OANDA – Stocks bounce back, Biden briefing, Nike and Micron crush earnings, Oil rallies, Gold drifts, Bitcoin recovers
Q3 2021 hedge fund letters, conferences and more
US stocks rebounded on hopes that Biden’s $2 trillion economic agenda could still get done in January. Investors want to be optimistic leading up to the holidays and lawmakers on Capitol Hill will not want to be painted the villain, so all the rhetoric will likely be upbeat for the rest of the week. Before President Biden’s speech, it was reported that 500 million tests could be sent for free to Americans that want them. To assist healthcare capacity concerns, 1,000 military personnel will try to help the labor shortage in hospitals.
President Biden’s afternoon speech provided another plea for Americans to get vaccinated and eased fears that the US won't go back to lockdowns. Biden addressed the COVID-19 response and the economic hit that would happen if Build Back Better does not get done. Biden concluded his presser by stating, “Senator Manchin and I will get something done.” Biden's comments just confirm Wall Street's upbeat outlook for the US economy and stock market.
Nike
Nike Inc (NYSE:NKE) shares rallied after producing strong results that showed US sales were able to overcome the shortfall with sales in China. Nike is navigating fairly well with supply chain issues and that should only get better as Vietnam reopens. Nike’s 20 cent earnings beat, solid guidance, and optimism supply chain bottlenecks will start to ease at the end of next quarter should keep shares heading higher.
Micron
Micron Technology, Inc. (NASDAQ:MU) gave a strong outlook that has Wall Street analysts scrambling to upgrade their outlooks and raise their price targets. Strong demand for chips was ahead of what Wall Street was expecting and that should keep this stock supported.
Oil
Crude oil prices are rebounding alongside as equities on optimism holiday travel will remain intact for most vaccinated individuals. Both the US and UK are not headed to lockdowns and that suggests the short-term outlook might not get completely derailed by the omicron variant.
US daily coronavirus infections in the U.S. surged to levels not seen since September, but with 77.4% of over 5-years old population vaccinated with at least one dose, the economy will not see widespread shutdowns.
Europe’s energy crisis is battling diesel shortages and that might not improve anytime soon. The short-term bottom for crude prices appears to be in place.
President Biden’s afternoon speech provided another reiteration that he believes gasoline prices will fall. Biden did not provide any hints that further action would be taken to keep sending energy prices down.
Gold
Gold prices softened as US stocks advanced on strong earnings and optimism the short-term economic from omicron will be quick. The aftermath of Senator Manchin’s rejection of Biden’s Build Back Better legislation did not trigger a massive collapse in gold as optimism still remains that Democrats will get a deal done early next year.
Gold prices are figuring out its year-end trading range somewhere around $1800 and that should remain intact as trading volumes decrease. Gold’s long-term outlook remains bullish as investors may have aggressively priced in Fed tightening for next year.
Cryptos
Cryptocurrencies are rebounding across the board after Fitch Ratings stated improved regulation could moderate stablecoin credit risks. Stablecoins remain vulnerable to US regulation, but it seems the cryptoverse will most likely embrace regulatory clarity. Bitcoin is leading today’s rally and that has many investors believing the bottom is in place. Trading conditions are nowhere near full participation, so unless further catalysts appear, Bitcoin should still remain rangebound.
Article By Edward Moya, OANDA
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