Investors are primarily concerned about the serious rise in coronavirus cases in India and its impact on the feeble global economic recovery. There is no doubt that the coronavirus situation is out of control in India; over 350K new Covid cases were registered on Sunday. India desperately needs help.
Joe Biden, the US President, has assured India that help is on its way as the US will prepare raw materials used in the production of coronavirus vaccine. It will provide that to India. In addition to this, other countries like Britain, France, and Germany have also pledged their help.
In the commodity market, crude and Brent prices are struggling to find their direction. It is likely that we may see the losses continue for both crude and brent prices this week as traders aren’t ready to support the oil prices. The wide concern is that oil supply is on the increase, and demand isn’t picking up much. Although, economic activity in the US has picked up substantially, and lockdown restrictions are easing off to a large extent in Europe as well. All of this should continue to support oil prices in the long run as long as supply remains in check.
As for gold prices, we see substantial recovery in price, and it seems like traders want to push the metal price higher. For the past few days, we did see some weakness creeping in for the precious metal mainly because of the strong US economic numbers; however, those concerns aren’t there today, and gold prices are taking advantage of a weaker dollar index.
Cryptocurrencies have started the week on a much stronger footing today. Over the weekend, we had several adverse news regarding Turkish crypto exchanges. However, investors have brushed off those concerns, and crypto prices are up across the board.
In the early hours of trading, Bitcoin was up over 5% and above the critical price level of 50K. However, the threat isn’t over yet as the violation of 50K is a big deal, and some traders have become more eager to sell into rallies. Having said that, it is important to state that Bitcoin prices are immensely oversold according to the Relative Strength Index. Ethereum, the second-biggest cryptocurrency by market cap, has seen a gigantic price surge today, and the price is hovering near its all-time high. There is no doubt that there is a lot of interest among institutions as they believe that ETH is massively undervalued.
Over in the US, we have a big earnings week as several different tech giants will report their earnings. So far, the S&P 500 companies have beaten analysts’ targets by a large margin. Nearly 25% of the S&P 500 companies have reported their earnings, and 84% have posted earnings with positive EPS surprise. If this ratio continues like this, then it will be the strongest quarter for the S&P 500 since the financial crisis. This week, the anticipation is to see big numbers from companies like Apple, Facebook, Amazon, Microsoft, and Google’s Alphabet.
In addition to this, we also have the Federal Reserve meeting along with US inflation data. The hope is to see the same consistent message from the Chairman of the Federal Reserve.