Stock futures are trading lower as investors are concerned about the surge in delta variant and also there is hesitation of placing any bigger bets ahead of the earnings seasons. Overall, it is safe to say that investors and traders have been taking every sell off as an opportunity to load more risk into their portfolios. For instance, last week on Thursday we saw decent pullback and the next day, the Dow Jones industrial average rallied nearly 448 points.
There is no doubt that this week is full of action, which should bring up some intriguing trading opportunities. Investors should remain vigilant because the earnings season will kick off starting this week, and the crucial inflation readings of June will be released on Tuesday as well. Jerome Powell, chairman of the Federal Reserve, is also scheduled to testify before the House Financial Services Committee on the semi-annual monetary policy. These events can assist investors in determining how the Fed will change its monetary policy in the coming months.
Investors and traders are hoping to see some strong numbers out of US corporates this week, especially from the US banks given that the issue of the stress test is behind them. Traders are expecting the S&P 500 companies to grow by nearly 65% for the second quarter on a year-over-year basis, bouncing back from the slump caused by the onset of the coronavirus pandemic. The projected surge in growth would be the highest witnessed since the fourth quarter of 2009.
Investors should keep in mind that, while economic growth is expected to slow in the coming months, profits in S&P 500 companies are still expected to grow by double digits in the next two quarters, giving them reason to be optimistic about the future outlook of stock markets.
On the fundamental side, the public’s belief in the future of cryptocurrencies is steadily increasing. For instance, if we look at the Visa transaction report, nearly $1 billion in cryptocurrency transactions occurred in the first six months of 2021. Visa and Mastercard are pushing to make the most of the opportunity. Their aim is to make the use of digital assets more practical and user-friendly. Bitcoin is currently worth close to $34,000.
As per the research conducted by MasterCard, 93% of consumers within North America plan to use digital assets or other modern payment systems such as QR code systems in 2022. Similarly, 75% of millennials are more likely to use cryptocurrencies depending on their level of familiarity with the notorious payment systems.
Gold and the U.S. Dollar
Gold prices are retracing once again from their highs after posting their best performance in seven weeks. Looking at the current situation, traders do not want to sell gold due to growing concerns about the Delta variant. The precious metal entices investors to use it as a hedge against economic uncertainty and rising inflation.
Covid variant is forcing Southeast Asian countries into new lockdowns and this could very easily take place in Europe as well, as restrictions continue to ease off.
Moving forward, the price of gold is very likely to rise if investors believe that the Fed is not concerned about inflation exceeding expectations and achieving full employment. Gold could be worth more than $1,850 by the end of 2021, up from $1,805 right now
One company which is going to be highly in focus among investors today is Virgin Galactic. Richard Branson, founder of Virgin Group, became the first person to successfully ride his own spacecraft, paving the way for future space travel. The event was covered on many national television stations, which was not only a great advertisement for the company but it also provided assurance to other potential space travellers how exciting the journey is. There is no doubt that space travel competition is only going to become more intense but it will certainly take a long time before we will see the public taking advantage of this. For now, it is enough for investors that Virgin Galactic has been able to overcome a series of setbacks, including an engine explosion in 2007 and the crash of SpaceShip2 in 2014.
For investors, suborbital space flights have a potential market of 2 million people with prices ranging from $250,000 to $500,000 and this is going to be their focus.