European and U.S. stock futures are trading somewhat steady after suffering from an intense sell-off for the past few days. There is no doubt that the Nasdaq index, among the U.S. indices, faced the most severe punishment from investors during the past few weeks, while the Dow Jones Industrial Average and the S&P 500 had also experienced a decent pullback. All eyes are likely to remain on the upcoming Federal Reserve’s minutes, and investors would like to know what the Fed has to say about soaring inflation and weakness in the economic data.
Overall, in Europe, it is likely that the price action may continue to remain directionless as investors are still not fully convinced that stocks have become cheap. The general consensus is that it is likely we will see more weakness in stock prices, as traders believe that stock indices have gone too far and too fast.
War For Content
The war for content and to become the biggest player in the content industry continues. Yesterday, we heard AT&T’s big news, and today, it is about the potential acquisition of MGM movie studio by Amazon. This particular move by Amazon is a further confirmation that Amazon wants to leave no stone unturned, and it wants to become the biggest player in the content industry to serve its clients. Yesterday, we saw the Disney and Netflix stock coming under pressure, and today’s Amazon news is likely to bring more adverse price action for Netflix and Disney.
On the virus front, yesterday, we saw the U.K. easing its coronavirus-related restriction as the public is allowed to dine in restaurants, pubs, and cafes. Of course, the move came on the back of the successful rollout of the coronavirus vaccine process, and it also helped the Brits to resume some of their international holidays. In addition, further countries will be added to the safe list, and this means greater recovery in the airline and tourism-related stocks. Another European country, Italy is also going to begin phasing out its national curfew with the hope of removing it completely by June 21 in the low-risk areas.
Over in the U.S., New York is going to relax its coronavirus restrictions, and the public will not need to wear masks in public as the vaccination rate reaches over 50% in the state. U.S. airports have become the busiest since the coronavirus pandemic as Americans resume their domestic travel. The upcoming arrival of Memorial Day is only going to make the airports and airplanes busier.
The coronavirus pandemic continues to wipe out full families in India as the situation is still immensely dire. The sincere hope among investors is that the government’s efforts to control the spread of coronavirus may bring the situation under control to some extent. So far, the chances are very slim.
In the commodity space, we do see more serious momentum continue to back gold prices. The yellow metal’s price surged once again yesterday, and gold’s price is at its highest level in nearly three months. Investors know that inflation is going to run hot, and it will remain above the Federal Reserve’s target of 2%. Higher inflation numbers are going to keep the shine in the gold price, and it is highly likely that we may see the gold price topping the 1900 mark in the coming days. This is because the Federal Reserve is unlikely to adjust its monetary policy to handle inflation as it continues to believe that the surge in inflation is just temporary. In addition to this, we have also seen some decent evidence of weakness creeping into the economic numbers, and this means that the Fed cannot adopt a hawkish monetary stance anytime soon.