European and US stock futures are trading higher while investors continue to monitor the ongoing coronavirus situation. There is a lot of enthusiasm among investors for this week as we unfold an action packed week in terms of earnings. Watch out for the earnings of some of of the big name companies, which are likely to take more attention than anything else.
Dow Jones Industrial Average closed in negative territory on Friday with a loss of 17 points, but the futures are trading higher by nearly 80 points today.
Similarly, the S&P 500 declined 0.30% on Friday, but the futures are trading higher by 0.65% today.
Coronavirus remains the number one risk for the US economy, and that is likely to have an adverse influence on earnings. But tech stocks should continue to show a positive influence as Covid-19 has shifted the technology curve even further as more people have adopted a new behaviour.
We were supposed to see this in 10 years—however this has been accelerated and working from home has become a norm now.
Even after 100 million Americans get their vaccination during the first 100-days of Biden’s presidency, US corporates are going to allow workers to work from home. This means much faster growth of new technological solutions.
Airline Stocks Will Feel More Pressure
Airline stocks are likely to face more pain today as Joe Biden signs an order to ban travel from South Africa, the UK, and a few other countries.
The major reason behind this is that to stop the new strain of coronavirus, which appears to have the ability to spread faster than the current virus.
There is no doubt that the US airlines have been badly beaten up since Covid-19 started. In fact, the entire tourism industry falls in this category, and unfortunately, there is still more pain to come.
In terms of the economic indicators, there is nothing bigger than the US GDP data, which is due to come out on Thursday. The number is expected to show that the US economy grew 4.7% during the fourth quarter.
But for the year we should see a contraction of 3.5%. After such a massive contraction, economists believe that there will be sharp growth for the US economy for this year, and the whisper number for 2021’s growth is 5%.
The Fed will also be in the spotlight on Wednesday, and the expectations are for no change in their monetary policy. The Fed chairman, Jerome Powell, is likely to echo his message from the last meeting, and traders aren’t expecting anything new from him.
Bitcoin and Ethereum
The crypto king remained under selling pressure over the weekend, and we did not see much enthusiasm among bitcoin traders.
What is surprising s is that we are seeing powerful bullish momentum for the second biggest crypto, Ethereum. There is no particular reason for Ethereum to be this strong when Bitcoin is struggling to move higher.
One reason that is pushing the Ethereum prices higher is based on speculation that it may not be classified as a security by the SEC. Ripple XRP is only getting battered because the fear is that it is a security.
Overall, we do not think that the bull trend is over for Bitcoin, and investors truly believe that there is still a lot more juice left in this trade. This means that Bitcoin could still touch the 65K before another rally erupts.