supply. The cartel increased its oil demand by nearly 200,000 bpd yesterday, and this gives an early indication that we may see some increase in the oil supply by OPEC during their next meeting as well. Currently, a vast amount of supply is being kept out of the market due to the influence of coronavirus on the global economy.

Traders need to think of any upside of crude oil prices very carefully as the coronavirus situation continues to worsen in India. There is strong evidence that India’s top state oil refiners have already scaled back from their operations, which is likely to influence crude imports.

On the more positive side, we do have the US crude oil inventory data due for release later today. Last week, we saw the crude inventory data showing further drawdowns, and after the data, we saw a major improvement in oil prices. Today, the expectations are to see another weak reading, and US inventories may have fallen by 2.3 million barrels. Last week, this number showed a drawdown of 8 million barrels.

In the crypto market, Ethereum’s minor retracement seems to be over again as the second biggest coin by market cap has made a new all-time today, and the price continues to move higher. As for dogecoin, looking at the recent poll survey on Elon Musk’s tweet, it seems like consumers will be able to buy Tesla by using dogecoin.

The massive rally in dogecoin that we have seen in the past few weeks has triggered a significant rally in other meme coins. We continue to see traders favour those coins which are under one dollar. As for Bitcoin, the challenge remains the same, and that is if the crypto king is going to come out of its ugly consolidation zone. The SEC has fired new fresh warnings yesterday and said that there is a lack of regulations when it comes to Bitcoin, and investing funds  in Bitcoin could be risky.