The equity market rally, which is fuelled by vaccine hope, is taking a breather today. Investors are trying to place their bets more carefully as the global equity markets recorded a record month. But traders believe that there is still a lot more upside left for equities as Pfizer and BioNTech have gained regulatory approval for their coronavirus vaccine in Europe.
The vaccine isn’t going to immediately stop Covid-19, especially in the U.S., where the coronavirus situation is still getting a lot worse. Sadly, this is influencing the business and investment appetite. In addition to this, there are no signs of further help coming from the fiscal side as both Republicans and Democrats are too busy shifting blame.
House Speaker Nancy Pelosi has prepared a new stimulus preproposal, while Senate Majority Leader Mitch McConnell believes his new plan would have more legs if the Democrats become a little more realistic. Policymakers have warned about the economic danger, and investors also know that without the monetary and fiscal policy support, the investment sentient can change its narrative fairly rapidly.
The Federal Reserve Chairman Jerome Powel’s warning gave a clear indication that the Fed is going to stay in a town far longer than what the market is expecting. In his testimonial hearing in front of the Senate, the Chairman made it clear that there is a strong need for further stimulus help. He made it clear that the economy remains in a dangerous place without any further help, and this also means that the future is also uncertain.
As for Brexit, the race is on against the clock, and the E.U. and U.K. negotiators are striving for a victory before this week’s end. The big elephant in the room is still an issue around Fisheries and level grounds. Sterling is moving higher against the dollar as traders are optimistic about the deal, but at the same time, it is important to keep in mind that Sterling’s strength against the dollar is mainly the dollar index becoming weaker.
In the oil market, all eyes remain on the OPEC meeting, where the decision about their oil production is due tomorrow. Traders are certainly concerned about the situation as this decision should have come yesterday, but the cartel had to extend their meeting about their oil supply agreement decision while there are two dissenters, UAE and Kazakhstan. Still, the likely scenario which is priced into the market is that OPEC will extend its current oil production cut. If the decision is made along these lines, it is likely to be highly beneficial as oil demand is still in a recovery mode, and we really need the global economy to pick up some pace.
In terms of cryptos, Bitcoin almost touched the 20K price level yesterday; the crypto king made a new high of 19, 914 yesterday. It is important to keep in mind that we have not seen a proper bull rally of the Bitcoin price as we have only recovered the previous rally. It will only be a rally once the price breaks above the 20K level. Currently, the Bitcoin price is trading at 18,861, away from its record high, and this small pullback could be the opportunity.